On December 13, 2011, the Securities and Exchange Commission (“SEC”) charged seven former senior executives of Siemens AG (“Siemens”) and its regional company in Argentina (“Siemens Argentina”) with civil violations of the anti-bribery, books and records, and internal control provisions of the FCPA. In a parallel action, the Department of Justice (“DOJ”) indicted eight former senior executives and agents of Siemens for criminal conspiracy to violate the FCPA, launder money, and commit wire fraud. The SEC and DOJ filed their actions in the U.S. District Court for the Southern District of New York. Three years ago, in December 2008, the SEC and DOJ charged Siemens with FCPA violations in Argentina and numerous other countries. Siemens settled charges from the SEC, DOJ, and the Office of the Prosecutor General in Munich, Germany for $1.6 billion, the largest FCPA settlement to date.
In its recent action, the SEC alleges that the executives engaged in a decade-long scheme (from approximately 1996 until early 2007) to bribe government officials in Argentina, including two Presidents and Cabinet Ministers in two Presidential administrations, to retain a $1 billion contract to produce national identity cards for Argentine citizens. The SEC alleges that the senior executives were responsible for authorizing, negotiating, facilitating, or concealing over $100 million in bribes. The SEC alleges that, in furtherance of the scheme, they falsified documents, participated in meetings in the United States to negotiate the terms of the bribe payments, and made use of U.S. bank accounts to pay the bribes. Siemens employed a group of consultants to serve as payment intermediaries. The SEC’s complaint seeks permanent injunctive relief, disgorgement and civil penalties from the defendants.
In connection with the same scheme, the DOJ’s indictment charged the defendants with conspiracy to violate the anti-bribery, books and records, and internal control provisions of the FCPA; conspiracy to commit money laundering; and substantive wire fraud. The most senior defendant charged was Uriel Sharef, a former Siemens board member. This is the first time the DOJ has charged a board member of a Fortune 500 company with FCPA violations.