Diebold has agreed to pay $48 million to the government to settle both civil and criminal charges over violations of the Foreign Corrupt Practices Act.

On Oct. 22, Diebold reached a $25.2 million settlement with the Justice Department to resolve criminal charges, and a $23 million settlement with the Securities and Exchange Commission to resolve civil charges over allegations that it paid bribes to government officials in China and Indonesia, and falsified records in Russia to in order to secure business in those countries.

Specifically, the Justice Department charged Diebold with conspiring to violate the FCPA's anti-bribery and books and records provisions and violating the FCPA's books and records provisions. The enforcement action stems from allegations that Diebold paid bribes to government officials in China and Indonesia and falsified records in Russia to secure contracts to provide ATMs to state-owned and private banks in those countries.

“In China, Indonesia and Russia, Diebold chose to pay bribes for business and falsify documents to cover its tracks,” Acting Assistant Attorney General Mythili Raman said in a statement. “Through its corrupt business practices, Diebold undermined the sense of fair play that is critical for the rule of law to prevail.”

According to court documents, from 2005 to 2010, Diebold repeatedly provided things of value—cash payments, gifts, and non-business travel—to employees of banks in China and Indonesia in order to secure and retain business with bank customers, including state-owned and -controlled banks, totaling $1.75 million in illicit gains.

Diebold attempted to disguise the payments and benefits by making payments through third parties designated by the banks and by falsely recording leisure trips for bank employees as “training.”

The court documents also allege that Diebold, from 2005 to 2009, created and entered into false contracts with a distributor in Russia for services that the distributor was not performing. The distributor then used the funds paid by Diebold to pay bribes to employees of Diebold's privately-owned bank customers in Russia in order to obtain and retain ATM-related contracts with those customers.

The enforcement action against Diebold “underscores that fighting global corruption is and will remain a mainstay of the Criminal Division's mission,” said Raman. 

The company's swift actions, however, also earned it a deferred prosecution agreement with the Justice Department. Under the terms of the DPA, the Justice Department, which acknowledged Diebold's voluntary disclosure and extensive internal investigation and cooperation, agreed to defer prosecution of Diebold for three years. Diebold agreed to implement internal controls, cooperate fully with the government, and retain a compliance monitor for at least 18 months.

“A bribe is a bribe, whether it's a stack of cash or an all-expense-paid trip to Europe,” said Scott Friestad, an associate director in the SEC's Division of Enforcement.  “Public companies must be held accountable when they break the law to influence government officials with improper payments or gifts.”