US jury hears claims against Avon in bribery case: report


WASHINGTON–U.S. prosecutors investigating whether U.S. executives at beauty products company Avon broke foreign-bribery laws have presented evidence in the probe to a grand jury, The Wall Street Journal reported Monday.

Citing unnamed people familiar with the matter, the newspaper said that authorities are focused on a 2005 internal audit report by the company that concluded Avon employees in China may have been bribing officials in violation of the Foreign Corrupt Practices Act. Avon had earlier said it first learned of bribery allegations in 2008, the report said.

The audit found several hundred thousand dollars in questionable payments to Chinese officials and third-party consultants in 2005, the paper said.

It came as Avon was pursuing a license to conduct door-to-door sales in China, The Journal noted. Some of the payments were recorded on invoices as gifts for government officials, the paper said. Avon secured China’s first such license to a foreign company in 2006. The Federal Bureau of Investigation and U.S. prosecutors in New York and Washington are trying to determine whether current or former executives ignored the audit’s findings or actively took steps to conceal the problems, The Journal said. Legal experts say executives can be liable in overseas bribery cases even if they didn’t authorize illegal payments or try to hide evidence of bribes, the paper pointed out. Under a legal concept known as willful blindness, a person can also be found guilty of taking steps to avoid learning of wrongdoing, the report noted.