The SEC charged one of the world’s largest producers of premium alcoholic beverages with widespread FCPA violations.  London-based Diageo plc, producers for the Johnnie Walker brand of scotch and other liquors, allegedly paid more than $2.7 million, through subsidiaries, to obtain lucrative sales and tax benefits - in India, Thailand, and South Korea over a 6-year period. 

SEC Allegations.  $1.7mn in illicit payments was paid to hundreds of government officials in India from 2003 to mid-2009.  The officials were responsible for purchasing or authorizing the sale of its beverages in India, and increased sales from these payments yielded more than $11 million in profit for the company.

From 2004 to mid-2008, Diageo paid some $12,000 per month – totaling $600,000 – to retain the consulting services of a Thai government and political party official. 

One Korean customers official received $86K for arranging significant tax rebates.  Diageo paid for other officials - T&E and gifts. 

The payments were recorded on the books as legitimate expenses for 3rd-party vendors or private customers, or they were categorized in false or overly vague terms.  In other instances, nothing was booked. 

Fines and Sanctions.   Diageo agreed to pay nearly $17 million in disgorgement, prejudgment interest and penalties. 

This is Administrative Proceeding Release No. 34-64978.   SEC staff credits:  Marilyn Ampolsk and Scott Weisman.   [SEC PR 11-158, 7/27/11]