A former Siemens AG executive won dismissal of a U.S. regulator’s lawsuit over his alleged role in an Argentine bribery scheme to land a $1 billion contract to make national identity cards.
U.S. District Judge Shira Scheindlin in Manhattan today dismissed the case brought by the Securities and Exchange Commission against Herbert Steffen, a former chief executive officer of Siemens SA Argentina, saying the court lacks jurisdiction over him and that it’s unreasonable for Steffen to have to defend himself in an American court.
The SEC sued Steffen, 75, and six others at Europe’s largest engineering company in 2011, alleging that they had orchestrated a scheme which paid about $100 million in bribes to top Argentine government officials. A criminal case brought by Manhattan U.S. Attorney Preet Bharara is pending against Steffen.
“Steffen’s lack of geographic ties to the United States, his poor proficiency in English and the forum’s diminished interest in adjudicating the matter all weigh against personal jurisdiction,” Scheindlin said.
When the case was filed, Robert Khuzami, then the director of the SEC’s Division of Enforcement, called it the largest action his agency had brought against people accused of bribing foreign officials. The SEC alleged that Steffen helped “to facilitate the payment of bribes” to officials in Argentina through his longstanding connections there.
“We are reviewing the decision,” John Nester, a spokesman for the SEC, said in an e-mail.
Erich Schwartz, a lawyer for Steffen, said he was “gratified with this result.”
“The court’s decision makes clear how remote Mr. Steffen’s alleged conduct was from the United States,” Schwartz said in a telephone interview. “We are also pleased that the court recognized the unreasonableness, given the circumstances, of compelling him to defend himself in the United States.”
Steffen was one of eight people charged by Bharara’s office with conspiracy to violate the Foreign Corrupt Practices Act and the wire-fraud statute, money laundering conspiracy and wire fraud. The criminal case is still pending.
The defendants in the criminal case are Uriel Sharef, a former member of the managing board of Munich-based Siemens; Steffen, Andres Truppel, Ulrich Bock, Eberhard Reichert, Stephan Signer, Carlos Sergi and Miguel Czysch.
A ninth executive, Bernd Regendantz, was named in a related complaint filed by the SEC and not charged with a crime. Czysch and Reichert, who were charged criminally, weren’t named as defendants in the SEC complaint.
The SEC claims that executives of Siemens and its Argentine unit bribed officials in Argentina from 1996 to 2007.
None of those sued by the SEC or charged by Bharara’s office are in U.S. custody. When the charges were announced in December 2011, Assistant Attorney General Lanny Breuer declined to say whether the defendants would be extradited to the U.S.
In a letter to Scheindlin in August, the SEC said that Steffen, Bock and Signer are German nationals living in Germany while Sergi and Truppel are Argentine nationals living in that country. A final judgment of $40,000 in favor of the SEC was entered against Regendantz on Dec. 13, 2011, court records show.
Siemens pleaded guilty in 2008 to violating U.S. anti-corruption laws and agreed to pay $1.6 billion to settle bribery probes in the U.S. and Germany.
The criminal case is U.S. v. Sharef, 11-01056, U.S. District Court, Southern District of New York (Manhattan). The civil case is U.S. Securities and Exchange Commission v. Sharef, 11-cv-9073, U.S. District Court, Southern District of New York (Manhattan).