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Feds charge eight former Siemens officials with bribery

$100m allegedly paid to secure Argentine identity cards

Internet Security Threat Report 2014

US officials have charged more than a dozen former executives and contractors of Siemens of conspiring to spend $100 million in bribes to secure a $1 billion contract to produce national identity cards for Argentine citizens.

A criminal indictment filed on Tuesday against eight former officials of the German industrial giant alleges they employed shell companies, Swiss bank accounts, double-dealing middlemen, and cross-border cash smuggling operations in the decade-long bribery scheme. The charges for alleged violations of the Foreign Corrupt Practices Act come three years after Siemens paid a combined $1.6 billion to settle accusations in the US and in Germany to settle accusations that it paid bribes in an effort to win business in several countries.

A separate civil complaint filed by the Security and Exchange Commission accuses seven former Siemens officials of funneling more than $100 million in bribes to high-ranking Argentine politicians, including two of the country's presidents and various members of their cabinet.

The scheme dates back to the late 1990s, when Siemens paid bribes to obtain a contract to produce identity cards known as Documentos Nacionales de Identidad for every Argentine citizen. A few years later, following the election of a new president, the Siemens officials paid additional bribes to curtail plans to cancel the pact. During an arbitration proceeding that followed, the officials paid still more bribes to have evidence suppressed that the contract was originally obtained through corruption.

In the process, Siemens officials paid more than $100 million and signed a $27 million sham consulting agreement to a shell corporation known as MFast Consulting to provide a vehicle to fulling payments to government officials. None of the defendants in the criminal case resides in the US, officials said. Each could face up to 20 years in prison for money laundering.

They included Uriel Sharef, who from 2000 to 2007 was a Siemens managing board member, a position just below the rank of chief executive. Ulrich Bock, a former senior executive of Siemens Business Services, smuggled $10 million in cash across the Swiss border in 1999 to set up bank accounts there, according to the indictment.

Other former Siemens officials named in the actions included Herbert Steffen, former chief executive of Siemens Argentina; Andres Truppel, former chief financial officer of the subsidiary; Stephen Signer and Eberhard Reichert, former senior executives of Siemens Business Services; and Miguel Czysch, who served as an intermediary in the alleged scheme.

A PDF of the SEC complaint is here, and a copy of the Justice Department press release is here. ®

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