Grand jury handed evidence on Avon

NEW YORK, Feb. 13 (UPI) -- U.S. prosecutors have handed a grand jury evidence on Avon Products Inc.'s alleged bribery of Chinese officials, sources told The Wall Street Journal.

Allegedly, Avon bribed Chinese officials while seeking a permission to do sales door-to-door in China. Some of these payments were even listed as gifts on company books, one source told the Journal.

Bribing foreign officials is a violation of the Foreign Corrupt Practices Act. The ability to lands contracts or regulatory approvals through bribes, of course, creates an uneven playing field for rival businesses.

The case against Avon involves company audits from 2005. In 2008, Avon admitted that it was aware of an investigation concerning potential bribery charges.

Questionable payments allegedly appearing on the company's books is one matter. But investigators are trying to figure out if any executives were aware of bribes and what they did or did not do about it, the Journal reported

There is also a legal concept known as "willful blindness." Executives choosing to look the other way cannot, in that case, always plead they did not know what was going on. If they suspected a crime was taking place and failed to investigate the matter, the executives can be held liable, the Journal said.

Avon, for example, conducted an internal investigation of their own, but did so, the firm says, after receiving a letter in 2008 that brought the matter to their attention.

But authorities say the evidence of bribery also appeared two years earlier on the company's books.

"We're not aware that a federal grand jury is investigating this," an Avon spokeswoman said, referring to the any allegations of willful blindness.

Otherwise, Avon is cooperating with authorities in the investigation, she said.