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joab_jackson
U.S. Correspondent

DOJ Charges Siemens Execs with $100 Million Bribery Scheme

News
Dec 13, 20113 mins
CybercrimeData and Information SecurityLegal

Ex-Siemens executives face bribery charges in an attempt to secure a $1 billion Argentine government contract

The U.S. Department of Justice has charged that six ex-Siemens executives bribed Argentine government officials in order to win a US$1 billion contract to provide national identity cards to the country’s citizens.

“The allegations in this indictment reflect a stunning level of deception and corruption,” said DOJ Assistant Attorney General Lanny Breuer, in a press conference held Tuesday.

The former Siemens executives charged with violations under the Foreign Corrupt Practices Act (FCPA) are Uriel Sharef, who was on the Siemens board of directors,Herbert Steffen, Andres Truppel, Urlich Bock, Eberhard Reichert, and Stephan Signer. None of the defendants currently work for Siemens. They each face up to 20 years in prison.

“This is the first time a former board member of a Global Fortune 50 company has been charged with FCPA violations,” Breuer said.

The executives had planned to pay $100 million in bribes and had forked over $60 million, the DOJ said. The defendants face up to 20 years in prison. The DOJ filed the case in the U.S. District Court for the Southern District of New York.

Siemens, which is based in Munich, has already paid US$1.6 billion in fines in 2008 for money laundering. These current charges are against specific company executives and associated agents.

The charges stem from work around a $1 billion contract put up for bid by Argentina in 1994 to provide the nation’s citizens with national identification cards. A consortium led by Siemens won the contract in 1998. The DOJ charges that from 1996 to 2009 the defendants, acting on behalf of Siemens, engaged in bribery, fraud and other forms of corruption to win, and then maintain the contract with the government.

They money was filtered to the government officials in various ways, including offshore shell companies, fake consulting contracts and large amounts of cash carried across national borders, the DOJ charged.

In a statement to the press, a Siemens official asserted that “the company is not indicted. We can’t comment on proceedings against individuals.” The DOJ said that company aided the agency in building its case against the former executives.

In addition, two other individuals who worked on behalf of Siemens were also charged, Carlos Sergi[cq] and Miguel Czysch[cq].

Siemens was charged with similar actions in Venezuela, Bangladesh, and Greece.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab’s e-mail address is Joab_Jackson@idg.com