The former deputy governor of Austria’s central bank and eight other defendants went on trial Monday for allegedly bribing officials in Azerbaijan and Syria to win banknote contracts.
The former vice governor, Wolfgang Duchatczek, and the others are accused of using the banknote-printing subsidiary of the central bank, the Oesterreichischen Nationalbank (OeBS), and paying bribes totalling €14 million ($19 million) to win contracts with Syria and Azerbaijan.
As alleged, the defendants agreed to overcharge foreign national banks by as much as 20 percent and transfer the money to Azerbaijani and Syrian officials from 2005 to 2011.
The defendants helped set up a mailbox company in Panama to launder money and transfer it to Azerbaijan and Syria, Prosecutor Volkert Sackmann told a Vienna court. Sackmann said the OeBS needed new business to compensate for a loss-making contract with Singapore, so it turned its attention to these “exotic countries.”
The main defendant in the case is the former head of the OeBS, Michael Wolf, and the other defendants are ex-OeBS managers and staff and two lawyers.
They have all pleaded not guilty and face up to 10 years in jail.
Duchatczek served as supervisory board chief of the OeBS, along with his deputy governor duties. He was suspended as deputy central bank governor and resigned in June after he was charged last year.
This is not the only investigation into allegations of bribery in the world of currency printing.
Australia’s Securency International Plc is at the center of a probe into alleged bribes to officials in Malaysia, Indonesia, Nepal, and Vietnam to win lucrative contracts.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.
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