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U.S. v. Alain Riedo

 
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Riedo, Alain
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DOJ Criminal
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October 15, 2013
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U.S. v. Alain Riedo
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U.S. v. Alain Riedo, No. 3:13-cr-3789 JM (S.D.Cal 2013)
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Maxwell Technologies previously resolved parallel DOJ and SEC FCPA enforcement actions concerning its business conduct in China by agreeing to pay approximately $14 million in 2011.

Defendant Riedo's employment by Maxwell was terminated in 2009. He is currently considered a "fugitive" and a warrant for his arrest has been issued.
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Manufacturing-Other/Multi
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China
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2002; 2003; 2004; 2005; 2006; 2007; 2008; 2009
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Chinese government officials and officials at Pinggao Group Co. Ltd, Xi-an XD High Voltage Apparatus Co., Ltd., and New Northeast Electric Shenyang HV Switchgear Co., Ltd., which are state owned and state controlled electric-utility infrastructure agencies of the Chinese government.
:
Maxwell Technologies, Inc., (“Maxwell”) is a manufacturer of energy storage and power-delivery products that is incorporated in Delaware, headquartered in San Diego, California and has manufacturing capabilities in the U.S., Switzerland and China.

Maxwell Technologies S.A (“Maxwell S.A.”) is a wholly owned subsidiary of Maxwell that manufactured and sold high-voltage/high-tension capacitors in several countries, including China. Maxwell S.A. was incorporated and headquartered in Switzerland. It is alleged that Maxwell S.A. undertook the acts in the indictment with the knowledge and authorization of Maxwell.

Alan Riedo, a citizen of Switzerland, was Maxwell S.A.’s Vice President and General Manager from 2002 to 2006. In May 2006, Riedo was named Senior Vice President and officer of Maxwell and was granted shares of Maxwell stock. From 2006 to 2009, he served as the General Manager of Maxwell S.A.

Riedo, together with others identified in the indictment as Co-Conspirator A (a U.S. Citizen and senior officer of Maxwell in the San Diego office), Co-Conspirator B (a manager in the business unit of Maxwell S.A.), and Agent 1 (a Chinese national and Maxwell S.A’s third-party agent), allegedly conspired to bribe Chinese officials at Pinggao Group Co. Ltd, Xi-an XD High Voltage Apparatus Co., Ltd., and New Northeast Electric Shenyang HV Switchgear Co., Ltd., which were state owned and state controlled electric-utility infrastructure agencies of the Chinese government.

The alleged bribes were paid in exchange for the officials’ assistance in securing contracts for the sale of Maxwell's high voltage capacitor products to state-owned manufacturers of electrical-utility infrastructure, and in obtaining and retaining business, prestige and increased compensation for Riedo, Maxwell, Maxwell S.A., and others.

According to the indictment, Riedo and others engaged Agent 1 to market and sell Maxwell’s HV/HT capacitors to Chinese consumers, including Pinggao Group, Xi-an XD and Shenyang HV. Agent 1 would ensure that the quotes procured from Maxwell S.A. contained a secret mark-up of approximately 20 percent, resulting in a higher total price to the Chinese customers for Maxwell S.A.’s equipment. Agent 1 characterized the mark-up as “extra amount”, “special arrangement,” or “consulting fee” in his invoices to Maxwell S.A., and he allegedly used the money to bribe employees at Pinggao Group, Xi-an XD and Shenyang HV.

The indictment also alleges that Riedo caused the false characterization of Maxwell S.A.’s extra amounts to be included in Maxwell’s books, records, and accounts, including Maxwell’s publicly filed financial statements and SEC filings, and hampered efforts by other Maxwell executives to learn the truth about operations and finances at Maxwell S.A.’s operations in Switzerland. Even after Maxwell terminated its sales-representative arrangement with Agent 1, Riedo attempted to re-hire Agent 1 as the company’s sales agent in China under the name of another company and against the instructions of Maxwell’s CEO.

Defendant Riedo's employment by Maxwell was terminated in 2009. He is currently considered a "fugitive" and a warrant for his arrest has been issued.
:
Aiding and abetting anti-bribery, Aiding and abetting books and records, Aiding and abetting internal controls, Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)
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Conspiracy to Solicit Bribes by Public Official
:
Not stated.
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0
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Agent of Issuer, Employee of Issuer, Officer of Issuer
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General Manager
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Foreign
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Switzerland
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Contract Procurement/Retention, Other Business Advantage
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15,000,000
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Cash, Wire/check
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Sales Agent/Consultant
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2,800,000
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China
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China, Hong Kong, Switzerland, United States
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Agent
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No
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No