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By | Gavin Clarke 3rd February 2016 12:04

SAP pays $3.9m to settle Panama government bribery case

Discounted deals still made millions

SAP will pay nearly $3.9m after a senior executive was found to have bribed officials in the government of Panama to land lucrative deals.

The software giant has agreed to pay $3.7m in profit plus an extra $188,896 in interest.

SAP did so without admitting or denying the findings of the regulator that brought the bribery case, the Securities and Exchange Commission (SEC).

The SEC had charged SAP with violations of the internal controls provisions and the books and records provisions of the Foreign Corrupt Practices Act (FCPA).

The SEC had separately charged former regional SAP vice president of global and strategic accounts Vincent E. Garcia with orchestrating a scheme to pay $145,000 in bribes.

The money was intended for one official with promises to pay a further to two to secure four contracts, the SEC said.

Garcia’s scheme ran from 2009 to 2013 with the idea being to sell SAP’s software at discounts of up to 82 per cent through an SAP partner.

These savings allowed the partner – unnamed by the SEC - to create a slush fund that provided funds for both the bribes and kickbacks of $85,965 to Garcia.

The SEC found that Garcia has circumvented SAP’s internal controls by submitted approval forms to the firm that falsified the reason for discounts to the SAP partner. He also used SAP’s email and his own accounts to discuss the deals.

Garcia settled with the SEC in August 2015, agreeing to pay $92,395 – the $85,965 in kickbacks he had received, plus a prejudgment interest of $6,430. He also pleaded guilty to conspiracy to violate the Foreign Corrupt Practices Act in a separate criminal case and is now serving a 22-month sentence. ®

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