A former employee is suing Siemens ($SI), alleging that the German conglomerate fired him after he brought evidence of kickbacks to light regarding medical device and equipment sales in China and North Korea.
A Siemens spokesperson declined comment on the allegations involved.
"Kickbacks" is becoming an embarrassing word for Siemens, which was forced to pay $1.6 billion by U.S. and German investigators to settle investigations into "an international bribery scheme" in 2008. Back in May, the company disclosed in its 2012 second-quarter earnings report that the Munich public prosecutor was investigating alleged payments made by a Siemens subsidiary to "a Russian company." The U.S. Attorney's Office for the Eastern District of New York is also investigating Siemens over "a diagnostics process"--something Siemens disclosed midyear without offering further details. Siemens' healthcare division focuses on diagnostics, imaging, audiology devices and therapy systems.
In this latest case, the controversy is more about a person who claims to have exposed kickbacks rather than the kickbacks themselves. As Bloomberg reports, Meng-Lin Liu is the former employee who filed a whistle-blower complaint in Manhattan federal court. Liu, a former compliance officer for the company's China division, alleges that the company fired him after he brought to managers' attention a system whereby the China division came up with a bit of a shell game involving sales of medical diagnostic and scanning equipment to Chinese and North Korean public hospitals.
The alleged China plan involved submitting inflated bids but then selling the products much cheaper to third parties. Those intermediaries, the suit alleges, then sold the products to the hospital clients at the full bid price--20% to 130% higher than what they paid to Siemens. Liu alleged that Siemens used the extra money to bribe hospital officials involved in purchasing. He claims in his lawsuit that Siemens put him on leave after he detailed his discovery and was then fired within a few months, according to the story.
- read the Bloomberg story
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