Ex-Siemens official pleads guilty to US$100m bribery scheme

The headquarters of Siemens in Munich, Germany.

NEW YORK (BLOOMBERG) - An elderly former Siemens executive who evaded authorities for six years pleaded guilty in the US to conspiring to pay US$100 million in bribes to Argentine officials.

Eberhard Reichert, a German national who worked at Europe's largest engineering company for almost four decades, told US District Judge Denise Cote in Manhattan on Thursday (March 15) that for years he signed off on false invoices from a sham consulting firm to free up cash for the bribes.

The payments were part of a decade-long scheme to land a US$1 billion contract to produce Argentina's state-of-the-art national identity cards. Siemens won the contract in 1998.

"I knew that this conduct was wrong and not legal," Reichert, 78, said through an interpreter at his plea hearing. "It was the greatest mistake of my life and I regret it deeply."

Reichert was arrested in Croatia in September and extradited to the US, said Dawn Dearden, a spokeswoman for the US Attorney in Manhattan. Cote will allow him to remain free on bail and travel to Germany until a sentencing hearing in October.

The single count to which Reichert pleaded includes conspiracy to commit bribery, falsify corporate books and records, circumvent internal controls and commit fraud. He's the second former Siemens official to plead guilty in the six-year-old case.

Reichert led a division of the company's business services unit in Munich, court records show. He was charged in 2011 with seven other former executives or intermediaries with taking part in a decade-long effort to pay more than US$100 million in bribes to an array of government officials and opposition politicians.

Siemens pleaded guilty in 2008 to criminal violations of US anti-corruption laws and agreed to pay US$1.6 billion to resolve bribery probes in the US and Germany.

Andres Truppel, the former chief financial officer of the Siemens unit, pleaded guilty in 2015 in the same case and agreed to testify against others. Truppel said he took part in the scheme from 1996 to 2006, and that recipients of the payoffs included a former Ministry of Justice official.

Truppel, at his plea hearing, said the group disguised bribes with phony invoices and fake consulting agreements. One payment was falsely recorded as a foreign-exchange hedge contract, he said. Truppel also admitted providing a false witness statement that was used to support a fraudulent arbitration claim by Siemens against Argentina.

In addition to Reichert and Truppel, the ex-Siemens executives charged are Uriel Sharef, Herbert Steffen, Ulrich Bock, Stephan Signer, Carlos Sergi and Miguel Czysch. The defendants all live outside the US.

According to the US, after the contract was canceled due to a change in the Argentine government, the defendants again bribed high-ranking government officials to get it reinstated. When Siemens then sought to enforce the contract against Argentina through an arbitration in Washington, the executives paid more bribes to ensure the Argentine officials wouldn't testify about the corruption, the U.S. said.

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