Deep Dive into AAR FCPA Enforcement Action

Corruption Crime & Compliance

How did a high-stakes bribery scheme involving insider deals, Airbus planes, and secret payments bring down a global aviation giant? In this episode, Michael Volkov dives deep into the AAR Corporation FCPA case—a cautionary tale of bribery, insider deals, and compliance failures in high-risk sectors. The DOJ and the Securities and Exchange Commission (SEC) closed 2024 with a major coordinated settlement with AAR Corporation, a provider of aviation products and services. The case involved criminal and civil FCPA charges related to bribery schemes in Nepal and South Africa. Deepak Sharma, the CEO of an AAR subsidiary, orchestrated the schemes, securing insider information and paying bribes to government officials to win lucrative contracts. Despite AAR's late self-reporting, the DOJ credited the company for its cooperation and remediation efforts. The case highlights ongoing corruption risks in the aviation industry, especially where state-owned enterprises and third-party agents are involved.

You’ll hear him discuss:

• The details of the Illinois-based provider of aviation products AAR Corporation FCPA settlement with the DOJ and SEC.
• How Deepak Sharma orchestrated bribery schemes in Nepal and South Africa.
• The separate civil resolution with Deepak Sharma under which Sharma agreed to pay a disgorgement of $130,835 plus prejudgment interest of $53,762.
• The role of third-party agents in facilitating corrupt practices.
• Julian Aires, a former third-party agent of AAR, pleaded guilty in the District of Columbia on July 15, 2024 to a conspiracy to violate the FCPA for his role in the South Africa scheme.
• Why insider information from government officials is a "kiss of death" in compliance.
• How bribes were disguised through sham invoices and shell companies.
• The importance of robust compliance programs in high-risk industries like aviation.
• Red flags to watch for in industries dealing with state-owned enterprises.
• How the DOJ and SEC weigh cooperation and remediation in enforcement actions.
• Key takeaways for compliance professionals from the AAR case.

Resources

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group