SEC Charges 7 Ex-Siemens Execs with Bribing Argentina Officials
The Securities and Exchange Commission has charged seven former Siemens executives with violating the Foreign Corrupt Practices Act (FCPA) for their involvement in the company’s decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards for Argentine citizens.
The SEC’s investigation was conducted by Tracy L. Price, Robert Dodge, and Denise Hansberry of the Enforcement Division’s FCPA Unit. The U.S. Department of Justice’s Fraud Section, the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Office of the Prosecutor General in Munich, assisted in the investigation.
Siemens was previously charged with FCPA violations and paid $1.6 billion to resolve the charges with the SEC, U.S. Department of Justice, and Office of the Prosecutor General in Munich.
The SEC alleges that one of the executives had left Siemens and acted as a payment intermediary in the scheme. Siemens paid more than $100 million in bribes to such high-ranking officials as two former Argentine presidents and former cabinet members. The executives falsified documents including invoices and sham consulting contracts, and participated in meetings in the United States to negotiate the terms of bribe payments. They used U.S. bank accounts to pay some of the bribes.
In a parallel criminal action, the Department of Justice filed charges against former executives and agents of Siemens. They are charged with conspiracy to violate the FCPA and the wire fraud statute, money laundering conspiracy and wire fraud.
According to the SEC’s complaint filed in U.S. District Court in Manhattan, the scheme lasted from approximately 1996 to early 2007. Initially, the bribes were paid to secure a $1 billion contract to produce national identity cards known as Documentos Nacionales de Identidad (DNI) for every Argentine citizen.
After a change in Argentine political administrations resulted in the DNI contract being suspended and then canceled, Siemens paid additional bribes in a failed effort to revive the DNI contract. When the company later instituted an arbitration proceeding to recover its costs and expected profits from the canceled contract, Siemens paid additional bribes to suppress evidence that the contract originally had been obtained through corruption.
The former Siemens and Siemens Argentina executives charged by the SEC are Uriel Sharef, Ulrich Bock, Stephan Signer, Herbert Steffen, Andres Truppel, Carlos Sergi, and Bernd Regendantz.
According to the SEC’s complaint, approximately $31.3 million of the $100 million in bribes paid were made after March 12, 2001, when Siemens became a U.S. issuer subject to U.S. securities laws. As a result of the bribe payments it made, Siemens received an arbitration award in 2007 against the government of Argentina of more than $217 million plus interest for the DNI contract. In August 2009, after settling bribery charges with the U.S. and Germany, Siemens waived the arbitration award.
Regendantz settled the SEC charges without admitting or denying the allegations by consenting to the entry of a final judgment that permanently enjoins him from committing future violations. He paid a €30,000 administrative fine ordered by the Munich prosecutor (equivalent to $40,000 in U.S. dollars).