US Telecom Company to Pay $3 Million in China Bribe Case

The Justice Department and the Securities and Exchange Commission, which both issued statements on Thursday, said that from 2002 to 2007, UTStarcom paid about $7 million for hundreds of trips by employees of China’s government-owned telecommunications companies to visit the United States for “training” sessions that were often sightseeing vacations to Hawaii, Las Vegas and other tourist locations.

The company also offered jobs to the family members of clients, paid them to attend universities, secured their travel visas and arranged for a “consultant” to bribe a Mongolian official to win a contract, the American officials said.

The actions appeared to violate the Foreign Corrupt Practices Act, which forbids bribing foreign government officials, the officials said.

Those officials did not say why UTStarcom and its executives were not prosecuted.

Often, American officials choose not to prosecute because it is difficult to prove a case beyond a reasonable doubt. Instead, they often opt to pressure companies to reform their operations and pay large fines.