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Enforcement Action Dataset

 

Initiation Date:    07/22/1992  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • D. Michael Crites, United States Attorney
  • Christopher K. Barnes, Assistant United States Attorney
  • Theodore S. Greenberg, Chief, Money Laundering Section, Criminal Division
  • Gerald E. McDowell, Chief, Fraud Section, Criminal Division
  • Peter B. Clark, Deputy Chief, Fraud Section, Criminal Division
  • Thomas A. Colthurst, Trial Attorney, Money Laundering Section, Criminal Division
  • James A. Baker, Trial Attorney, Fraud Section, Criminal Division

Assisting Agencies:    Unknown

Type of Action:    DOJ Criminal Proceeding

Docket or Case Number:    92-cr-00087

Court:    S.D. Ohio

Origin of the Proceeding:    Whistleblower

Whistleblower:    Yes (GE Employee)

Case Status:    Resolved


Summary  Information

General Electric Company was a New York corporation with its principal address in Schenectady, NY, and executive offices in Fairfield, CT. General Electric Aircraft Engines ("GEAE") was a business unit of General Electric that produced and sold aircraft engines and related products and services to the United States and foreign governments and domestic and foreign commercial customers. GEAE was not a separate corporate entity from General Electric.

Between about 1984 and about 1991, General Electric, through GEAE, supplied jet aircraft engines and related equipment and services to the Israeli Air Force ("IAF"), pursuant to contracts between General Electric and the Government of Israel. In connection with these acquisitions, General Electric, IAF Brigadier General Rami Dotan, General Electric international sales manager Herbert B. Steindler, and others conspired to create false billings for fictitious IAF projects to generate funding for projects and uses that Dotan either could not or did not want to have approved through the Israeli Ministry of Defense or the U.S. Government. In addition, approximately $11 million was diverted for the personal benefit of Dotan and Steindler. General Electric, acting principally through Steindler, generated the approximately $11 million from the filing of false and fictitious invoices and supporting documents and paid a portion of these funds to Dotan to influence him to assist General Electric in its efforts to secure favorable treatment in connection with the retention of the contracts referred to above. None of these payments were properly recorded in General Electric's books and records.

On July 22, 1992, the DOJ filed a four count Information in the Souther District of Ohio agains General Electric alleging (1) conspiracy to make false, fictitious, or fraudulent statements, conspiracy to make false statements, conspiracy to commit wire fraud, conspiracy to commit money laundering, conspiracy to violate the books & records provisions of the FCPA; (2) direct violations of the books & records provisions of the FCPA; (3) making false, fictitious, or fraudulent statements; and (4) money laundering. On the same date, General Electric entered into a Plea Agreement with the DOJ. Under the terms of the agreement, General Electric pleaded guilty to all four counts and agreed to pay a fine of $9.5 million plus a mandatory assessment of $800. The DOJ noted the company's cooperation and took into consideration the concurrant settlement agreement the company entered into with the DOJ civil division and two qui tam plaintiffs. In the civil settlement, General Electric agreed to pay $59.5 million to the U.S. government.

Country(ies) involved:    Israel

Region(s) involved:    Middle East

Sanction to Bribe Ratio:    $68,500,800 / $11,000,000 = 622.74 %

Sanction to Revenue Ratio:    $68,500,800 / $300,000,000 = 22.83 %

Sanction to Profit Ratio:    Not Applicable

FCPA Matter Name:   General Electric's Involvement in Israel in 1984 Information

Number of Related Enforcement Actions (Including This Enforcement Action):    3

Country(ies) involved:    Israel

Region(s) involved:    Middle East

Total $ Bribery Payments:    $11,000,000

Total $ Revenue Generated from Bribery:    $300,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    Unknown

Total $ Monetary Sanctions (U.S. Sanctions Only):    $70,242,503

Sanction to Bribe Ratio:    $70,242,503 / $11,000,000 = (638.57 %)

Sanction to Revenue Ratio:    $70,242,503 / $300,000,000 = (23.41 %)

Sanction to Profit Ratio:    Not Applicable

Name:    General Electric Company

Entity Type:    Public Company

Place of Incorporation:    United States

HQ Country(ies):    United States

Industry:    Industrial Goods

FCPA Claims:    Books & Records, Conspiracy (18 U.S.C. 371) ; Books & Records, Primary, Issuer (15 U.S.C. § 78m (b)(2)(A))

Related Claims:    Conspiracy to Make False, Fictitious, or Fraudulent Claims (18 U.S.C. § 371; 18 U.S.C. § 287) ; Conspiracy to Make a False Statement (18 U.S.C. § 371; 18 U.S.C. § 1001) ; Conspiracy to Commit Wire Fraud (18 U.S.C. § 371; 18 U.S.C. § 1343) ; Conspiracy to Launder Money (18 U.S.C. §§ 1956, 1957) ; False, Fictitious, or Fradulent Statements (18 U.S.C. § 287) ; Money Laundering (18 U.S.C. § 1957)

Statutory Basis for FCPA Jurisdiction:    Issuer ; Conspirator

Period of Bribery:   1984 - 1991

Total Bribery Payments:    $11,000,000

Total Revenue Generated from Bribery:    $300,000,000

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Israel

Region(s) involved:    Middle East

Officials Potentially Influenced (Name; Title; Organization): 

  • Rami Dotan; Lieutenant Colonel, Colonel, Brigadier General, and IAF Quartermaster; Israeli Air Force

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third-Party Intermediary:   

  • GSK Management Consultants, Inc. , Agent/Consultant/Broker
  • Ingbir Engineering and Maintenance Company , Contractor/Sub-Contractor

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer, Cash (bills/coins/etc.)

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Diversions disguised as payments to a subcontractor

Period of Bribery:   1984 – 1991

Total Bribery Payments:    $3,700,000

Total Revenue Generated from Bribery:    $100,000,000

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Israel

Region(s) involved:    Middle East

Officials Potentially Influenced (Name; Title; Organization):  

  • Rami Dotan; Lieutenant Colonel, Colonel, Brigadier General, and IAF Quartermaster; Israeli Air Force;

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third Party Intermediary:    GSK Management Consultants, Inc. - Agent/Consultant/Broker
Ingbir Engineering and Maintenance Company - Contractor/Sub-Contractor

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Diversions disguised as payments for flight tests

Period of Bribery:   1984 – 1991

Total Bribery Payments:    $7,400,000

Total Revenue Generated from Bribery:    $200,000,000

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Israel

Region(s) involved:    Middle East

Officials Potentially Influenced (Name; Title; Organization):  

  • Rami Dotan; Lieutenant Colonel, Colonel, Brigadier General, and IAF Quartermaster; Israeli Air Force;

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third Party Intermediary:    GSK Management Consultants, Inc. - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer, Cash (bills/coins/etc.)

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

Not Applicable

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
General Electric Company    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
General Electric Company    

Total Monetary Sanctions for the Action:    $68,500,800

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    07/22/1992

General Electric Company

—  Total Monetary Sanctions for Defendant:    $68,500,800

—  Organizational Probation:    None

—  Compliance Obligation:    No

—  Reporting Obligation:    N/A

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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