WASHINGTON, (Reuters) - Florida-based defense company IAP Worldwide Services Inc will pay $7.1 million to settle a U.S. investigation into an alleged conspiracy to bribe Kuwaiti officials to win a government contract, the U.S. Justice Department said on Tuesday.
A former vice president of IAP, James Michael Rama, 69, of Lynchburg, Virginia, also pleaded guilty earlier on Tuesday in a Virginia federal court to participating in the illegal scheme, prosecutors said in a statement.
A lawyer for Rama was not immediately identifiable.
According to prosecutors, in February 2006 senior executives at IAP, including Rama, set up a shell company called Ramaco to compete in the first phase of a bid to provide surveillance capabilities, including closed-circuit television, to Kuwait’s Ministry of the Interior.
The aim was to win the first phase of the contract, and use the shell company to tailor the requirements for the contract’s implementation stage to IAP without the Kuwaiti government’s knowledge.
As part of the scheme, Rama and IAP also funneled almost $1.8 million between 2006 and 2008 to a consultant who would pay bribes to Kuwaiti government officials to help IAP retain and win both contracts, the Justice Department said.
IAP spokeswoman Maureen Fitzgerald said the company accepted full responsibility for its actions and was firmly committed to improved ethics and compliance programs.
She added that Rama left IAP more than seven years ago.
The Justice Department said it entered into a non-prosecution agreement with IAP, which allows it to escape criminal charges, due to the company’s cooperation with federal authorities.