French Supplier to Pay $1.5M Fine for Lying on Source of Parts Sent to US Transit Agencies
The U.S. Attorney's Office for the Southern District of New York on July 22 reached a non-prosecution agreement with French bus parts supplier CBM, under which the company will pay a $1.5 million fine for lying about the source of bus parts supplied to "U.S. transit authority customers" from 2010 to 2021, the office announced.
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The agreement will also see CBM forfeit its profits made from the scheme, totaling $463,243.41, and pay restitution to the victims of the scheme and "revert unclaimed funds up to $438,859.52" to DOJ's Crime Victims Fund. CBM agreed to cooperate with the U.S. for the next two years by self-reporting "any future violations of U.S. law" and continue implementing "an adequate compliance program."
The U.S. Attorney's Office said the deal "reflects a careful weighing of factors relevant to the appropriate corporate resolution," including CBM's cooperation with the prosecutors via "detailed disclosures and accountings of conduct not already known when CBM’s cooperation began." Other considered factors include that the company's worst wrongdoing "was limited to two individuals, though they were at the highest levels of the company"; the company's lack of criminal history; CBM's "extensive remedial measures"; and the company's acceptance of full responsibility and efforts to "make full restitution."
CBM began contracting with U.S. metropolitan transit authorities in 2014, agreeing to supply various bus parts, including brakes, brake pads, ignition coils and wheel hubs. The transit authorities contracted with CBM to buy brand-name parts, which are "generally considered to be of higher quality," the U.S. Attorney's Office said.
Instead of supplying these parts, CBM sold the transit authorities generic or alternate parts. The office said the scheme was limited to and directed by then company CEO Samuel Turboust and Director/Purchasing Director Mathias Urban.