AAR CORP, an aviation services company based in Wood Dale, Illinois, has agreed to pay over $55 million following investigations by the U.S. Department of Justice and the Securities and Exchange Commission into violations of the Foreign Corrupt Practices Act (FCPA). The company's involvement in bribery schemes aimed at securing business with state-owned airlines in Nepal and South Africa was uncovered.
The company has entered into an 18-month non-prosecution agreement with the Department of Justice. AAR admitted that between 2015 and 2020, it conspired to pay bribes to government officials to secure business deals. These actions resulted in nearly $24 million in profits for AAR.
U.S. Attorney Graves stated, "Companies competing on a fair and level playing field is a core value that we expect any U.S. company or anyone doing business in the United States to embrace." He emphasized the negative impact of bribery schemes on lawful businesses.
Chief Counselor Brent Wible highlighted that "AAR bribed high-level government officials" resulting in significant illicit profits. He noted that companies reporting misconduct proactively might receive credit under certain policies.
Special Agent William S. Walker commented on AAR's violation of U.S. laws designed to prevent foreign corruption, reinforcing HSI's commitment to enforcing accountability within global commerce.
In Nepal, AAR secured business with Nepal Airlines Corporation through bribes offered via intermediaries. In South Africa, it won a contract with South African Airways Technical using similar tactics.
As part of its agreement, AAR will pay approximately $26 million as a penalty and $18 million in administrative forfeiture. Additionally, it will pay over $29 million as part of the SEC's investigation resolution. The Justice Department agreed to credit part of these payments against what is owed to the SEC.
AAR committed to enhancing its compliance program during the NPA term and cooperating with ongoing investigations. The resolution considered several factors including self-reporting before awareness of departmental scrutiny but did not classify as voluntary self-disclosure under existing policies due to prior media reports about potential irregularities.
Two individuals related to this case have been charged: Deepak Sharma pleaded guilty for his role in Nepal's scheme while Julian Aires admitted guilt concerning activities in South Africa.
The investigation is being conducted by HSI New York while Assistant U.S Attorney Madhu Chugh along with other members from different divisions are prosecuting this case with support from international affairs offices focusing on FCPA enforcement efforts globally.
More information about FCPA enforcement can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.