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A felony plea deal between federal prosecutors and an ATM manufacturer holds some valuable lessons for corporations. The first lesson is: Don’t lie to the feds. In an unusual case, Nautilus Hyosung Holdings Inc., a Delaware corporation, agreed to plead guilty this week to two counts of obstruction of justice related to a civil premerger investigation by the Department of Justice’s antitrust division. (Most criminal cases handled by the antitrust division involve price fixing or bid rigging and are filed by DOJ’s criminal division.) The plea agreement [PDF] states that in the summer and fall of 2008, Nautilus Hyosung Inc., the South Korean parent company, submitted false documents to the Federal Trade Commission and the DOJ relating to a proposed merger with Triton Systems of Delaware Inc., a competing ATM maker. A person identified only as “Executive A” allegedly falsified the documents and directed other employees to falsify records, in an effort to minimize the competitive impact of the merger, according to the charging documents [PDF]. Carey Dunne, a litigation partner at Davis Polk & Wardwell in New York who represented the company, declined comment. The company has now dropped its merger plans. The plea deal states that the government will not prosecute the company’s directors or officers, but makes an exception for someone named Kyoungwon Pyo, without identifying him further; Dunne wouldn’t say who this is. Kenneth Gaul, an attorney with the antitrust division, handled the plea deal. He didn’t return calls, and a DOJ spokesperson declined comment. Lesson number two from the case: You might want to hire some in-house counsel. Sources close to the case say the defendant didn’t have in-house lawyers and used outside counsel to handle the merger. The outside counsel didn’t know that the information in the filed documents was false, added the sources (who were not authorized to speak about the case). And lesson number three: It pays to come clean. When the parent company learned of the false documents, it alerted the DOJ’s antitrust division and cooperated in the government’s ongoing investigation. As a result, the subsidiary received a slap on the wrist—a $200,000 criminal fine. The plea deal took into consideration the “nature and extent of the company’s disclosure of wrongdoing and its cooperation” with the investigation, according to a DOJ statement. The deal and penalty are subject to court approval. The case was assigned this week to U.S. District Court Judge Robert Wilkins in Washington, D.C.

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