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Daimler's Russian Subsidiary Pleads Guilty to Bribery

State-owned Mercedes with blue lights parked outside the Kremlin. Daimler admitted to bribing Russian officials. Igor Tabakov

Daimler's Russian subsidiary has agreed to plead guilty to paying bribes to Russian government officials as part of a settlement with the U.S. Justice Department, according to a settlement filed in a federal court in Washington.

The company “admits, accepts and acknowledges that it is responsible for the acts of its employees, subsidiaries and agents,” Daimler said in the 98-page agreement with prosecutors filed Wednesday.

The maker of Mercedes-Benz cars and trucks conceded, in that document, that it made hundreds of improper payments to government officials in at least 22 countries to win contracts to sell hundreds of millions of dollars worth of vehicles.

“In some cases, Daimler wired these improper payments to U.S. bank accounts or foreign bank accounts of U.S. shell corporations in order to transmit the bribe,” according to the agreement.

The company's Russian subsidiary, Mercedes-Benz Russia SAO, agreed to plead guilty to conspiring to violate the Foreign Corrupt Practices Act, or FCPA, and to violating its anti-bribery provisions.

The Justice Department lawsuit said Daimler paid more than 3 million euros ($4 million) in bribes to Russian officials between 2000 and 2005 to secure the sale of its cars to the Interior Ministry, the Federal Guard Service, the military, and the cities of Moscow and Ufa, among others.

The Interior Ministry said Thursday that U.S. investigators had not asked for assistance in the bribery case, Interfax reported.

Under the Daimler settlement, a German subsidiary, Daimler Export and Trade Finance, will plead guilty to the same charges as the Russian company.

Daimler itself and a Chinese subsidiary will agree to a deferred prosecution agreement to avoid guilty pleas, according to a separate plea agreement filed in Washington.

Daimler will pay a $93.6 million fine to settle the criminal probe, according to court papers. Daimler will also pay $91.4 million to the U.S. Securities and Exchange Commission, a person familiar with the litigation said.

Daimler agreed to be evaluated by an independent corporate monitor for three years, according to court papers.

Former FBI director Louis Freeh will be the independent monitor, said the person familiar with the investigation.

(Bloomberg, MT)

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