Probe opened in Russia over state purchases of Mercedes-Benz cars

Article by Christian Andrei, on November 15, 2010

To determine if fraud was committed, Russian investigators have opened a criminal probe into the state agencies’ purchase of Mercedes- Benz cars. According to the Investigative Committee of the Prosecutor General's Office, its preliminary investigation found that there were grounds to suspect fraud. It also found that in awarding contracts, there was a breach of trust.

A committee official clarified that the fraud allegation stems from these government officials who are involved in the contracts, being unauthorized to arrange such transactions.

Last March, Daimler AG, the owner of the Mercedes brand, had agreed to pay $185 million to resolve US criminal charges resulting from giving bribes to Russian officials and at least 21 other countries to gain contracts.

Ute Wueest von Vellberg, a spokeswoman for Daimler, said last Friday that the company will “cooperate fully” with the authorities. She also said that the company has reinforced its internal controls and has “learned a lot from these incidents in the past.”

As part of the original settlement, two Daimler subsidiaries (DaimlerChrysler Automotive Russia and Daimler Export and Trade Finance GmbH) had pleaded guilty on April 1 in US District Court in Washington to violations of the Foreign Corrupt Practices Act.

The settlement deal had noted that Daimler officials made hundreds of improper payments to sell hundreds of millions of dollars worth of vehicles. [via autonews - sub. required]

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