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Harry Cassin
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Andy Spalding
Senior Editor

Jessica Tillipman
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Editor Emeritus

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Thomas Fox
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Marc Alain Bohn
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Bill Waite
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Shruti J. Shah
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Russell A. Stamets
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Richard Bistrong
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Eric Carlson
Contributing Editor

A Life Sentence In Vietnam, Where Risks Abound

A Vietnamese official who took bribes from a Japanese company promoting road-building projects was sentenced to life in prison Monday, according to an AP report.

Huynh Ngoc Sy, 57, was found guilty of accepting $262,000 from Pacific Consultants International, or PCI. The court also ordered the confiscation of his personal property.

In early 2009, PCI’s former president and three executives pleaded guilty to bribing Sy to secure contracts for road projects backed by Japanese aid money. They paid Sy $820,000 while he was head of Ho Chi Minh City’s transport department and promised him nearly $2 million more.

When the scandal broke in 2008, Japan — Vietnam’s biggest trading partner — suspended aid loans to the country. It restarted the funding in March 2009.

Following their guilty pleas in Japan, the PCI executives escaped serious punishment. The judge suspended the ¥70 million ($860,000) fine he imposed and they didn’t serve any jail time.

Japan has a poor anti-corruption enforcement record. According to a report released in June by the OECD’s working group on bribery, the world’s third largest economy reported only eight enforcement actions against overseas bribery during the 10 years from 1999.

In PCI’s case, the Japanese government may have felt forced to act. The tainted Vietnam road project was partially financed by $330 million of Japanese taxpayer-funded foreign aid.

Vietnam ranks 120 on the corruption perception index, tied with Armenia, Bolivia, Ethiopia, Kazakhstan, and Mongolia.


Because of the long-running American trade embargo, there were no FCPA-related enforcement actions involving Vietnam until a couple of years ago. But since then there have been several:

Veraz Networks, Inc.: In June this year, the San Jose, California-based VOiP company paid $300,000 to settle civil charges brought by the SEC that it violated the FCPA’s books and records and internal controls provisions by making illegal payments to foreign officials in China and Vietnam. In 2007 and 2008, the SEC said, a Veraz employee made improper payments to the CEO of a government-controlled company in Vietnam.

Daimler AG: In March this year, the German vehicle maker was charged in a criminal information with FCPA-related violations involving at least 22 countries, including Vietnam. It paid $185 million to settle with the DOJ and SEC.

Aon Ltd.: In January 2009, the U.K.’s Financial Services Authority fined insurance services firm Aon Ltd. for failing to control compliance risks in a number of countries, including Vietnam. Parent Aon Corporation self-reported a compliance investigation to the DOJ and SEC in 2007, and agreed with U.S. prosecutors to toll any applicable statute of limitations. The U.S. investigations are still pending.

Nam Nguyen, Kim Nguyen, An Nguyen, Joseph Lukas, and Nexus Technologies: In 2008, the U.S. citizens and their Philadelphia-based company were charged with violating the FCPA by bribing government officials in Vietnam. The bribes were intended to secure contracts to supply high-tech items — including third-party underwater mapping and bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. They pleaded guilty and were sentenced this year. Two were jailed for 16 and nine months respectively, two were given suspended sentences, and the company agreed to dissolve.

Siemens AG: In December 2008, Siemens’ guilty plea to FCPA books and records violations involved numerous countries, including Vietnam. The SEC’s complaint said Siemens’ medical division “paid $183,000 in early 2005 and $200,000 in early 2006 in connection with the sale of approximately $6 million of medical devices on two projects involving the Vietnamese Ministry of Health.” And in 2002, the complaint said, Siemens’ communications division paid about $140,000 in bribes as “part of a much larger bribery scheme concocted by high-level managers at Siemens regional company in Vietnam, SLV, to pay bribes to government officials at Vietel and the Vietnamese Ministry of Defense in order to acquire Phase I of the Vietel GSM tender.” Siemens paid $800 million to settle with the DOJ and SEC.

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