Daimler Charged with FCPA Violations

Daimler AG, the parent company of Mercedes-Benz, has been charged with violations of the Foreign Corrupt Practices Act.

The Department of Justice accuses the company of engaging in a long-standing practice of paying bribes worth tens of millions of dollars to foreign officials in over 22 countries.

There is an April 1 hearing in U.S. District Court in Washington D.C.

Daimler is accused of making “hundreds of payments” between 1998 and January 2008 to officials in 22 countries, including China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan and Vietnam.

Daimler is accused of having “interne Fremdkonten” or third party accounts with over 2000 in place at the time of the Chrysler merger in 1998. There is also mention of cash desk in Stuttgart that sounds a lot like the suitcase room at Siemens, where executives could fill up suitcases of cash to pay bribes.

In China the “819 account” was used to pay special commissions. The account number’s last three digits were “819.”

In addition to the payment of bribes, Daimler is also accused of improperly accounting for the funds in violation of the books and records provisions of the FCPA.

It looks ugly for the company.

Here is a copy of the Information Filing in US v. Daimler AG – hosted on JD Supra: