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Siemens To Plead Guilty

Bloomberg and the Associated Press are reporting that Siemens AG will plead guilty and pay at least $800 million in fines and disgorgement to settle global corruption charges with the U.S. Department of Justice and the Securities and Exchange Commission.

A hearing in U.S. District Court in Washington in front of Judge Richard J. Leon on whether to accept the settlement is scheduled for Dec. 15, according to Sheldon Snook, a court spokesman.

Prosecutors are recommending a fine of $450 million for the company and subsidiaries in Venezuela, Argentina and Bangladesh for violations of the Foreign Corrupt Practices Act and the U.N. oil for food program. Siemens will also have to forfeit $350 million in profits and submit to monitoring to ensure compliance with anti-bribery laws, reports Bloomberg.

Siemens’ $800 million settlement payments would dwarf the previously highest FCPA penalty. In April 2007, Baker Hughes paid $44.1 million. Last month Siemens said it had reserved €1 billion for any settlement with U.S. authorities.

“The German company,” Bloomberg says, “knowingly used off-book accounts to conceal corrupt payments, mischaracterized bribes in corporate accounting and falsely described kickbacks paid to the Iraqi government in connection with the United Nations oil-for-food program, U.S. Attorney Jeffrey Taylor said in a criminal information filed today in Washington.”

Siemens had disclosed that its questionable payments around the globe amounted to at least €1.3 billion. Earlier this year, the company said it plans to sue eleven former executives, including two former chief executives, for failing to prevent the company’s corrupt practices. It also agreed last year to pay a fine in German proceedings of €201 million.

The company had hoped to settle the U.S. proceedings by late 2007. Its talks then with U.S. authorities were apparently derailed when it found that the scope of its global corruption was more extensive than originally disclosed.

View our prior posts about Siemens here.

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