InVision Technologies, Inc. ("InVision") was a Delaware corporation headquartered in Newark, California. InVision's common stock was registered with the SEC and was listed on the NASDAQ. InVision was a manufacturer of explosive detection systems used at airports. On December 6, 2004, InVision was acquired by an affiliate of General Electric Co. ("General Electric"). The successor company, known as GE InVision, Inc., is an indirect wholly-owned subsidiary of General Electric.
In three instances from at least June 2002 through June 2004, InVision was aware of a high probability that its sales agents or distributors made or offered to make improper payments to foreign government officials in order to obtain or retain business for InVision.
First, in November 2002, InVision agreed to sell two explosive detection machines for use at a Chinese government-owned and controlled airport under construction in Guangzhou, China. The sale to the airport was conducted through InVision's local distributor in China, which purchased the two machines from InVision for approximately $2.8 million. Due to problems in obtaining an export license from the United States government, however, InVision did not deliver the machines until October 2003. During the delay, the distributor in China informed InVision that the airport intended to impose a financial penalty on the company. In order to avoid this penalty, the distributor intended to offer foreign travel and other benefits to airport officials. The distributor requested financial compensation from InVision to pay for penalties and costs that, it claimed, would be incurred as a result of the delay in shipment. InVision agreed to pay the distributor $95,000, which was completed in April 2004. InVision realized profits of approximately $589,000 from the sale of the two machines in China.
Second, InVision sold two explosive detection machines for use in an airport in the Philippines in November 2001. InVision received repeated requests for a commission on the sale from its sales agent in the Philippines. The agent indicated that it intended to use part of any commission to make gifts or pay cash to government officials in order to influence their decision to purchase additional InVision products. In December 2001, InVision agreed to pay the Filipino sales agent a commission in the amount of approximately $108,000 in connection with the November 2001 sale, which was completed in July 2002.
Third, beginning no later than 2002, InVision competed for the right to supply explosive detection machines to an airport under construction in Bangkok, Thailand. Construction of the airport was overseen by a corporation controlled by the government of Thailand. From at least January 2003 through April 2004, InVision's Thai distributor indicated that it had offered to make gifts or payments to officials with influence over the airport corporation. In or about April 2004, the airport corporation, through its general contractor, agreed to purchase 26 of InVision's explosive detection machines from the InVision distributor in a sale InVision valued at approximately $35.8 million. Consummation of the transaction was deferred after InVision received notification of possible FCPA violations. InVision has not recognized any revenue from the transaction and has agreed that the transaction will proceed, if at all, only as a sale directly to the airport corporation or another Thai governmental entity.
On February 14, 2005, the SEC instituted cease and desist proceedings against GE InVision alleging violations of the anti-bribery, books & records, and internal controls provisions of the FCPA. In the administrative proceeding, the SEC ordered GE InVision to cease and desist violating the FCPA, ordered the company to pay disgorgement of $589,000 plus prejudgment interest of $28,703.57, and ordered the company to hire an independent monitor to assess and report on the company's anti-corruption compliance policies and procedures. In instituting the order, the SEC noted GE InVision's cooperation, including the voluntary disclosure of the conduct to both the SEC and the DOJ.
