Illicit Payments to Secure an Egyptian Air Force Contract
The Securities and Exchange Commission settled an enforcement action against Thomas Wurzel, the former President of ACL Technologies, Inc., a former subsidiary of United Industrial Corporation (UIC). The government alleged that Wurzel, in violation of the Foreign Corrupt Practices Act (FCPA), authorized illicit payments to an Egyptian-based agent in 2001 to 2002 for the purpose of influencing Egyptian Air Force officials to award his company a $5.3 million contract to build a military aircraft depot in Cairo. According to the SEC’s complaint, Wurzel authorized three forms of illicit payments to the agent and directed his subordinates to create false invoices to conceal one of those payments. Without admitting or denying the allegations in the complaint, Wurzel consented to the entry of a final judgment ordering him to pay a $35,000 civil penalty. The SEC also settled an administrative proceeding against UIC in the same matter. According to the SEC, “UIC lacked meaningful controls to prevent or detect the ACL President’s authorization of illicit payments to the agent. The UIC legal department approved the retention of the agent despite a lack of documented due diligence and the failure of the agency agreement to comply with corporate policy. Moreover, a UIC official approved at least one payment to the agent, and the illicit payments to the agent were mischaracterized on UIC’s books and records as legitimate business expenses.” Without admitting or denying the SEC’s findings, UIC agreed to pay $337,679 in disgorgement and prejudgment interest.
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|United Industrial Corporation||$372,679|