update: Siemens Employee blows the whislte on the company.

The federal raid by agents from the Department of Defense (DoD) on Siemens Healthcare‘s facility in Malvern, Pa., appears to stem from a whistleblower lawsuit reagarding the company’s pricing of medical imaging equipment in contracts with the federal government.

The lawsuit was filed under the Federal False Claims Act by William A. Thomas, an executive with Siemens who also worked for a company that bought equipment from it as well as a company it acquired, according to thePhiladelphia Business Journal.

The suit accuses the healthcare division of Siemens of giving corporate customers of its medical imaging equipment bigger discounts than it gave the federal government while assuring the government that it was getting the best discounts Siemens offered, the Journal reported.

The case was initially a civil suit filed in 2004 in U.S. District Court in the Virgin Islands and has subsequently been amended. 

In early April, Siemens won a $267 million contract to supply radiology systems, subsystems and components on behalf of the U.S. Army, Navy, Air Force, Marine Corps and federal civilian agencies. 

On Wednesday, Lance Longwell, director of public relations at Siemens, acknowledged that the “search was in connection with an investigation of a Siemens contract with the Department of Defense.”

However, in regards to the unfolding specifics of the case, Longwell said that it is not Siemens policy to comment on pending litigation, according to an email response received this morning. Source

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3 thoughts on “update: Siemens Employee blows the whislte on the company.

  1. I DO NOT UNDERSTAND THE SURPRISE ABOUT SIEMENS INVOLVEMENT IN POTENTIAL CRIMINAL CHARGES IN THIS LATEST EPISODE. THEIR PAST HISTORY IS FILLED WITH BRIBERY AND CORRUPTION DATING FROM 1914 WITH THE JAPANESE GOVT, THEY HAVE BEEN FORBIDDEN FROM DOING BUSINE4SS WITH ITALY, SPAIN, AND OTHERS. THEY HAVE JUST SETTLED AN OVER A BILLION DOLLAR DEAL AS A DIRECT RESULT OF UNITED STATES FRAUD AND CORRUPTION CAUSING AT LEAST TWO CEOs TO BE RELIEVED OF THEIR JOBS. PLUS THEIR PAST HISTORY AS TO PRODUCT RELIABILITY IS QUESTIONABLE.

    • Siemens has faced a series of corruption scandals in recent months, delaying the company’s joint venture with Nokia, and prompting the arrest of one board member late last month.

      German media outlets, however, have criticized Siemens for forcing the resignation of von Pierer and Kleinfeld, neither of whom were directly connected to the alleged corruption and embezzlement.

      “The resignation of Klaus Kleinfeld is not the solution to the problem. The move is much more likely to push the huge company even deeper into chaos,” according to Handelsbatt, a German financial daily. “Without a role model or a leader, this will be a crucial test for the highly complex company.”

      03/27/2007 3:20 PM

      MUNICH, Germany — Siemens stumbles from one scandal to the other. Now Johannes Feldmayer has been arrested on charges of embezzlement. Feldmayer is member of the conglomerate’s central managing board.

      04/23/2008 15:36 Source:

      Erich Reinhardt, the CEO of the Healthcare Sector of Siemens, is going to quit as the investigation into bribery revealed some violations in the unit he is in charge of.

      CEO of Siemens Healthcare Sector to resign in eye of bribery case

      Siemens is currently investigated for serious bribery, that involve Heinz-Joachim Neubürger, former chief financial officer, Karl-Hermann Baumann, another former CFO and exchairman, and Johannes Feldmayer, a former management board member. The investigation has found questionable payments of roughly 1.3 billion EUR($1.9 billion) from 2002 to 2006 that have triggered a broad range of inquiries in Germany, the United States and many other countries.

      In May 2007 a German court convicted two former executives of paying about 6 million EUR in bribes from 1999 to 2002 to help Siemens win natural gas turbine supply contracts with Enel, an Italian energy company. The contracts were valued at about 450 million EUR. Siemens was fined 38 million EUR.

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