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Siemens to pay fines in criminal probe

The company settles corruption charges in the U.S. and Germany for $1.34 billion.

December 16, 2008|Josh Meyer | Meyer is a Times staff writer.

The FBI deployed agents from a Washington squad specially trained in foreign corruption cases to work with German authorities, said Joseph Persichini Jr., an assistant FBI director. He said agents found a "massive, willful and carefully orchestrated criminal corruption scheme."

"Their actions were not an anomaly," Persichini said. "They were standard operating procedures for corporate executives who viewed bribery as a business strategy."

Asked why, despite such strong statements, the government had not charged Siemens with bribery or gone after its corporate executives, Friedrich said the company had cooperated fully in the investigation, engaged in significant reforms and hired a former German finance minister as an independent compliance monitor for the next four years.

"In this case, one weighed all the factors," he said. "This was the right disposition. And the court agreed with our proposal."

Simeon M. Kriesberg, a lawyer at Mayer Brown, said the Siemens case was the most concrete proof to date that the Justice Department and the SEC had made enforcement of the corrupt practices law a priority, and that they were taking the necessary steps to investigate and prosecute cases jointly with their foreign counterparts.

Over the last five years, Kriesberg said, there have been more such prosecutions and enforcement actions, stiffer penalties and more targeting of individuals and companies.

"I'm sure this settlement is going to send shivers down the spines of boards of directors and senior managements of corporations around the world," Kriesberg said.


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