United States v. Daimler AG (D.D.C. 2010)
United States v. Daimler Export and Trade Finance GmbH (D.D.C. 2010)
United States v. DaimlerChrysler Automotive Russia SAO (D.D.C. 2010)
United States v. DaimlerChrysler China Ltd. (D.D.C. 2010)

• Case Name
• United States v. Daimler AG (D.D.C. 2010)
  United States v. Daimler Export and Trade Finance GmbH (D.D.C. 2010)
  United States v. DaimlerChrysler Automotive Russia SAO (D.D.C. 2010)
  United States v. DaimlerChrysler China Ltd. (D.D.C. 2010)

• Date Filed
• 03/22/2010

• Enforcement Agency
• DOJ

• Countries
• China, Ivory Coast, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Latvia, Nigeria, Russia, Serbia, Thailand, Turkey, Turkmenistan, Uzbekistan, Vietnam

• Foreign Official
• Various officials involved in the purchase of vehicles around the world.

• Date of Conduct
• 1999 to 2008

• Nature of Business
• Securing numerous contracts with government customers for the purchase of Daimler vehicles.  Daimler is a German vehicle manufacturing company with business operations throughout the world.

• Influence to be Obtained
• Between 1998 and 2008, Daimler AG (“Daimler”) and its subsidiaries made hundreds of improper payments worth tens of millions of dollars to foreign officials to obtain vehicle contracts in at least 22 countries.  The alleged improper payments include: 
  
  -“Third-party accounts,” maintained as receivable ledger accounts on Daimler’s books but controlled by third parties outside the company or by Daimler subsidiaries.  Prior to 2002, these accounts enabled cash disbursements from a “cash desk” located at a Daimler facility in Stuttgart, Germany.  Daimler employees took the cash and transported it to other countries to pay bribes to foreign officials.  Daimler used these accounts to make improper payments by other methods too.
  
  -Daimler subsidiary DaimlerChrysler Automotive Russia SAO (“DCAR”) made payments to Russian government officials by over-invoicing the customer and then paying the excess amount back to the government officials.  Daimler and DCAR also made payments to third parties in connection with the sale of commercial vehicles to Russian government customers with the understanding that the payments would be passed on to Russian government officials.
  
  -Employees of DaimlerChrysler China Ltd. (“DCCL”) and Daimler made improper payments in the form of commissions, delegation travel, and gifts for the benefit of Chinese government officials in connection with the sale of vehicles to Chinese government customers.  Daimler and DCCL inflated the sales price of vehicles sold to Chinese government customers, 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 third party agents who passed the payments on to Chinese officials or used them to buy the officials gifts or trips.
  
  -Daimler Export and Trade Finance GmbH (“DETF”) paid bribes to Croatian government officials, both directly and via U.S.-based shell companies, to secure the sale of fire trucks to the Croatian government.
  
  -Daimler paid kickbacks to the former Iraqi government to obtain contracts for the sale of vehicles to the government of Iraq under the oil-for-food program.  Like other companies that have been prosecuted in oil-for-food cases, Daimler agreed to pay a 10% commission to the Iraqi government by inflating contract prices by 10%.  The payments were characterized as “after sales services fees,” but no services were performed.  Most of Daimler’s oil-for-food contracts involved third-party intermediaries, but Daimler understood its partners would pay the illegal kickbacks to Iraqi ministries.
   

• Enforcement
• On March 22, 2010, Daimler and its Chinese subsidiary, 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.
   
  Daimler and its subsidiaries must pay a $93.6 million fine to the DOJ.  Separately, to settle civil charges brought by the SEC, Daimler agreed to pay $91.4 million in disgorgement.
   

• Amount of the Value
• Tens of millions.

• Amount of Business Related to Payment
• Over $50 million.

• Intermediary
• Various.

• Total Sanction
• $ 93,600,000

• Compliance Monitor
• Yes

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 185,000,000

• Related Enforcement Actions
• SEC v. Daimler AG (D.D.C. 2010)
  

Daimler AG 

• Citation
• United States v. Daimler AG, No. 10-cr-63 (D.D.C. 2010); 

• Date Filed
• 03/22/2010

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Conspiracy: Books-and-Records

• Other Statutory Provision
• None

• Disposition
• Plea Agreement

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• Germany

Daimler Export and Trade Finance GmbH

• Citation
• United States v. Daimler Export & Trade Finance GmbH, No. 10-cr-65 (D.D.C. 2010);

• Date Filed
• 03/22/2010

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Conspiracy: Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Plea Agreement

• Defendant Jurisdictional Basis
• Territorial Jurisdiction, Conspiracy

• Defendant's Citizenship
• Germany

DaimlerChrysler Automotive Russia SAO 

• Citation
• United States. v. DaimlerChrysler Automotive Russia SAO, No. 10-cr-54 (D.D.C. 2010); 

• Date Filed
• 03/22/2010

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Conspiracy: Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Plea Agreement

• Defendant Jurisdictional Basis
• Territorial Jurisdiction, Conspiracy

• Defendant's Citizenship
• Russia

DaimlerChrysler China Ltd.

• Citation
• United States v. DaimlerChrysler China Ltd., No. 10-cr-66 (D.D.C. 2010).

• Date Filed
• 03/22/2010

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Conspiracy: Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Deferred Prosecution Agreement

• Defendant Jurisdictional Basis
• Territorial Jurisdiction, Conspiracy

• Defendant's Citizenship
• China