Slush funds: Conclusion of the Swiss Siemens complex of proceedings
Bern, 12.11.2013 - The Office of the Attorney General of Switzerland (OAG) has closed the Siemens case concerning the telecommunications sector. The focus of this complex of proceedings was the setting up and operation of "slush funds" at banks in Switzerland. The investigations into former employees of Siemens and fiduciaries working in Switzerland were concluded following the payment of reparation in the form of donations to charitable institutions or by issuing a summary penalty order. At the same time, criminal assets valued at 60 million Swiss francs were forfeited.
The investigation complex relating to Siemens comprised several individual proceedings. The common denominator was a suspicion of money laundering (Art. 305bis Sec. 2 of the Swiss Criminal Code, SCC) in connection with a system of slush funds fed with monies from Siemens AG Germany via various intermediary companies and account structures. An additional aspect of the Swiss investigation was the unlawful use of these funds for making acquisitions and opening up new markets for Siemens in the telecommunications sector.
The OAG's criminal investigation began in August 2005 following a report filed by the Money Laundering Reporting Office (MROS), initially relating to P.M., a Greek national and senior executive in the telecommunications division of Siemens-Hellas. Over the course of time, the investigation was extended to include other persons; in particular in May 2006, R.S. was included, an ex-Siemens manager who has since been convicted of offences in Germany.
From an early stage, the OAG worked closely with foreign prosecution authorities, in particular those of the Principality of Liechtenstein and Germany. The first findings from the Swiss investigation, conducted in close cooperation with the Swiss Federal Criminal Police, were passed on to the German prosecution authorities as early as mid-October 2006 (spontaneous transmission of evidence and information under Art. 67a of the Federal Act on International Mutual Assistance in Criminal Matters; IMAC). Also involved in the investigation were the United States Department of Justice, DOJ, and the United States Securities and Exchange Commission, SEC.
While in Germany the diverting of corporate group funds into slush funds led to convictions (judgment of the Regional Court (Landgericht) in Munich dated 28 July 2008), the Swiss investigations were each dealt with differently. In most cases, they were completed by applying Art. 53 SCC (Reparation), closed following the convictions in the main proceedings in Germany, or concluded by issuing a summary penalty order.
Individual outcomes of cases:
- One Swiss fiduciary was sentenced by summary penalty order to a suspended monetary penalty of CHF 212,400 for aggravated money laundering and forgery of documents. The criminal funds were forfeited.
- Five cases - including that against the Greek suspect P.M. - were concluded following payment of reparation under Art. 53 SCC. At the same time the criminal funds were forfeited.
- One case against the ex-Siemens manager R.S. was closed in view of the sentence imposed on him in Germany. The criminal funds were however forfeited.
- One independent forfeiture of seized assets (the residual amount in a slush fund).
- One case was closed in relation to a company due to procedural difficulties (liquidation of the company and its deletion from the Commercial Register), subject to forfeiture of the liquidation proceeds.
Around € 630,000 was paid as reparation under Art. 53 SCC in the form of donations to the charitable institution Transparency International Switzerland, to the Geneva Foundation La maison de Tara and to the SOS Children's Village in Munich.
In addition, the OAG ordered the forfeiture of the assets lying in slush funds. 60 million Swiss francs was forfeited.
Address for enquiries
Jeannette Balmer, Spokeswoman OAG, +41 31 324 32 40, email@example.com
Office of the Attorney General of Switzerland