Thursday, September 7, 2006

FCPA Complaint Filed Against Former Executives

The SEC filed a civil complaint alleging that two former executives of ITXC Corp. arranged for the payment of bribes to officials of African state-owned telephone companies to secure business.  The defendants are Steven Ott, the former vice president of global sales, and Roger Young, a former managing director for the Middle East and Africa.  According to the SEC's Litigation Release (here):

ITXC was a publicly-held international telecommunications carrier based in Princeton, New Jersey that sought to do business in Africa. According to the complaint, Ott and Young approved, and in some cases negotiated, bribes that ITXC paid to senior officials of government-owned telephone companies in Nigeria, Rwanda and Senegal, in order to obtain contracts that were necessary for ITXC to be able to transmit telephone calls to individuals and businesses in those countries. The complaint alleges that Ott and Young were responsible for $267,468.95 in bribes that ITXC paid between August 2001 and May 2004. The complaint further alleges that ITXC made $11,509,733 in net profits from the contracts. In 2004, ITXC merged with Teleglobe International Holdings Ltd., which was subsequently acquired by Videsh Sanchar Nigam Ltd. in 2006.

(ph)

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