U.S. v. DaimlerChrysler China Ltd., No. 10-cr-66 (D.D.C. 2010)
Daimler AG; DaimlerChrylser Automotive Russia SAO; Daimler Export and Trade Finance GmbH
2000; 2001; 2002; 2003; 2004; 2005
Officials of three Chinese state-owned energy companies: Sinopec; the Bureau of Geophysical Prospecting, a division of the Chinese National Petroleum Corporation; and Changqing Petroleum Exploration Bureau, an oil and natural gas extraction company.
Employees of DaimlerChrysler China Ltd. (“DCCL”) and Daimler AG ("Daimler") made improper payments in the form of supposed commissions, delegation travel, and gifts for the benefit of Chinese government officials in connection with the sale of vehicles to Chinese government customers, including principally Sinopec and the Bureau of Geophysical Prospecting, a division of the Chinese National Petroleum Corporation.
DCCL and Daimler inflated the sales price of vehicles sold and then maintained a special account to track these overpayments and disburse them to and for the benefit of Chinese officials.
Daimler and DCCL also made payments to shell entities, at times under sham consulting contracts, and to third-party agents. These entities and agents passed these payments on to Chinese officials. DCCL also provided lavish gifts, travel, and entertainment to Chinese officials.
On March 22, 2010, Daimler and DCCL entered into deferred prosecution agreements with the DOJ. Daimler admitted to violating the books and records provisions of the FCPA and conspiracy to violate the books and records provisions of the FCPA. DCCL admitted to violating the anti-bribery provisions of the FCPA and conspiracy to violate the anti-bribery provisions of the FCPA. On the same day, Daimler’s Russian subsidiary, DCAR, and Daimler’s finance subsidiary, DETF, each pleaded guilty to violating the anti-bribery provisions of the FCPA and conspiracy to violate the anti-bribery provisions of the FCPA.
Under the terms of its agreement with the DOJ, Daimler must hire an independent monitor for three years to oversee the implementation of a robust compliance program. If Daimler complies fully with its agreement for a period of two years and seven days, the DOJ agrees not to bring any other charges based on this underlying conduct or other conduct that Daimler disclosed to the DOJ.