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Five Israeli State Electric Company Executives Sentenced in Siemens Bribery Scandal

Posted  June 15, 2017

By the C|C Whistleblower Lawyer Team

This past May, Siemens paid $43 million to settle bribery allegations involving its business with the Israeli government. Siemens was accused of bribing executives at the Israeli state-owned power company to win contracts to manufacture power turbines. The conduct allegedly went on between 1999 and 2005, during which time Israel purchased more than $650 million worth of gas turbines from the company. As part of the settlement, Siemens was also required to appoint an external inspector to oversee the company’s future conduct in Israel.

Immediately after the settlement, six former senior executives of the Israel Electric Corporation, Israel’s state-run utility, were charged with fraud, money laundering, and breaching the public trust. Investigators believed that the six executives collectively received $16 million in bribes. The money was allegedly transferred to Swiss bank accounts or smuggled out of Israel via cash-stuff suitcases.

Now, five of those six former executives have been sentenced to jail time ranging from two to four years. They are also subject to tens of thousands of dollars of fines and hundreds of thousands of dollars of asset forfeiture. The case of the former deputy director of the utility, David Elmakis, is still pending. In its ruling, the Tel Aviv District court noted “a culture of deep corruption that permeated the electricity company at the highest levels.”

Siemens’ 2008 FCPA settlement with American authorities is still the largest settlement under the law.

Tagged in: FCPA, Money Laundering,