Siemens fined $1.6bn for international fraud
German engineering giant Siemens Aktiengesellschaft (Siemens AG) and three of its subsidiaries have pleaded guilty to paying $1.4 billion in contract winning bribes to foreign officials.
At the District Court in Columbia, Siemens AG pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) and agreed to pay $1.6 billion in fines to US and European authorities.
It is the largest ever monetary sanction ever imposed in an FCPA case since the act was passed in Congress in 1977. Siemens AG’s lawyers, however, are celebrating a victory of sorts as the company could have been fined up to $2.7 billion.
The investigation against Siemens AG – co-ordinated by the US Department of Justice, the Securities and Exchange Commission, and German authorities – found that Siemens started systematically falsifying its corporate records in the mid-1990s.
The falsified records were used to cover up payments of $1.36 billion, made for a variety of dubious reasons.
Much of the money was carried as cash in suitcases, and paid in bribes to foreign officials, winning Siemens AG lucrative development contracts.
A $1.8 million kickback to the Iraqi government ensured contracts with the Ministries of Electricity and Oil during the oil for food programme. Siemens AG’s profits from this endeavour were over $38 million.
In Argentina, the company bribed its way in to working on ID cards, whilst in Venezuela illegal payments to officials secured favourable treatment when bidding for contracts on the country’s railways.
The FCPA makes it a federal crime for companies traded on US markets to pay bribes in return for business.
Category: Insurance News, Legal News
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