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Nissan Motor Co., its ousted chairman Carlos Ghosn and former director and in-house lawyer Greg Kelly have agreed to pay a combined $16.1 million to the U.S. Securities and Exchange Commission to settle fraud allegations.

Ghosn and Kelly allegedly schemed to hide more than $140 million in compensation and retirement benefits that Ghosn stood to collect, according to the SEC. Kelly, who has been described as Ghosn's right-hand man, joined Nissan in 1988 as the senior legal manager and deputy lawyer of the Japanese carmaker's North American division.

The SEC announced Monday that Nissan had agreed to pay a $15 million civil penalty to settle its liability in the alleged scheme, while Ghosn and Kelly agreed to penalties of $1 million and $100,000, respectively. They all reached the civil settlement without admitting or denying the SEC's allegations. 

As part of the settlement, Ghosn also agreed to be barred for 10 years from serving as an officer or director, while Kelly agreed to a five-year officer-and-director ban and a five-year suspension from practicing or appearing before the SEC as an attorney. 

Nissan said in a statement that the company "provided significant cooperation to the SEC and has promptly implemented remedial acts to prevent recurrence, including transitioning to a new governance structure with three statutory committees (audit, compensation and nomination)."

Ghosn's defense team, which includes Brad Karp and Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison in New York, noted in a statement that the settlement allows Ghosn to continue to fight the criminal charges he faces in Japan, where prosecutors allege he misused company funds and hid millions in income.  

"Mr. Ghosn and his defense team are now able to focus their efforts on continuing to vigorously fight the criminal case in Japan and pursue his claims against Nissan around the world," Ghosn's attorneys added. "They remain confident that, if given a fair trial, he will be acquitted of all charges and fully vindicated."

According to the SEC, Nissan's board gave Ghosn the authority to set individual director and executive compensation levels beginning in 2004, and Kelly subsequently helped the executive hide more than $90 million in compensation from public disclosure while also inflating his retirement allowance by $50 million. 

The SEC found that the undisclosed compensation and retirement benefits were never paid out to Ghosn. 

In carrying out the scheme, Kelly and other Ghosn subordinates allegedly used secret contracts, backdated letters, dubious calculations and duped the company's chief financial officer, which resulted in Nissan issuing a misleading financial disclosure, according to the SEC. 

Kelly, who oversaw Nissan's human resources department in the mid-2000s and was named an executive officer in 2008, was promoted to representative director in 2015 and bumped up to serve as company director in 2018. Later that same year, Japanese authorities arrested Ghosn in Tokyo. 

He has since been removed as chair of Nissan and its partner Mitsubishi Motors Corp. and resigned as chairman and CEO of the companies' French partner, carmaker Renault.

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