528 Americans sue Ericsson related to Iraq bribery scandal

Hundreds of Americans filed an AntiTerrorism Act complaint against Ericsson related to the accusations that the telecom vendor paid bribes to ISIS and other terrorism groups in the Middle East.

The suit was filed in the U.S. District Court for the District of Columbia, and it requests a jury trial.

The plaintiffs are 528 Americans, comprised of 165 Gold Star families and numerous former hostages, families of hostages, and severely injured service members. Each plaintiff was injured or is the loved one of someone who was killed or injured, during attacks committed by al-Qaeda or Islamic State in Iraq, Afghanistan and Syria from 2005 through 2021.

Plaintiffs allege that Ericsson regularly paid protection money to terrorists in order to pursue its business interests even though terrorists openly proclaimed their desire for protection money to help fund their campaign to kill Americans in the Middle East.

Ryan Sparacino, founding partner of Sparacino PLLC, which is counsel for the plaintiffs, said in a statement, “Ericsson’s cold calculation was that paying terrorists protection money to ensure safe passage through Iraq would be better for its business.”

He added, “Given Ericsson’s admissions that media reports of its behavior are accurate, the U.S. Department of Justice must make an example out of the company and any person who supported the corruption scheme.”

The lawsuit asks for compensatory and punitive damages to the maximum extent permitted by law, and treble any compensatory damages awarded under the AntiTerrorism Act. 

Sparacino PLLC is the same firm that currently represents more than 1,200 American clients who recently secured a comprehensive Anti-Terrorism Act victory in the United States Court of Appeals for the D.C. Circuit in a separate matter (that is also about how corruption in Iraq financed terrorism) against Johnson & Johnson, Pfizer, GE Healthcare, AstraZeneca and Roche.

Ericsson disclosed in February that an internal investigation found that the company may have made payments to the ISIS terror organization to gain access to certain transport routes in Iraq. The investigation examined the conduct of Ericsson employees, vendors and suppliers in Iraq from 2011 to 2019. Some employees were fired as a result.

During the company’s first quarter earnings call, Ericsson President and CEO Borje Ekholm said the company was “engaging” with the U.S. Department of Justice (DoJ) over its handling of the bribery investigation in Iraq and that it would likely be fined and possibly face other actions.

In June Ericsson was notified by the U.S. Securities and Exchange Commission (SEC) that an investigation has been opened regarding the company’s 2019 Iraq investigation report.

This is the second big bribery scandal to hit Ericsson in recent years. In 2019 the company paid a fine of more than $1 billion related to a corruption investigation by the SEC and the DoJ for bribery activities in six countries: China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam, dating back more than a decade.