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Enforcement Action Dataset

 

Initiation Date:    12/20/2018  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Sandra L. Moser, Acting Chief, Fraud Section, Criminal Division
  • Joseph McFarlane, Trial Attorney, Fraud Section, Criminal Division

Assisting Agencies:    Unknown

Type of Action:    DOJ Criminal Proceeding

Docket or Case Number:    N/A

Court:    N/A

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Polycom, Inc., headquartered in San Jose, California, sold voice and video communications products and services. From 1996 until 2016, Polycom’s common stock was registered with the SEC and traded on the NASDAQ. On September 27, 2016, a private equity firm acquired Polycom, at which pount the company's shares ceased to trade publicly. On July 2, 2018, Plantronics, Inc. acquired Polycom from the private equity firm, and Polycom became a wholly-owned subsidiary of Plantronics.

Polycom Communications Solutions (Beijing) Co., Ltd. (China) (“ Polycom China”) was a wholly-owned subsidiary of Polycom organized in China that sold Polycom’s products and services in the Chinese market.

According to the documents filed in the related SEC enforcement action, from 2006 through 2014, Polycom’s Vice President of China at Polycom China, along with other senior managers, provided significant discounts to Polycom’s distributors with the intention that the distributors would use the discounts to make payments to officials at Chinese government agencies and state-owned enterprises in order to sell Polycom's products. The payments were recorded in a parallel deal-tracking and email system located in China, outside of Polycom’s company-approved systems. In its declination letter to the company, the DOJ noted that Polycom earned profits of $30,978,000 form the illegaly obtained contracts in China.

On December 20, 2108, the DOJ issued a formal declination letter to Polycom pursuant to the agency's Corporate Enforcement Policy. Under the terms of the declination, Polycom would not be prosecuted but was required to disgorge $30,978,000. The company would pay $10,672,926 of the disgorgement to the SEC in the related enforcement action and $10,152,537 each to both the DOJ and the U.S. Postal Inspection Service Consumer Fraud Fund.

In a related settled administrative proceeding initiated on December 26, 2018, the SEC ordered Polycom to cease and desist violations of the books and records and internal controls provisions of the FCPA. In addition the SEC ordered Polycom to pay disgorgement of $10,672,926 plus prejudgment interest of $1,833,410 and a civil fine of $3,800,000. In determining to accept the settlement and the amount of fines paid, the SEC noted Polycom's voluntary disclosure of the misconduct as well as the company's cooperation in the investigation and the remedial measures taken.

Country(ies) involved:    China

Sanction to Bribe Ratio:    Not Applicable

Sanction to Revenue Ratio:    Not Applicable

Sanction to Profit Ratio:    $30,978,000 / $30,978,000 = 65.55 %

Number of Related Enforcement Actions (Including This Enforcement Action):    2

Country(ies) involved:    China

Total $ Bribery Payments:    Unknown

Total $ Revenue Generated from Bribery:    Unknown

Total $ Profit Earned or Expenses Avoided from Bribery:    $30,978,000

Total $ Monetary Sanctions (U.S. Sanctions Only):    $36,611,410

Sanction to Bribe Ratio:    Not Applicable

Sanction to Revenue Ratio:    Not Applicable

Sanction to Profit Ratio:    $36,611,410 / $30,978,000 = (118.18 %)

Name:    Polycom, Inc.

Entity Type:    Merged or Acquired Company

Place of Incorporation:    United States

HQ Country(ies):    United States

Industry:    Technology

FCPA Claims:    Anti-Bribery, Primary, Issuer (15 U.S.C. § 78dd-1) ; Books & Records, Primary, Knowing Violation (15 U.S.C. § 78m (b)(5))

Related Claims:    None

Statutory Basis for FCPA Jurisdiction:    Issuer ; Person (Books & Records, Internal Controls)

Name:    Polycom Communications Solutions (Beijing) Co., Ltd. (China)

Entity Type:    Subsidiary

Place of Incorporation:    China

HQ Country:    China

Industry:    Technology

Period of Bribery:   -

Total Bribery Payments:    Unknown

Total Revenue Generated from Bribery:    Unknown

Total Profit Earned or Expenses Avoided from Bribery:    $30,978,000

Country(ies) involved:    China

Officials Potentially Influenced (Name; Title; Organization): 

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    Polycom Communications Solutions (Beijing) Co., Ltd. (China) - Subsidiary

Third-Party Intermediary:    None/Unknown

Type of Bribe:   Unknown

Cash, Wire or Check:    Unknown

Purpose of Bribe:    Unknown

TRANSACTION OVERVIEW
Bribery in China

Period of Bribery:  

Total Bribery Payments:    Unknown

Total Revenue Generated from Bribery:    Unknown

Total Profit Earned or Expenses Avoided from Bribery:    $30,978,000

Country(ies) involved:    China

Officials Potentially Influenced (Name; Title; Organization):  

    Unknown

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    Polycom Communications Solutions (Beijing) Co., Ltd. (China) - Subsidiary

Third Party Intermediary:    None/Unknown

Type of Bribe:   Unknown

Cash, Wire or Check:    Unknown

Purpose of Bribe:    Unknown

Misconduct by Subsidiary?  Yes

Parent:    Polycom, Inc.

  • Subsidiary:  Polycom Communications Solutions (Beijing) Co., Ltd. (China)

    • Percentage of Ownership:    Unknown
    • Direct or Indirect Ownership:    Unknown
    • Parent Had Knowledge of Sub’s Bribery?:    No
    • Subsidiary Expressly Alleged to Be Parent's Agent:    No
    • Parent Liable for Sub Misconduct?:    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
Polycom, Inc.    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Polycom, Inc.    

Total Monetary Sanctions for the Action:    $30,978,000

Case Status:    Resolved


Disposition:    Declination with Disgorgement

Date of Disposition:    12/20/2018

Polycom, Inc.

—  Total Monetary Sanctions for Defendant:    $30,978,000

—  Organizational Probation:    None

—  Compliance Obligation:    No

—  Reporting Obligation:    No Applicable

—  Admission of Guilt/Acceptance of Responsibility:    Yes

    Note: This sanction may have been imposed jointly and severally on multiple defendants, or it may resolve claims against more than one defendant in this proceeding or related proceedings. You should review the case summaries and resolution documents for all related cases to better understand how sanctions were levied against the defendants.

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