Voting Machine Company Smartmatic Charged in Federal Indictment That Previously Only Charged Executives
The Justice Department has filed charges for the first time against a voting machine company whose systems are used in Los Angeles County, one of the largest election jurisdictions in the country.
The company – UK-based Smartmatic and its parent company SGO – is charged, along with the former president of the company and two other former executives, with engaging in a years-long bribery and money-laundering scheme allegedly set up to pay bribes to an election official in the Philippines in order to win a lucrative contract there. Prosecutors say at least one of the executives funneled money from the slush funds to pay himself as well.
Mark Rasch, a former US federal prosecutor, says the addition of Smartmatic and its parent company to the indictment means that if prosecutors gets a conviction, the court could impose penalties that include fines, oversight requirements and regulation and also prevent the company from doing business with the US federal or state governments or receiving federal funds.
"What generally happens is companies are charged and individuals [in the company] get away with it," he says. "The reason you charge a corporation in addition is the recovery of fines and restitution. These are obviously going to be much greater from a corporation than you can get from an individual."
Smartmatic doesn't sell voting machines to the federal government – states purchase equipment on their own. But if a state or county is using federal funds to purchase voting machines, this could prevent a county like LA from continuing to do business with the firm.
Last year, prosecutors in the Southern District of Florida filed corruption charges under the Foreign Corrupt Practices Act (FCPA) against Roger Piñate, a Venezuelan citizen and the former president and co-founder of Smartmatic, a voting machine vendor founded in Boca Raton, Florida before moving to the UK. He was charged with Jorge Vasquez, a US citizen and the company’s former vice president of hardware development, as well as Elie Moreno, a Venezuelan-Israeli who oversaw Smartmatic’s Philippine contracts. But prosecutors did not charge the company at the time.
Smartmatic has highlighted this point repeatedly to journalists over the last year to underscore that its former executives were accused of wrongdoing, but not the company itself. Now prosecutors have charged the company because they say the employees engaged in the corrupt activity to assist SGO and others in obtaining and retaining business for and with, and directing business "for the benefit of SGO, Smartmatic International" and others.
Vasquez left the company before the charges were filed, and Smartmatic put Piñate and Moreno on administrative leave after the announcement of their indictments last year.
Prosecutors allege that the indicted executives conspired with the owner of Jarltech International, a company in Taiwan that made voting machines for Smartmatic. The scheme involved Jarltech overcharging Smartmatic $10-$50 per voting machine that the company made for Smartmatic to sell to the Philippines and putting the extra earnings into slush funds from which they allegedly paid more than $1 million in bribes to Juan Andres Bautista, who was chair of the Philippine elections commission at the time.
The bribes helped the company win contracts worth more than $180 million to supply about 90,000 voting machines and related election services to the Philippines for its 2016 national elections, authorities say.
Prosecutors say they created fraudulent contracts, purchasing agreements and other transactions with shell companies that they established to launder the money to Bautista. Bautista, who has also been indicted, allegedly passed the $1 million bribery money to a family member who used it to purchase a 2-bedroom condo in the tony Pacific Heights neighborhood of San Francisco
Prosecutors also say that at least one of the Smartmatic employees funneled money from the company's $282 million voting machine contract with Los Angeles County into slush funds in 2019, but did not say if the money was used to pay bribes and did not include this in the actual charges. The information was included in the indictment, prosecutors say, only to show an alleged pattern of corrupt activity.
A Smartmatic spokeswoman called the new charges against the company "spurious" and denied the allegations. She also suggested the prosecutors are politically motivated.
"This is wrong on the facts and wrong on the law. We will contest the claims, and we are confident we will prevail in court," she wrote in an email. "We believe the U.S. Attorney’s Office for the Southern District of Florida has been misled and politically influenced by powerful interests, despite our extensive cooperation with the government. This is again, targeted, political, and unjust."
The original indictment, which did not charge Smartmatic and SGO, was made under President Biden's former administration – a decision that has now been reversed by the Trump administration's Justice Department. Criminal indictments of companies are rare, but Rasch says prosecutors may have uncovered new facts to merit charging the company as well. For example, he says, prosecutors may have discovered that the executives were "stealing for Smartmatic, not stealing from Smartmatic."
In charging the companies, Smartmatic and its parent company become liable for the action of their executives "who are acting within the scope of their employment and for the benefit of the company," Rasch says.
He does not, however, rule out the possibility that politics and the administration's animosity toward the company may be playing a role in the change.
Following President Trump's loss in the 2020 presidential election, he and a number of followers and right-wing media outlets falsely accused Smartmatic of altering software in voting machines to help President Biden win the election, even though the company's machines were only used in LA County. Smartmatic filed multiple defamation lawsuits against Newsmax, the One America News Network, Fox News, MyPillow founder Mike Lindell and other Trump allies who amplified the allegations.
Last year the company settled its suit against Newsmax for $40m and also settled its suit against One America News for an undisclosed sum. Other suits, including a $2.7 billion suit against Fox News, are ongoing.
"Given the high profile of Smartmatic and the judgments that Smartmatic received in their defamation cases, you’ve always got to question whether these criminal investigations and prosecutions have a political motive," says Rasch.
Last February, President Trump paused enforcement of the FCPA for 180 days and ordered the attorney general to review existing guidelines and policies governing investigations and enforcement actions and "review in detail all existing FCPA investigations or enforcement actions and take appropriate action with respect" to them. Any enforcement actions that continue after this period "must be specifically authorized by the Attorney General." This suggests that Attorney General Pam Bondi may have specifically authorized the charging of Smartmatic and SGO. Zero Day has reached out to the US attorneys office in the Southern District of Florida to confirm this and will update the story if they respond.
The consequences could potentially be devastating for the company should prosecutors win a conviction, Rasch says.
"There is something called the corporate death penalty; while a corporation can’t be sent to jail, it can be killed in rare or extreme cases of pervasive criminality," he notes. The court could essentially fine the UK parent company "into oblivion" and "make it so that they can’t do business in the US anymore."
This possibility, he says, could make SGO and Smartmatic, as well as the three executives, more amenable to reaching a plea agreement, which may be the government's goal.
10.17.25: This story has been updated to add information about a pause in the FCPA.