HP Expands Scope Of Layoffs, Says US Bribery Case Close To Resolution

Hewlett-Packard said Monday it's in "advanced discussions" with the U.S. Department of Justice and the Securities and Exchange Commission about their investigations of alleged bribery, embezzlement and tax evasion by current and former HP employees working outside the U.S.

One of the investigations centers on a $44.5 million deal between Hewlett-Packard ISE GmbH, a former Germany-based HP subsidiary, and the General Prosecutor's Office of the Russian Federation. The deal, which ran from 2001 to 2006, covered the delivery and installation of an IT network, HP said in its annual 10-K filing.

The German PPO has already indicted one current and two ex-HP employees in the case. The U.S. agencies, which began looking into the deal in 2010, are apparently ready to close their investigation into whether HP employees violated the U.S. Foreign Corrupt Practices Act (FCPA), which restricts bribery of foreign officials.

[Related: RSA Denies Report That NSA Paid It $10 Million For Encryption Back Door ]

Sponsored post

"HP is cooperating with these investigating agencies. In addition, HP is in advanced discussions with the U.S. enforcement agencies to resolve their investigations," HP said in the 10-K filing.

In a separate case, U.S. enforcement authorities are working with the Polish Central Anti-Corruption Bureau to investigate whether a former HP employee violated the FCPA in closing public sector deals in Poland, according to the filing.

The SEC and DOJ are also looking at "certain other public-sector transactions" in Russia, Poland, Mexico, the Commonwealth of Independent States and other countries, HP said in the 10-K. HP could face fines and civil penalties of up to $725,000 per violation and criminal penalties of up to $25 million per violation, or up to twice the gain from the violation.

"Although we implement policies and procedures designed to facilitate compliance with these laws, our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, may take actions in violation of our policies," HP said in the 10-K. "Any such violation, even if prohibited by our policies, could have an adverse effect on our business and reputation."

HP has been dealing with bribery allegations against employees for the past several years. In 2010, HP paid a $55 million settlement to the DOJ over allegations that it paid kickbacks to technology partners in order to secure lucrative government contracts.

In 2009, HP irritated many of its global network of 154,000 channel partners by requiring them to take an anti-bribery training as part of a $120 regulatory compliance-training program.

Also in the 10-K, HP said it now expects to lay off 34,000 employees -- 5,000 more than its previous estimate -- due to "continued market and business pressures" by the end of HP's fiscal year next June. HP said in October at its meeting with Wall Street analysts that its actual number of layoffs could exceed its previously indicated 29,000 figure.