Eight former Siemens senior executives and agents were charged with plotting to pay $100 million in bribes to secure a $1 billion contract to produce national identity cards for Argentine citizens, in a scam involving a “shocking level of deception and corruption,” an assistant U.S. attorney general said Tuesday.
An indictment returned late Monday in federal court in New York charged the defendants with conspiring together from 1996 to early 2007 when they worked for the German engineering company based in Munich.
A former member of the central executive committee of Siemens AG, Uriel Sharef, and two former chief executives of Siemens Argentina were among those charged with conspiracy to violate the Foreign Corrupt Practices Act and the wire fraud statute, the Justice Department said. They were also charged with money laundering, conspiracy and wire fraud.
“Today’s indictment alleges a shocking level of deception and corruption,” Assistant Attorney General Lanny Breuer said. “Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials.”
The charges against Sharef marked the first time a board member of a Fortune Global 50 company had been charged in a Foreign Corrupt Practices Act case, Breuer said. He was not in custody Tuesday. A message left with a lawyer who has represented him in the past was not immediately returned. None of the bribe recipients were named in the indictment, and none of the defendants are in the United States.
Breuer said it was Justice Department policy not to name people who are not indicted and that the U.S. would work with other countries to bring the defendants to justice.
Seven of the defendants were also charged in a civil case in New York in which the Securities and Exchange Commission accused them of violating the Foreign Corrupt Practices Act. It’s the largest action the SEC has ever brought against people accused of bribing foreign officials, said Robert Khuzami, SEC director of enforcement.
Ronald Hosko, the FBI’s agent in charge of the bureau’s Washington field office criminal division, and Khuzami emphasized the complexity of the investigation, which authorities unraveled with what Breuer called “extraordinary” cooperation from Siemens.
“The company is not indicted,” said Alexander Becker, a Siemens spokesman. “We can’t comment on proceedings against individuals.”
The conspirators committed to pay $100 million in bribes to Argentine officials and actually paid more than $60 million, including more than $25 million laundered through the U.S. banking system, Breuer said. The SEC said about $31.3 million in bribes was arranged after March 12, 2001, when Siemens became subject to U.S. securities laws.
After the identity card project was terminated, the defendants tried to recover profits they would have gotten from the contract that was awarded to them illegitimately, U.S. Attorney Preet Bharara said.