Former Compliance Officer Accuses Siemens of Undermining 2008 Anti-Bribery Agreement
By Douglas Gillison and Jeffrey Benzing | January 15, 2013 5:11 pm

A former compliance officer of Siemens AG in China filed a lawsuit this week in the Southern District of New York accusing the German engineering giant of deliberately undermining an internal anti-corruption program created as part of record 2008 foreign bribery settlement, according to media reports.

The news came as the company’s Chief Financial Officer, Joe Kaeser, gave an interview to The Wall Street Journal touting the efficiency of the company’s anti-corruption program created as a result of the 2008 settlement. The new suit was the second in as many months to be filed in the Southern District of New York accusing Siemens of corruption.

The Justice Department said in December that Siemens had fulfilled its obligations under an outside monitorship imposed as part of the 2008 settlement. Siemens paid a record $1.6 billion in 2008 to German and American authorities to resolve allegations of systematic bribery in countries including Venezuela, Bangladesh, China and Argentina.

Camille Johnston, vice president for corporate affairs at Siemens Corp., said she could not comment on pending litigation.

In a different action taken in December by Petróleos Mexicanos, the state-owned Mexican oil company sought damages allegedly suffered as a result of a bribery scheme. That lawsuit was stayed at the request of the plaintiff late last month.

A man identified as Meng-Lin Liu, a former compliance officer in China, said in the lawsuit filed Tuesday that he had uncovered a kickback scheme involving inflated prices for medical equipment which handpicked middlemen sold on to public hospitals, according to Reuters. The story was also reported by Bloomberg, which said a company spokesman declined to comment.

Liu, who said he joined the company in 2008, claimed in the complaint to have uncovered “incontrovertible evidence” and also made allegations concerning Siemens’s dealings in North Korea, according to Reuters, which did not elaborate.

“The internal control evasions uncovered by Liu involved intentional conduct which had no possible innocent explanation,” Liu’s complaint says, according to Bloomberg.

Liu alleged that public hospitals bought nuclear magnetic resonance imaging machinery and tomography scanners but paid markups of 20 to 130 percent, which he concluded constituted bribes that were sent to procurement agents, Bloomberg reported. Liu also alleged that he was put on leave a week after bringing the suspect transactions to the health-care CFO and that his contract was not renewed three months later.

Liu claims that senior executives in China and at the parent company were aware of the scheme.

Liu is seeking unspecified damages.

The case is Liu v. Siemens AG, 13-CV-317 in the U.S. District Court for the Southern District of New York.

This story has been updated.

Previous coverage by Just Anti-Corruption:

Pemex Seeks to Stay Recent Siemens Bribery Lawsuit
Monday, December 31, 2012
DOJ Says Siemens Has Fulfilled Monitorship Obligation
Friday, December 21, 2012
Siemens’ Truppel Fights Extradition in Argentine Court
Friday, December 21, 2012

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