August 26, 2015

Former regional director deemed bribes necessary to conduct business

SAP whistleblower lawsuitVicente Eduardo Garcia, a former vice president of global and strategic accounts for software company SAP, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act for his role in helping to secure a multi-million dollar contract with the Panamanian government. The bribes totaled $145,000 and were paid out to two government officials and another individual who channeled money to a third government official.

SAP wanted a $14.5 million contract with a Panama government agency to provide technology services and software. To secure this contracted, Garcia paid bribes to two government officials in Panama and to a another person associated with a third government official. They used fraudulent contracts and false invoices to hide the bribery. SAP won the contract and further contracts with the Panamanian government. The FBI and the IRS, with help from the DOJ Criminal Division and the SEC, conducted the investigation.

The bribery wasn’t just for SAP’s benefit. Garcia also took kickbacks for himself, according to a separate settlement with the Securities and Exchange Commission. Between December 2011 and October 2012, Garcia got paid $85,965 in kickbacks. Garcia agreed to an SEC penalty of approximately $92,000, which amounted to a return of the kickbacks he received in addition to interest.

Garcia claimed he thought the bribes were “necessary” in order to secure the lucrative government contracts to upgrade software for the Panamanian government. Garcia admitted to conspiring with other officials at SAP to secure the contracts. The bribery scheme lasted from 2009 to 2013, during which Garcia circumvented SAP internal controls procedures by falsifying approval forms to justify the large discounts he was providing to his Panamanian partners. The SEC’s investigation reveals Garcia used his business and personal emails, as well as company letter heads to coordinate his illicit activities.

Garcia’s sentencing for his criminal violations of the Foreign Corrupt Practices Act is scheduled for December 16, 2015. He could face multiple fines and up to five years in prison.