According to DoJ, “Eight former executives and agents of Siemens AG and its subsidiaries have been charged for allegedly engaging in a decade-long scheme to bribe senior Argentine government officials to secure, implement and enforce a $1 billion contract with the Argentine government to produce national identity cards.”  In a joint statement issued today,  Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara for the Southern District of New York and Ronald T. Hosko, Special Agent in Charge of the FBI, Washington Field Office’s Criminal Division, announced the grand jury indictments of the following individuals on various counts of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the wire fraud statute, money laundering conspiracy and wire fraud:

Uriel Sharef, a former member of the central executive committee of Siemens AG;

• Herbert Steffen, a former chief executive officer of Siemens Argentina;
• Andres Truppel, a former chief financial officer of Siemens Argentina;
• Ulrich Bock, Stephan Signer and Eberhard Reichert, former senior executives of Siemens Business Services (SBS); and
• Carlos Sergi and Miguel Czysch, who served as intermediaries and agents of Siemens in the bribe scheme.

“Today’s indictment alleges a shocking level of deception and corruption,” said Assistant Attorney General Breuer.   “The indictment charges Siemens executives, along with agents and conduits for the company, with committing to pay more than $100 million in bribes to high-level Argentine officials to win a $1 billion contract.” According to the indictment:

the government of Argentina issued a tender for bids in 1994 to replace an existing system of manually created national identity booklets with state of the art national identity cards (the DNI project).  The value of the DNI project was $1 billion.  In 1998, the Argentine government awarded the DNI project to a special-purpose subsidiary of Siemens AG.

“As alleged, the defendants in this case bribed Argentine government officials in two successive administrations and paid off countless others in a successful effort to secure a billion dollar contract,” said U.S. Attorney Bharara.  “When the project was terminated, they even sought to recover the profits they would have reaped from a contract that was awarded to them illegitimately in the first place.”  The indictment also alleges that”the defendants and their co-conspirators caused Siemens to commit to paying nearly $100 million in bribes to sitting officials of the Argentine government, members of the opposition party and candidates for office who were likely to come to power during the performance of the project.”

According to the indictment, “members of the conspiracy worked to conceal the illicit payments through various means:

For instance, Bock made cash withdrawals from Siemens AG general-purpose accounts in Germany totaling approximately $10 million, transported the cash across the border into Switzerland and deposited the funds into Swiss bank accounts for transfer to officials.  Bock, Truppel, Reichert and other conspirators also allegedly caused Siemens to wire transfer more than $7 million in bribes to a bank account in New York disguised as a foreign exchange hedging contract relating to the DNI project.  Over the duration of the conspiracy, the conspirators allegedly relied on at least 17 off-shore shell companies associated with Sergi, Czysch and other intermediaries to disguise and launder the funds, often documenting the payments through fake consulting contracts.

To report Foreign Corrupt Practices Act violations or other securities fraud, contact Frohsin & Barger.