Money from H-P subsidiaries was funneled through complex webs of bank accounts, shell companies and partners in multiple countries to government officials, according to court documents filed by the Department of Justice, which investigated the activity along with the Securities and Exchange Commission and other agencies.
In Russia, where the illegal activity went on from 2000 to 2007, H-P’s money was spent on travel, cars, jewelry, clothing, expensive watches, furniture, household appliances and “swimming pool technology,” the Justice Department said.
In one case, a Bosnian account of a company registered in the British Virgin Islands paid a nearly €108,000 hotel bill for a company owned by a family member of an unnamed senior Russian government official.
In Poland, the activity by H-P subsidiary occurred roughly between 2006 and 2010, the government agencies stated. The goal was to secure and maintain millions of dollars with the Polish National Police agency.
An unnamed executive in H-P’s Polish unit repeatedly delivered bags of cash to an unnamed information-technology director of the agency–described mainly in court documents as “Polish Official,” sometimes at the recipient’s house and sometimes in a Warsaw parking lot. Four such deliveries in 2008 totaled more than $360,000, according to an information statement filed in U.S. District Court in U.S. District Court in San Jose, Calif.
The two conspirators went to great lengths to avoid detection or electronic surveillance.
“In addition to communicating through anonymous e-mail accounts and prepaid mobile telephones,” the H-P executive would drive the Polish official to “remote locations, and the two would type messages in a text file, passing the computer between themselves.”
The Polish official also took H-P funded trips to San Francisco and Las Vegas, “and a private tour flight over the Grand Canyon,” the government document states.
In Mexico, according to the court documents, to secure contracts to sell hardware and software to oil company known as Pemex, H-P agreed to pay a $1.41 million “commission” to an unnamed consultant who had close ties to senior Pemex executives.
The money was hidden in a transaction involving another sales partner, with the consultant subsequently paying one of the Pemex officials approximately $125,000.
H-P’s payment in connection with the settlement to the government does not rank among the Top Ten of such penalties under the Foreign Corrupt Practices Act. The government agencies noted that the company had cooperated with their investigations.
“The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company,” John Schultz, the company’s general counsel, said in a statement issued Wednesday.