Preet Bharara, the United States Attorney for the Southern District of New York, announced that ANDRES TRUPPEL, former chief financial officer for Siemens Argentina, pled guilty today in Manhattan federal court to conspiring to pay $100 million in bribes to senior Argentine government officials to secure, implement, and enforce a $1 billion contract between Siemens and the Argentine government to produce national identity cards. He is the first individual defendant to plead guilty in the massive scheme. TRUPPEL, a citizen of Argentina and Germany, pled guilty 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, before U.S. District Judge Denise L. Cote.
Manhattan U.S. Attorney Preet Bharara stated: “Andres Truppel has admitted to playing a significant role in the massive Siemens bribery conspiracy that spanned over a decade. To reap the benefits of a billion dollar contract with the Argentinian government, Truppel and his co-conspirators funneled close to $100 million in bribes to government officials, including wiring more than $7 million in bribe money to a bank account in New York, and filed a fraudulent arbitration claim in the United States that included a false witness statement from Truppel. This conduct violated U.S. anti-bribery and fraud laws, and Truppel is the first individual in this criminal scheme to admit his guilt.”
According to the Indictment and statements made at today’s plea hearing:
ANDRES TRUPPEL was employed by Siemens Aktiengeselleschaft (“Siemens AG”) from 1977 until 2004.From approximately 1996 to 2002, TRUPPEL was the chief financial officer for Siemens Argentina, a subsidiary of Siemens AG.
In 1994, the government of Argentina issued a tender for bids to replace an existing system of manually created national identity booklets with state-of-the-art national identity cards (the DNI project). The value of the DNI project was $1 billion. In 1998, the Argentine government awarded the DNI project to a special-purpose subsidiary of Siemens AG.
In connection with this project, TRUPPEL and his co-conspirators caused Siemens to commit to paying nearly $100 million in bribes to sitting officials of the Argentine government, members of the opposition party, and candidates for office who were likely to come to power during the performance of the project. Members of the conspiracy worked to conceal the illicit payments through various means. For instance, they wired more than $7 million in bribes to a bank account in New York disguised as a foreign exchange hedging contract related to the DNI project.
In May 1999, the Argentine government suspended the DNI project, due in part to instability of the local economy and an impending presidential election. When a new government took power in Argentina, and in the hopes of getting the DNI project resumed, members of the conspiracy committed Siemens to paying additional bribes to the incoming officials, and to satisfying existing obligations to officials of the outgoing administration, many of whom remained in influential positions within the government. When the project was terminated in May 2001, members of the conspiracy nevertheless sought to recover the anticipated proceeds of the DNI project by causing Siemens AG to file a fraudulent arbitration claim against the Republic of Argentina in Washington, D.C. The claim alleged wrongful termination of the contract for the DNI project and demanded nearly $500 million in lost profits and expenses. Members of the conspiracy hid from the tribunal the fact that the contract for the DNI project had been secured by means of bribery and corruption by filing a claim and supporting evidence, including a witness statement from TRUPPEL, which contained material misrepresentations and omissions.
Members of the conspiracy also continued the bribe scheme, in part to prevent disclosure of the bribery in the arbitration but also to ensure Siemens’ ability to secure future government contracts in Argentina and elsewhere in the region. In four installments between 2002 and 2007, members of the conspiracy allegedly caused Siemens to pay approximately $28 million in further satisfaction of the obligations. Conspirators continued to conceal these additional payments through various means. For example, TRUPPEL and other members of the conspiracy caused Siemens to transfer approximately $9.5 million through fictitious transactions involving a Siemens business division that had no role in the DNI project. They also caused Siemens to pay an additional $8.8 million in 2007 to settle an arbitration that was brought to enforce a sham consulting contract.Siemens’s corrupt procurement of the DNI project was not exposed during the lifespan of the conspiracy, and, in February 2007, the arbitration tribunal in Washington sided with Siemens AG, awarding the company nearly $220 million on its DNI claims, plus interest. The company, however, never claimed the award money, because after Siemens reached corporate resolutions with the U.S. and German authorities, Siemens AG agreed to forego its right to receive the award.
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TRUPPEL, 60, of Buenos Aires, Argentina, faces a maximum sentence of five years in prison and three years of supervised release. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Charges against the other individuals named in the indictment – Uriel Sharef, Herbert Steffen, Ulrich Bock, Eberhard Reichert, Stephan Signer, Carlos Sergi, and Miguel Czysch – are pending. The charges and allegations against the other individuals named in the Indictment are merely accusations, and these defendants are presumed innocent unless and until proven guilty.
On December 15, 2008, Siemens AG and Siemens Argentina entered guilty pleas to criminal violations of the FCPA. As part of the plea agreement, Siemens AG and Siemens Argentina agreed to pay fines of $448.5 million and $500,000, respectively.
Mr. Bharara praised the Federal Bureau of Investigation’s New York and Washington D.C. Field Offices for their work on the case. He also thanked the Department of Homeland Security for its assistance.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Niketh Velamoor and Assistant Chief Tarek J. Helou of the Criminal Division’s Fraud Section are in charge of the prosecution.