Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Federal Court Proceeding
Docket or Case Number:
08-cv-01359
Court:
District of Columbia
Name of Prosecuting Attorneys:
Scott W. Friestad, SEC Headquarters
Robert B. Kaplan, SEC Headquarters
Brian O. Quinn, SEC Headquarters
Tonia J. Tornatore , SEC Headquarters
US Assisting Agencies:
U.S. Department of Justice
Federal Bureau of Investigation
Foreign Enforcement Action/Investigation:
Unknown
Foreign Assistance:
Unknown
Origin of the Proceeding:
Unknown
Whistleblower:
Unknown
Case Status:
Resolved
Summary
ABB Ltd., a Swiss corporation with headquarters in Zurich, Switzerland, is a global provider of power and automation technologies. ABB had numerous direct and indirect subsidiaries, including ABB Inc., a U.S. subsidiary whose financial results were part of ABB's consolidated financial statements filed with the SEC.
Ali Hozhabri was a project manager for ABB Network Management ("ABB NM"), a Texas based division of ABB Inc.
Between 2002 and 2004, Hozhabri and the former General Manager of ABB NM embezzled at least $468,714 from ABB NM. They carried out this scheme by requesting and/or authorizing cash and check disbursements to pay purported business expenses associated with contracts ABB NM was performing for Itaipu Binacional ("ITAIPU"), an entity owned by the governments of Brazil and Paraguay, and for Abu Dhabi Company for Onshore Oil Operations ("ADCO"), a division of a government owned company in the UAE. Hozhabri personally kept $234,357 of these embezzled funds, and ABB NM's General Manager kept the remainder of money. No bribery was alleged.
On August 6, 2008, the SEC filed a two count Complaint in the District of Columbia against Hozhabri alleging (1) knowing violations of the internal controls provisions of the FCPA and falsification of the books, records, or accounts of an issuer as well as (2) aiding and abetting violations of the books and records provisions of the FCPA. On August 8, 2008, Hozhabri entered into a Consent Agreement with the SEC. Under the terms of the agreement, Hozhabri consented to be enjoined from future violations of the books & records and internal controls provisions of the FCPA and to disgorge $234,357, representing profits gained as a result of the conduct alleged in the Complaint. This disgorgement obligation was deemed satisfied by Hozhabri's payment of restitution or forfeiture totaling $234,357 in the related DOJ action against him.
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