AAR Corp. was a provider of aviation products and services based in Illinois. The company’s common stock was registered with the SEC and traded on the New York Stock Exchange under the ticker symbol AIR.
Deepak Sharma was President of International Supply Chain for a wholly owned AAR subsidiary, which according to independent research by the Clearinghouse was likely AAR International, Inc.
According to the documents in this case, between 2015 through 2020, AAR engaged in bribery schemes in Nepal and South Africa. In Nepal, Sharma orchestrated and implemented a bribery scheme to win a contract for the sale of two Airbus A330 aircraft to Nepal Airlines, a government-owned airline. AAR retained a third-party agent to pay bribes to officials who had control over the contract. In South Africa, Sharma was involved in a bribery scheme involving a contract for AAR to provide aviation services to a subsidiary of government-owned South African Airways. In all, AAR paid millions of dollars in bribes to Nepalese and South African officials as part of the two schemes and profited by approximately $23.9 million as a result.
On December 19, 2024, the DOJ entered into a non-prosecution agreement with AAR with a term of 18 months. Under the terms of the settlement, AAR agreed to pay a criminal penalty of $26,363,029 and to forfeit $18,568,713. The fine represented a 45 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range, and the DOJ agreed to credit the disgorgement paid in the parallel SEC proceeding against the forfeiture in this case. Additionally, AAR agreed to report on the status of its anticorruption compliance for the duration of the term. The DOJ noted AAR's self-report, cooperation, and remediation, but the agency did not give AAR credit for self-reporting the misconduct because an independent source reported the allegations regarding the Nepal conduct to the DOJ 12 days prior. However, the DOJ noted that AAR self-reported prior to it becoming aware the conduct had already come to the attention of the DOJ.
In a related administrative proceeding settled on December 19, 2024, the SEC ordered AAR to cease and desist violations of the anti-bribery, books and records, and internal controls provisions of the FCPA. Under the terms of the settlement, AAR agreed to pay disgorgement of $23,451,100 plus prejudgment interest of $5,785,524. The SEC determined that a civil penalty was unnecessary in light of the criminal penalty paid by the company in the DOJ's parallel proceeding. The SEC noted AAR's disclosure, cooperation, and remediation.
