Siemens Exec Pleads Guilty in Argentine Bribery Scheme

MANHATTAN (CN) – A former Siemens executive pleaded guilty in Manhattan federal court Thursday to conspiring to pay $100 million to Argentine government officials to hook a $1 billion contract to manufacture national identity cards.

Eberhard Reichert, a 78-year-old German citizen, pleaded guilty before U.S. District Judge Denise Cote to one count of conspiring to violate the Foreign Corrupt Practices Act’s anti-bribery, internal controls and books-and-records provisions, and to commit wire fraud.

According to the plea agreement, the charge carries a maximum sentence of five years in prison and a maximum of three years of supervised release.

Reichert was one of eight Siemens employees indicted on U.S. corruption charges in 2011.

His guilty plea followed a September 2017 arrest in Croatia and subsequent voluntary extradition to the United States in December.

Reichert was represented by Lankler Siffert & Wohl counsel Abigail Rosen and partner Gabrielle Friedman.

Geoffrey Berman, U.S. Attorney for the Southern District of New York said in announcement Thursday, “Eberhard Reichert tried to sidestep laws designed to root corruption out of the government contracting process. As he admitted in Manhattan federal court today, Reichert helped to conceal tens of millions of dollars in bribes that were paid to unfairly secure a lucrative contract from the Argentine government.”

He added: “Berman further exhorted “Today’s plea should be a warning to others that our office is committed to bringing corrupt criminals to justice, no matter how long they run from the law.”

The prosecution was handled by the Federal Bureau of Investigation’s Complex Frauds and Cybercrime Unit.

Assistant U.S. Attorney Niketh Velamoor and trial attorney Michael Culhane Harper of the Criminal Division’s Fraud Section are in charge of the prosecution.

According to the indictment, the bribery scheme originated in 1994, when the government of Argentina issued a tender for bids to replace a system of manually created national identity booklets with state-of-the-art national identity cards known as the DNI project.

In order to snag the $1 billion project, Siemens committed to paying nearly $100 million in bribes to sitting officials of the Argentine government officials and future officeholders.

Reichert also admitted approving a $27 million sham contract between a Siemens entity and MFast Consulting AG, a company that was used as a vehicle to funnel money to Siemens executive Carlos Sergi for bribe payments.

Charges against Sergi are still pending.

By 2000, the project was suspended by newer Argentine officials and Siemens reportedly paid approximately $28 million between 2002 and 2007 to keep the conspiracy a secret.

Reichert was employed by Siemens from 1964 through 2001.

In 1990, he became the technical manager of the major projects division of Siemens Business Services.

In December 2008, Siemens AG and Siemens Argentina entered guilty pleas to criminal violations of the Foreign Corrupt Practices Act, and agreed to pay fines of $448.5 million and $500,000, respectively.

Representatives for Siemens did not immediately respond to requests for comment Thursday evening.

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