Bio-Rad Laboratories agreed this week to pay a total of $55 million to settle DOJ and SEC claims that its subsidiaries made improper payments to foreign officials in Russia, Vietnam, and Thailand to win business.

Bio-Rad paid a $14.35 million criminal penalty to make DOJ criminal charges go away. DOJ claimed that Bio-Rad violated the Foreign Corrupt Practices Act by cooking its books and records, and failing to have adequate internal controls in connection with sales in Russia. Bio-Rad was successful in getting a non-prosecution agreement with the DOJ, so it will dodge formal criminal charges (more about that later), but it has to report its FCPA compliance efforts for two years.

In a parallel SEC enforcement action, Bio-Rad will pay $40.7 million in disgorgement (paying back the profits it earned illegally) and prejudgment interest. Because Bio-Rad was cooperative, the SEC resolved its claims through an administrative order, rather then going through the more expensive and more time-consuming court route. The SEC said that Bio-Rad violated the Anti-bribery, Internal Controls, and Books and Records Provisions of the FCPA. The SEC alleged that Bio-Rad “…lacked sufficient internal controls to prevent or detect approximately $7.5 million in bribes that were paid during a five-year period and improperly recorded in books and records as legitimate expenses like commissions, advertising, and training fees.” Bio-Rad made $35 million in profits through those bribes, according to the SEC.

In Russia, Bio-Rad SNC, its French subsidiary, paid agents commissions of 15-30 percent “…in exchange for various services in connection with certain governmental sales,” said the DOJ. However, those intermediaries didn’t perform any services. Some of the payments masquerading as commissions went to sales agents with phony Moscow addresses and off-shore bank accounts, said the SEC. Unfortunately for Bio-Rad, those agents had no employees and no capacity to perform the supposed services, and were retained primarily to influence Russia’s Ministry of Health and help the company win bids for governmental contracts.

The SEC says that Bio-Rad managers repeatedly ignored red flags that the Russian agents were probably bribing government officials “…and they condoned an atmosphere of secrecy.”

Company employees also used local agents in Vietnam and Thailand to funnel bribes from a Singapore subsidiary to foreign officials in exchange for business, according to the SEC.

Here is the important lesson: the DOJ said that it gave Bio-Rad a non-prosecution agreement because of the company’s self report and full cooperation. That cooperation, a DOJ spokesman said, included “voluntarily making U.S. foreign employees available for interviews, voluntarily producing documents from overseas, and summarizing the findings of its internal investigation.” Bio-Rad agreed to enhance its anti-corruption policies all over the world, to improve its internal controls and compliance functions, to put in place additional due diligence and contracting procedures for agents, and to conduct extensive anti-corruption training throughout the organization.

So, don’t fall for the all-too-common, and often whispered “let me bribe for you” offer of foreign “agents.” For bet-the-company sake, don’t condone or allow bribery of governmental officials, and if you learn of unauthorized illegal contact of that kind, hire outside counsel to perform an internal investigation, and let those attorneys report the results to the government before the DOJ and SEC find out about the conduct, as they probably eventually will.