Two former senior executives of U.S.-based Panasonic Avionics Corporation settled SEC charges Tuesday related to FCPA offenses that Panasonic Corporation and the U.S. aviation unit settled earlier this year.
Paul A. Margis, 64, the former chief executive of Panasonic Avionics, and Takeshi “Tyrone” Uonaga, 55, its former chief financial officer, settled with the SEC without admitting or denying the SEC’s findings.
The SEC charged them with knowingly violating the books and records and internal accounting controls provisions and causing similar violations by the parent company.
The agency brought the charges using internal administrative orders and didn’t go to court.
Margis paid a $75,000 penalty to resolve the charges.
Uonaga paid a penalty of $50,000 and was barred for at least five years from appearing or practicing before the SEC as an accountant.
In April this year, Panasonic Corporation and Panasonic Avionics paid $280 million to resolve FCPA offenses for payments to consultants of Panasonic Avionics in the Middle East and Asia.
Osaka, Japan-based Panasonic Corporation disgorged $143 million to the SEC to settle the offenses. Panasonic Avionics paid $137 million in criminal penalties to the DOJ as part of a deferred-prosecution agreement.
Panasonic Avionics, headquartered in Lake Forest, California, develops in-flight entertainment systems and global communication services for airlines.
The SEC said that while Panasonic Avionics was negotiating two agreements worth at least $700 million with a foreign government-owned airline, Margis authorized the company to offer a government official a $200,000 a year post-retirement consulting position.
“Ultimately, [Panasonic Avionics] retained the government official and paid approximately $875,000 for his position, which required little to no work,” the SEC said.
Margis and others arranged for the official to be paid through a third-party vendor that provided unrelated services to Panasonic Avionics.
“Margis also authorized payments of more than $900,000 through the third-party vendor for the retention of two other individuals as consultants, although they provided little to no services,” according to the SEC’s order.
Panasonic Avionics falsely recorded the payments in its books and records, the SEC said.
Margis also misled Panasonic Avionics’ auditor about its accounting controls and the accuracy of the books and records.
He left the company in 2017.
Uonaga, Panasonic Avionics’ CFO until he was fired in early 2018, caused the parent company, Panasonic Corporation, to improperly record $82 million in revenue based on a backdated contract, the SEC said.
He also made false representations to Panasonic Avionics’ auditor about financial statements, internal accounting controls, and books and records.
Richard L. Cassin is the publisher and editor of the FCPA Blog.