Tech company PTC to pay $28 million to resolve U.S. bribery probes
By Suzanne Barlyn
(Reuters) - Two units of Massachusetts-based software company PTC Inc will pay a total of $28 million to resolve probes into whether they gave more than $1 million in recreational travel to officials from China, two U.S. government agencies said on Tuesday.
The Department of Justice and the Securities and Exchange Commission announced settlements with PTC to resolve possible bribery charges under the U.S. Foreign Corrupt Practices Act (FCPA), a 1970s law that bars bribes to foreign government officials, the Justice Department said in a statement.
A PTC spokesman did not immediately return a call requesting comment.
PTC admitted in its settlement with the Justice Department that two of its units in Shanghai and Hong Kong, through local business partners, arranged and paid for employees of various Chinese state-owned enterprises to travel to the United States.
The trips, which occurred from around 2006 to 2011, were purportedly for training at PTC's Needham, Massachusetts headquarters but were mostly for recreational excursions, including to New York, Los Angeles, Las Vegas and Hawaii, the department and the SEC said in statements.
PTC's Shanghai and Hong Kong units paid more than $1 million to fund trips while entering into contracts worth more than $13 million with the Chinese state-owned entities, the department's statement said.
PTC will pay the department $14.5 million in a deal that spares the company from possible prosecution, the department said. In its settlement with the SEC, PTC also agreed to return $11.9 million in profits it earned through the improper conduct and pay $1.8 million in interest, the SEC said.
During the trips, Chinese officials would typically visit PTC's Massachusetts headquarters for a day and then enjoy leisure activities, including sightseeing and golfing, the SEC statement said. Employees of PTC's Chinese units also gave improper gifts to the Chinese officials, including cell phones, iPods, gift cards and wine, the SEC said.
The improper payments were disguised as legitimate commissions or business expenses in company books and records, the SEC said.
The commission also entered into an agreement with Yu Kai Yuan, an employee at one of the PTC overseas units, which defers possible civil bribery charges against him for three years because he cooperated with the agency's investigation, the SEC said.
Its so-called deferred prosecution agreement with Yuan is the SEC's first against an individual in an FCPA case, the SEC said.
Yuan's lawyer could not be immediately reached for comment.
(Reporting by Suzanne Barlyn; Editing by Lisa Von Ahn and Jonathan Oatis)
