Channel bribery and reseller collusion schemes are eligible for FCPA rewards. Dodd Frank rewards may be available to anyone with information about resellers providing trips or payments to government officials and colluding and rigging government tenders. Resellers and channel partners will often engage in corrupt practices and collude to rig government tenders. This allows the winning reseller to maximize its profit and margin and have sufficient funds to provide trips and kickbacks to government officials. People who have information relating to corrupt distributors, partners, and resellers colluding to win government tenders on behalf of SEC-regulated companies may be entitled to a reward under the SEC’s Dodd-Frank Reward Program.
Below is a recent example of the SEC bringing a multi-million dollar reseller bribery scheme. On September 12, 2018, the SEC charged United Technologies with violating the FCPA by engaging in a bid-rigging bribery scheme. Paragraph 10 of the SEC’s Order reads in part:
“Between February 2013 and December 2014, Otis sought to win additional contracts from Liftremont. At the direction of a Liftremont Senior Official, Otis Russia involved four different intermediaries which acted as conduits to make improper payments in order to secure nine contracts from Liftremont. In each instance, Otis Russia sold elevator equipment to the intermediary at one price, knowing that the intermediary would sell the equipment to Liftremont at a significantly higher price. The spread between the prices, at least $11.8 million, was intended in part for Liftremont officials.”
Channel partner and reseller bid-rigging and bribery schemes can be highly rewarding for SEC whistleblowers. These schemes are particularly common in the tech, telecom, medical device, and defense industries. If anyone has information relating to distributors, channel partners, or resellers of an SEC-regulated company being involved in corrupt practices, he or she should feel free to contact me. And for more details about how the reward program applies to FCPA whistleblowers, please click here.