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Malvern Malfeasance?

April 22, 2009
by vciotti
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The Noon "Action News" today reported Siemens' Malvern complex was raided by the Feds. Something about gathering up records related to a DoD contract. Great helicopter views of the buildings. I'll bet it's on the national news tonight, so keep an eye out.



MALVERN, Pa. - April 22, 2009 (WPVI) Federal agents converged on a medical supply company in Malvern, Chester County late this morning. The raid began shortly after employees reported for work Wednesday morning. Agents with the Defense Criminal Investigations Service rolled in with a rented box truck. They swarmed into the building with a search warrant and went to work.

Nervous employees stood outside as the agents combed through files and computer records. About six hours later, they emerged with box loads of evidence.

They loaded it all onto the box truck and then left. DCIS confirms they were looking for records in connection with a specific military contract.

Seimens says it has hundreds and hundreds of contracts with the military, but could not confirm which one is at issue.

Seimens is a multinational corporation based in Germany with satellites around the world. About 4,000 people work at the Great Valley complex. They specialize in computer record systems and high tech medical devices.

The Pentagon says it will not identify the contract in question, but does confirm that Siemens does business with all branches of the military. The building that was searched houses the executive offices among others at the U.S. headquarters for Seimens.

From a local paper:

Siemens M edical Solutions confirmed Wednesday it was served with a search warrant relating to a government contract.

The warrant was executed by the Defense Criminal Investigations Service, said special agent-in-charge Ed Bradley, located at the agency's Lester, Delaware County, office. Bradley on Wednesday afternoon said he could not answer questions about the number of agents involved in the raid or how long agents would be on the scene.

Investigators "will be there as long as it takes," Bradley said.

The Defense Criminal Investigations Service is the criminal investigation arm of the Department of Defense Office of the Inspector General. The service operates with 350 special agents.

Lance Longwell, Siemens spokesman, said the agency conducted a "limited search of Siemens Medical Solutions USA Malvern facility. The search was in connection with an investigation of a Siemens contract with the Department of Defense."

Longwell said the search was focused on one floor of one building on Siemens' Malvern campus.

Siemens asked employees who work near the area subject to the search to leave for the remainder of the day and to return today for a regular workday, he said.

In a separate statement the company that makes medical imaging and lab diagnostics equipment such as MRIs and CT scans said it "has and will continue to cooperate fully with the government's investigation."

Earlier this month Siemens won a contract for radiology systems and components on behalf of the U.S. military and federal civilian agencies worth up to $267 million.

The investigation at the company's U.S. headquarters comes on the heels of a $1 billion-plus settlement by Siemens' parent company, Siemens AG, in a series of corruption cases.

In December, Munich-based Siemens AG agreed to pay more than $800 million in fines to settle long-standing corruption charges in the United States and another $533.6 million to European authorities.

Siemens, Germany's biggest engineering company, had been embroiled in a far-reaching corruption scandal and has acknowledged making dubious payments to secure business. An investigation commissioned by Siemens found evidence of violations across the company, and in several countries.

Under the settlement terms in the U.S., Siemens and three of its international subsidiaries agreed to pay approximately $450 million to the U.S. Justice Department to settle charges of making bribes and trying to falsify corporate books from 2001 to 2007. It will pay another $350 million to settle charges from the U.S. Securities and Exchange Commission.

U.S. prosecutors described schemes during which Siemens executives bribed foreign officials with suitcases stuffed with money and created vast slush funds to win government contracts.

As part of the plea deal, Siemens can still be considered a "responsible contractor," and can still bid for government contracts.