u.s. v. daimlerchrysler china - information

8/9/2019 U.S. v. DaimlerChrysler China - Information

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UNITED STATES DISTRICT COURTDISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, Criminal No.Plaintiff, Count One:18 U.S.C. 371

Count Two:15 U.S.C. 78dd-3 and18 U.S.C. 2

v.DAIMLERCHRYSLER CHINA LTD.,

Defendant.

INFORMATION1. The United States Department of Justice, Criminal Division, Fraud Section, charges

that, at all times material to this Information (unless specified otherwise):GENERAL ALLEGATIONS

2. The Foreign Corrpt Practices Act of 1977 (hereinafter, the "FCPA"), as amended,

15 U.S.C. 78dd-l, et seq., prohibited certain classes of persons and entities from makigpayments to foreign goverment offcials to obtain or retain business or secure an improperadvantage. Title iS, United States Code, Section 78dd-3, specifically prohibited any person other

than an issuer or domestic concern while in the terrtory of the United States, from corrptly makinguse of the mails or any means or instrumentality of interstate commerce in fuerance of an offer,promise, authorization, or payment of money or anything of value to a foreign offcial for thepurpose of ohtaining or retaiing business for or with, or directing business to, any person orsecurng any improper advantage in order to assist in obtaining or retaining business for or with, ordirecting business to, any person.

3. Daimler AG, formerly DaimlerChrysler AG and Daimler Benz AG (collectively

Case 1:10-cr-00066-RJL Document 1 Filed 03/22/10 Page 1 of 12

UNITED STATES DISTRICT COURTDISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,Plaintiff,v.

DAIMLERCHRYSLER CHINA LTD.,Defendant.

INFORMATION

Criminal No._____Count One:18 U.S.C. 371Count Two:15 U.S.C. 78dd-3 and18 U.S.C. 2

I. The United States Department ofJustice, Criminal Division, Fraud Section, chargesthat, at all times material to this Information (unless specified otherwise):

GENERAL ALLEGATIONS2. The Foreign Corrupt Practices Act of 1977 (hereinafter, the "FCPA"), as amended,

15 U.S.c. 78dd-l, et seq., prohibited certain classes of persons and entities from makingpayments to foreign govermnent officials to obtain or retain business or secure an improperadvantage. Title 15, United States Code, Section 78dd-3, specifically prohibited any person otherthan an issuer or domestic concern, while in the territory of he United States, from corruptly makinguse of the mails or any means or instrumentality of interstate commerce in furtherance of an offer,promise, authorization, or payment of money or anything of value to a foreign official for the

purpose of ohtaining or retaining business for or with, or directing business to, any person orsecuring any improper advantage in order to assist in obtaining or retaining business for or with, ordirecting business to, any person.

3. Daimler AG, formerly DaimlerChrysler AG and Daimler Benz AG (collectively


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"Daimler"), was a German vehicle manufacturig company with business operations throughout theworld. Among other things, Daimler sold all manner of cars, trucks, vans, and buses, including

Unimogs, heavy duty all terrain trcks primarily used for hauling, and Actros, large commercialtractor/trailer-style vehicles. Daimler was a major global producer of premium passenger cars, aswell as the largest manufactuer of commercial vehicles in the world. As a result of its luxury carand commercial vehicles lines, Daimler had among its customers goverment and state-ownedentities from many countries in which it did business. Daimler sold its products worldwide, hadproduction facilities on five continents, did business in many foreign countries, and employed morethan 270,000 people.

4. Defendant DAlERCHR YSLER CHINA LTD., now known as Daimler NortEastAsia Ltd. ("DCCL"), was a Beijing-based, wholly-owned Daimler subsidiar and cost center thatmanaged Daimler's business relationships in the People's Republic of China ("China"), assistedDaimler in selecting and managing its joint ventures in China, and helped manage Daimler'sexpatriate employees in China. DCCL, a foreign corporation, was a "person," as that term is usedin the FCPA, 15 US.C. 78dd-3(f)(l).

5. The Bureau of Geophysical Prospecting ("BGP") was a division of the China NationalPetroleum Corporation, a Chinese state-owned oil company. Among other thgs, BGP wasinvolved in searching for oil in various regions of China. BGP was an "instrmentality" of theChinese government, and individuals employed by BGP were "foreign offcials," as those terms are

used in the FCPA, 15 U.S.C. 78dd-3(f)(2)(A).6. Sinopec Corp. ("Sinopec") was a Chinese state-owned energy company involved in,

among other things, the exploration and production of petroleum and natual gas, as well as the

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"Daimler"), was a Gennan vehicle manufacturing company with business operations throughout theworld. Among other things, Daimler sold all manner of cars, trucks, vans, and buses, including

Unimogs, heavy duty all terrain trucks primarily used for hauling, and Actros, large commercialtractor/trailer-style vehicles. Daimler was a major global producer ofpremium passenger cars, aswell as the largest manufacturer of commercial vehicles in the world. As a result of its luxury carand commercial vehicles lines, Daimler had among its customers goverrunent and state-ownedentities from many countries in which it did business. Daimler sold its products worldwide, hadproduction facilities on five continents, did business in many foreign countries, and employed morethan 270,000 people.

4. Defendant DAlMLERCHRYSLER CHINA LTD., now koown as Daimler NorthEastAsia Ltd. (HDCCL"), was a Beijing-based, wholly-owned Daimler subsidiary and cost center thatmanaged Daimler's business relationships in the People's Republic of China ("China"), assistedDaimler in selecting and managing its joint ventures in China, and helped manage Daimler'sexpatriate employees in China. DCCL, a foreign corporation, was a "person," as that tenn is usedin the FCPA, 15 US.C. 78dd-3(f)(1).

5. The BureauofGeophysical Prospecting ("BGP") was a division of he China NationalPetroleum Corporation, a Chinese state-owned oil company. Among other things, BGP wasinvolved in searching for oil in various regions of China. BGP was an "instrumentality" of theChinese government, and individuals employed by BGP were "foreign officials," as those tenns are

used in the FCPA, 15 U.S.C. 78dd-3(f)(2)(A).6. Sinopec Corp. ("Sinopec") was a Chinese state-owned energy company involved in,

among other things, the exploration and production of petroleum and natural gas, as well as the

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refining and sale of petroleum products. Sinopec was an "instrmentality" of the Chinesegoverment, and individuals employed by Sinopec were "foreign officials," as those terms are used

in the FCPA, 15 U.S.C. 78dd-3(f)(2)(A).7. ChangqingPetroleum Exploration Bureau ("Changqing") was a Chinese state-owned

oil and natural gas extracting company. Changqing was an "instrentality" of the Chinesegoverment, and individuals employed by Changqing were "foreign offcials," as those terms areused in the FCPA, 15 U.S.C. 78dd-3(f)(2)(A).

BACKGROUN REGARING DCCL'S BRIBERY8. At various times, Daimler operated a myrad of wholly and partially-owned

subsidiaries and joint ventues to sell its vehicles in China and Hong Kong. Although DCCL did notitself sell any vehicles directly into China, certain DCCL employees assisted with the sale of vehiclesby various Daimler divisions in Germany to goverment customers in China, including principallyBGP and Sinopec.

9. Between 2000 and2005, DCCL employees and/or Daimler employees through DCCL

made at least 4, 1 73,944 in improper payments in the form of "commissions," delegation travel, andgifts for the benefit of Chinese government officials or their designees, in connection with over112,357,719 in sales of commercial vehicles and Unimogs to Chinese government customers.These sales to Chiese govermnent customers were made directly from Daimler's commercialvehicles and Unimog divisions in Germany through various intermediaries with the assistance of

DCCL employees in the commercial vehicles division.10. To make improper payments to Chinese government offcials, Daimler and DCCL

typically inflated the sales price of vehicles sold to Chinese goverment customers and then

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refining and sale of petroleum products. Sinopec was an "instrumentality" of the Chinesegovernment, and individuals employed by Sinopec were "foreign officials," as those terms are used

in the FCPA, 15 U.S.C. 78dd-3(f)(2)(A).7. ChangqingPetroleum Exploration Bureau ("Changqing") was a Chinese state-owned

oil and natural gas extracting company. Changqing was an "instrumentality" of the Chinesegovernment, and individuals employed by Changqing were "foreign officials," as those terms areused in the FCPA, 15 U.S.C. 78dd-3(f)(2)(A).

BACKGROUND REGARDING DCCL'S BRIBERY

8. At various times, Daimler operated a myriad of wholly and partially-ownedsubsidiaries and joint ventnres to sell its vehicles in China and Hong Kong. Although DCCL did notitself sell anyvehic1es directly into China, certain DCCL employees assisted with the sale ofvehiclesby various Daimler divisions in Germany to government customers in China, including principallyBGP and Sinopec.

9. Between 2000 and2005, DCCL employees andlor Daimler employees through DCCLmade at least 4, I 73,944 in improper payments in the form of"commissions," delegation travel, andgifts for the benefit of Chinese government officials or their designees, in connection with over112,357,719 in sales of commercial vehicles and Unimogs to Chinese government customers.These sales to Chinese government customers were made directly from Daimler's commercialvehicles and Unimog divisions in Germany through various intermediaries with the assistance of

DCCL employees in the commercial vehicles division.10. To make improper payments to Chinese government officials, Daimler and DCCL

typically inflated the sales price of vehicles sold to Chinese government customers and then

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maintained the overpayments in debtor accounts on Daimler's books and records, including onedebtor account called the "special commissions" account. The "special commissions" account, also

known as the "8 I 9" account for the last three digits f the account number, was used by Daimler tomake improper payments to Chinese government offcials. DCCL employees, including its thenhead of sales and marketing (the "Sales and Marketing Head"), disbursed payments from the 819account to and for the benefit of Chinese governent officials. The Sales and Marketing Head wasin charge of sales for commercial vehicles and had the authority to cause the wiring of fuds froma Daimler bank account in Germany to Chinese goverment offcials or their designees. At the time,no checks or policies were in place to ensure the legitimacy or appropriateness of such payments.

Ii. DCCL and Daimler also employed agents to assist in securing commercial vehiclesand Unimog business from Chinese governent customers. Neither DCCL nor Daimler performeddue diligence on these agents, and there were inadequate controls in place to ensure that paymentsmade to these agents were not passed on to Chinese governent officials and their designees. Theagency agreements were often not in writing. In addition, DCCL and Daimler lacked adequateoversight into the appropriateness or purpose of payments from debtor accounts that ultimately wentto government officials in China and their designees. Finance and controls oversight was so lackingwith respect to Daimer's sale of commercial vehicles in China that DCCL's Sales and MarketingHead was able to remove at least approximately 230,000 from a company debtor account withoutdetection, and then direct those funds to the offshore bank account of his wife.

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maintained the overpayments in debtor accounts on Daimler's books and records, including onedebtor account called the "special commissions" account. The "special commissions" account, also

known as the "819" account for the last three digits of the account number, was used by Daimler tomake improper payments to Chinese government officials. DCCL employees, including its thenhead of sales and marketing (the "Sales and Marketing Head"), disbursed payments from the 819account to and for the benefit of Chinese government officials. The Sales and Marketing Head wasin charge of sales for commercial vehicles and had the authority to cause the wiring of funds froma Daimler bank account in Germany to Chinese government officials or their designees. At the time,no checks or policies were in place to ensure the legitimacy or appropriateness of such payments.

II. DCCL and Daimler also employed agents to assist in securing commercial vehiclesand Unimog business from Chinese government customers. Neither DCCL nor Daimler performeddue diligence on these agents, and there were inadequate controls in place to ensure that paymentsmade to these agents were not passed on to Chinese government officials and their designees. Theagency agreements were often not in writing. In addition, DCCL and Daimler lacked adequateoversight into the appropriateness or purpose ofpayments from debtor accounts that ultimately wentto government officials in China and their designees. Finance and controls oversight was so lackingwith respect to Daimler's sale of commercial vehicles in China that DCCL's Sales and MarketingHead was able to remove at least approximately230,OOO from a company debtor account withoutdetection, and then direct those funds to the offshore bank account of his wife.

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COUNT ONE(Conspiracy)

12. Paragraphs I though II of this Information are realleged and incorporated byreference as if fully set forth herein.

13. From in or about 2000 through in or about 2005, within the territory of the UnitedStates and elsewhere, defendant DCCL, the Sales and Marketing Head, and others, known andunown, did unlawfully, wilfully, and knowingly combine, conspire, confederate, and agree,together and with each other, to commit an offense against the United States, specifically, to wilfullyuse the means and instrumentalities of interstate commerce corrptly in futherance of an offer,payment, promise to pay, and the authorization of the payment of money, and offer, gift, promise togive, and authorization ofthe giving of anything of value to any foreign official, or any person, whileknowing that all or a portion of such money or thing of value would be offered, given, and promised,directly and indirectly, to any foreign officials, for puroses of: (i) infuencing the acts and decisionsof such foreign officials in their offcial capacities; (ii) inducing such forcign officials to do and omitto do acts in violation ofthe lawfu duties of such officials; (iii) securing an improper advantage; and(iv) inducing such foreign officials to use their infuence with a foreign governent andinstrumentalities thereof to affect and influence acts and decisions of such governent andinstrentalities, that is, DCCL paid moncy and gave gifts and things of value to Chinese

goverment officials in order to assist DCCL and its parent, Daimler, in obtaining and retainngbusiness, in violation of the FCPA, 15 U.S.C. 78dd-3.

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COUNT ONE(Conspiracy)12. Paragraphs 1 through 11 afthis Information are realleged and incorporated by

reference as if fully set forth herein.13. From in or about 2000 through in or about 2005, within the territory of the United

States and elsewhere, defendant DCCL, the Sales and Marketing Head, and others, known andunknown, did unlawfully, willfully, and knowingly combine, conspire, confederate, and agree,together andwith each other, to commit an offense against the United States, specifically, to willfullyuse the means and instrumentalities of interstate commerce corruptly in furtherance of an offer,payment, promise to pay, and the authorization of the payment of money, and offer, gift, promise togive, and authorization ofthe giving ofanything ofvalue to any foreign official, or any person, whileknowing that all or a portionofsuch money or thing ofvalue would be offered, given, and promised,directly and indirectly, to any foreign officials, for purposes of: (i) influencing the acts and decisionsofsuch foreign officials in their official capacities; (ii) inducing such foreign officials to do and omitto do acts in violation ofthe lawful duties ofsuch officials; (iii) securing an improper advantage; and(iv) inducing such foreign officials to use their influence with a foreign government andinstrumentalities thereof to affect and influence acts and decisions of such government andinstrumentalities, that is, DCCL paid money and gave gifts and things of value to Chinesegovernment officials in order to assist DCCL and its parent, Daimler, in obtaining and retainingbusiness, in violation of the FCPA, 15 U.S.C. 78dd-3.

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PURPOSE OF THE CONSPIRACY14. The purose of the conspiracy was for DCCL to make improper payments to Chinese

goverment offcials to induce them to cause Chinese government agencies and instrmentalities topurchase Daimler vehicles.

Mc"'NERAND MEANS OF THE CONSPIRACY15. To achieve the object ofthe conspiracy, DCCL and others, known and unown, used

the following maner and means, among others:a. DCCL and Daimler made improper payments directly to Chinese governent

officials in connection with sales to BGP and Sinopec, Daimler's largest governent customers forits commercial vehicles in China. In total, Daimler and DCCL made approximately 2,599,694 inimproper payments to Chinese governent offcials associated with these entities to assist inobtaining sales worth approximately 71,562,882.

b. Between 2001 and 2004, DCCL and Daimler at the direction of Chinesegoverment offcials made improper payments totaling at least188,840 into U.S. ban accountsbelonging to third parties to obtain contracts valued at 5,533,381 for the sale of commercialvehicles and Unimogs to Chinese governent customers. These payments were made into U.S. bankaccounts even though no part of the transaction involved the U.S., nor were the entities thatnominally controlled the ban accounts parties to any ofthe transactions. DCCL and Daimler didnot perform any due diligence to discern who the recipients were. Further, the corporate entities thatreceived the payments from Daimler for the benefit of the Chinese governent offcials performedno legitimate services for DCCL or Daimler and did nothing to ear these payments.

c. Between 1998 and 2005, DCCL and Daimler also provided at least 268,568

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PURPOSE OF THE CONSPIRACY

14. The purpose of he conspiracy was for DCCL to make improper payments to Chinesegovernment officials to induce them to cause Chinese government agencies and instrumentalities topurchase Daimler vehicles.

M ~ " ' I N E R A N D MEANS OF THE C O ~ S P I R A C Y 15. To achieve the object ofthe conspiracy, DCCL and others, known and unknown, used

the following manner and means, among others:a. DCCL and Daimler made improper payments directly to Chinese government

officials in connection with sales to BGP and Sinopec, Daimler's largest government customers forits cornmercial vehicles in China. In total, Daimler and DCCL made approximately 2,599,694 inimproper payments to Chinese government officials associated with these entities to assist inobtaining sales worth approximately 71,562,882.

b. Between 2001 and 2004, DCCL and Daimler at the direction of Chinesegovernment officials made improper payments totaling at least188,840 into U.S. bank accountsbelonging to third parties to obtain contracts valued at 5,533,38l for the sale of commercialvehicles and Unimogs to Chinese government customers. These payments were made into U.S. bankaccounts even though no part of the transaction involved the U.S., nor were the entities thatnominally controlled the bank accounts parties to any ofthe transactions. DCCL and Daimler didnot perform any due diligence to discern who the recipients were. Further, the corporate entities that

received the payments from Daimler for the benefit of the Chinese government officials performedno legitimate services for DCCL or Daimler and did nothing to earn these payments.

c. Between 1998 and 2005, DCCL and Daimler also provided at least 268,568

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worth of delegation trips to employees of its governent customers in China for the purose ofassisting in securng business from those customers. Agents workig as intermediares between

DCCL and Daimler, on the one hand, and its Chinese government customers, on the other hand,typically requested the delegation trips up front durng the contract negotiation process on behalf ofthe customer involved. DCCL and Daimler then estimated the cost of the trip and increased thepurchase price of the vehicles accordingly. Some contracts characterized these trips as "factoryinspection trips," even though the trips were primarily visits to tourist locations.

OVERT ACTS16. In furtherance of the conspiracy and to accomplish its unlawful object, at least one

of the co-conspirators committed or caused to be commtted, within the territory of the United Statesand elsewhere, the following overt acts, among others:

Use Of Agents To Make Improper Payments For The Purpose OfSecuring Business From Chinese State-Owned EntitiesM.F. Mechanical & Electrical, Inc.

a. On or about July 27,2001, DCCL and Daimler paid M.F. Mechanical &Electrical, Inc. ("M.F. Mechanical"), approximately 98,300 in connection with a 1,875,777contract for the sale of Unimogs to Changqing. Daimler wired the payment from its account inGermany to M.F. Mechanical's bank account at the Far East National Ban in Los Angeles,California. The payment was for the benefit of the Changqing official who helped Daimler securethe contract. Although a consulting contract existed between M.F. Mechanical and Daimler, it wassigned after the underlying contract between DCCL and Changqing was executed, and one monthbefore a DCCL executive authorizcd thc 98,300 improper payment. DCCL and Daimler made the

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worth of delegation trips to employees of its government customers in China for the purpose ofassisting in securing business from those customers. Agents working as intermediaries between

DCCL and Daimler, on the one hand, and its Chinese government customers, on the other hand,typically requested the delegation trips up front during the contract negotiation process on behalfofthe customer involved. DCCL and Daimler then estimated the cost of the trip and increased thepurchase price of the vehicles accordingly. Some contracts characterized these trips as "factoryinspection trips," even though the trips were primarily visits to tourist locations.

OVERT ACTS16. In furtherance of the conspiracy and to accomplish its unlawful object, at least one

of he co-conspirators committed or caused to be committed, within the territory of he United Statesand elsewhere, the following overt acts, among others:

Use Of Agents To Make Improper Payments For The Purpose OfSecuring Business From Chiuese State-Owned EntitiesM.F. Mechanical & Electrical, Inc.

a. On or about July 27,2001, DCCL and Daimler paid M.F. Mechanical &Electrical, Inc. ("M.F. Mechanical"), approximately 98,300 in connection with a 1,875,777contract for the sale of Unimogs to Changqing. Daimler wired the payment from its account inGermany to M.F. Mechanical's bank account at the Far East National Bank in Los Angeles,California. The payment was for the benefit of the Changqing official who helped Daimler securethe contract. Although a consulting contract existed between M.F. Mechanical and Daimler, it wassigned after the underlying contract between DCCL and Changqing was executed, and one monthbefore a DCCL executive authorized the 98,300 improper payment. DCCL and Daimler made the

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payment with the understanding that it would be passed on, in whole or in part, to the Changqingoffcial or his designees.

Shores International

b. On or about February 28, 2002, DCCL and Daimler made a purorted

commission payment in the amount of18,000 from its account in Germany to Shores International("Shores"), a Texas corporation, to an account at Metrobank in Houston, Texas, in connection withthe sale of 1 ,009,497 worth of commercial vehicles to Sinopec. The payment to Shores, thecorporate address for which was a residential apartment complex in Houston, was a purportedcommission payment to the wife of a Chinese governent offcial at Sinopec involved in contractimplementation. DCCL and Daimler made the payment with the understanding that it would bepassed on, in whole or in part, to Sinopec offcials or their designees.Lily Energy Services, Inc.

c. On or about February 21, 2003, DCCL and Daimler made a purorted

commission payment of approximately 15,000 from an account in Germany to Lily EnergyServices, Inc. ("Lily"), a Texas corporation, at American First National Bank in Houston, Texas, inconnection with the sale of six Actros trcks valued at 492,000 to Changqing. Lily was owned bythe same Changqing official for whose benefit the payment was made through M.F. Mechancal,referenced above. There was no written consulting agreement between DCCL or Daimler and Lily,nor did Lily provide any legitimate services to DCCL or Daimler. DCCL and Daimler made thepayment with the understanding that it would be passed on, in whole or in part, to the Changqingoffcial or his designees.

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payment with the understanding that it would be passed on, in whole or in part, to the Changqingofficial or his designees.

Shores Internationalb. On or about February 28, 2002, DCCL and Daimler made a purported

commission payment in the amount of18,000 from its account in Germany to Shores International("Shores"), a Texas corporation, to an account at Metrobank in Houston, Texas, in connection withthe sale of l ,009,497 worth of commercial vehicles to Sinopec. The payment to Shores, thecorporate address for which was a residential apartment complex in Houston, was a purportedcommission payment to the wife of a Chinese government official at Sinopec involved in contractimplementation. DCCL and Daimler made the payment with the understanding that it would bepassed on, in whole or in part, to Sinopec officials or their designees.Lily Energy Services, Inc.

c. On or about February 21, 2003, DCCL and Daimler made a purportedcommission payment of approximately 15,000 from an account in Germany to Lily EnergyServices, Inc. ("Lily"), a Texas corporation, at American First National Bank in Houston, Texas, inconnection with the sale of six Actros trucks valued at 492,000 to Changqing. Lily was owned bythe same Changqing official for whose benefit the payment was made through M.F. Mechanical,referenced above. There was no written consulting agreement between DCCL or Daimler and Lily,nor did Lily provide any legitimate services to DCCL or Daimler. DCCL and Daimler made the

payment with the understanding that it would be passed on, in whole or in part, to the Changqingofficial or his designees.

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King Jack, Inc.d. On or about October 25, 2004, DCCL and Daimler made a payment of

approximately 53,540 from an account in Germany to King Jack Inc., a California corporation, toan account at Cathay Ban, City of Industr, California, in connection with the June 2004 sale of 16

Unimogs and 12 Actros to Sinopec, a deal valued at over 2 milion. The owner of Kig Jack hada US. address in Texas. Neither King Jack nor its owner performed any legitimate services forDCCL or Daimler. DCCL and Daimler made the payment with the understanding that it would bepassed on, in whole or in part, to Sinopec officials or their designees.Chinese Agent A

e. On June 9, 2003, a DCCL employee wired approximately 4,000 from DCCL's

account in Germany to an individual's ("Chinese Agent A's") account at Ban of America in SanFrancisco, California, in connection with the sale of one Actros trck, valued at 87,000, to BGP.There was neither a written consulting agreement between DCCL or Daimler and Chinese Agent A,nor did he perform any services for DCCL or Daimler. DCCL and Daimler made the payment withthe understanding that it would be passed on, in whole or in part, to BGP offcials or their designees.

Additional Improper Payments For The Purpose OfSecuring Business From Chinese State-Owned Entitiesf. DCCL and Daimler made the following additional improper payments to assist in

obtaining or retaining business from BGP and Sinopec:(i) Between April 2000 and October 2004, multiple payments totaling at least

approximately 155,905 for the purose of entertaining executives at bothentities;(ii) On or about July 8, 2003, and September 17, 2004, payments totalingapproximately 56,400 into accounts at multiple banks to an individual

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King Jack, Inc.d. On or about October 25, 2004, DCCL and Daimler made a payment of

approximately 53,540 from an account in Germany to King Jack Inc., a California corporation, toan account at Cathay Bank, City ofIndustry, California, in cormection with the June 2004 sale of 16Unimogs and 12 Actros to Sinopec, a deal valued at over 2 million. The owner ofKing Jack hada U.S. address in Texas. Neither King Jack nor its owner performed any legitimate services forDCCL or Daimler. DCCL and Daimler made the payment with the understanding that it would bepassed on, in whole or in part, to Sinopec officials or their designees.Chinese Agent A

e. On June 9, 2003, a DCCL employee wired approximately 4,000 from DCCL'saccount in Germany to an individual's ("Chinese Agent A's") account at Bank of America in SanFrancisco, California, in cormection with the sale of one Actros truck, valued at 87,000, to BGP.There was neither a written consulting agreement between DCCL or Daimler and Chinese Agent A,nor did he perform any services for DCCL or Daimler. DCCL and Daimler made the payment withthe understanding that it would be passed on, in whole or in part, to BGP officials or their designees.

Additional Improper Payments For The Purpose OfSecuring Business From Chinese State-Owned Entitiesf. DCCL and Daimler made the following additional improper payments to assist in

obtaining or retaining business from BGP and Sinopec:(i) Between April 2000 and October 2004, multiple payments totaling at least

approximately 155,905 for the purpose of entertaining executives at bothentities;(ii) On or about July 8, 2003, and September 17, 2004, payments totalingapproximately 56,400 into accounts at multiple banks to an individual

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associated with an offcial at BGP in charge of operations in another countr;(iii) On or about December 16,2004, a payment of approximately 14,800 to arelative of a Chinese govemment official associated with BGP in connection

with the sale of commercial vehicles to BGP;(iv) Between March 2002 and February 2003, payments totaling approximately30,000 in commissions for "market research" to the Stuttgart bank accountoftle son of an offcial ofBGP; and(v) On or about April 18, 2002, a payment ofapproximately57,000 to the wifeof a Chinese government official employed at Sinopec. In order to conceal

the nature of the payment, on or about April 13, 2001, the day after Sinopecagreed to purchase commercial vehicles from Daimler, DCCL employees,on behalf ofthe company, entered into a phony consulting agreement with thewife of the Chiese government offcial, in exchange for which no servceswere ever performed.

g. Between 2000 and 2005, DCCL and Daimler provided the following things of value,among others, to the son of a Chinese goverment oIicial who made purchasing decisions for BGPin order to assist in securng business from BGP:

(i) internships at Daimler for him and his girlfriend in 200 i;

(ii) letters from a former Daimler employee to German immigration officials toassist him and his girlfriend with their efforts to obtain student visas;

(iii) 2,223 in expenses to attend a truck race in July 2004 for him, the Chinesegoverment offcial, and others;(iv) use of a Mercedes passenger car for a period of time; and(v) employment at Daimler from January-April 2005 with a monthly salar of600.

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associated with an official at BGP in chargeofoperations in another country;(iii) On or about December 16,2004, a payment of approximately 14,800 to a

relative ofa Chinese govermnent official associated with BGP in cormectionwith the sale of commercial vehicles to BGP;

(iv) Between March 2002 and February 2003, payments totaling approximately30,000 in commissions for "market research" to the Stuttgart bank accountof the son of an official ofBGP; and

(v) On or about April 18, 2002, a payment ofapproximately57,000 to the wifeof a Chinese government official employed at Sinopec. In order to concealthe nature of the payment, on or about April 13, 200 j , the day after Sinopecagreed to purchase commercial vehicles from Daimler, DCCL employees,on behalfofthe company, entered into a phony consulting agreement with thewife of the Chinese government official, in exchange for which no serviceswere ever performed.

g. Between 2000 and 2005, DCCL and Daimler provided the following things ofvalue,among others, to the son ofa Chinese government otlicial who made purchasing decisions for BGPin order to assist in securing business from BGP:

(i) internships at Daimler for him and his girlfriend in 200 I;(ii) letters from a former Daimler employee to German immigration officials to

assist him and his girlfriend with their efforts to obtain student visas;(iii) 2,223 in expenses to attend a truck race in July 2004 for him, the Chinesegovernment official, and others;(iv) use of a Mercedes passenger car for a period of time; and(v) employment at Daimler from January-April 2005 with a monthly salary of

600.

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Improper Payments For Delegation TripsFor The Purpose Of Securing Business From Sinopech. DCCL and Daimler made the following payments in connection with delegation trips

for the purose of assisting in securing business from Sinopec:

(i) Payments totaling 35,648 for a 14-day delegation trip in December 200 i for12 Sinopec officials to Germany, along with gifts worth 980 to thegoverment offcials on the trip; and(ii) Payments totaling 40,257 in July 2004 for a delegation trip for Sinopecoffcials to Germany. On or about July 15, 2004, a DCCL employee statedin an e-mail that the delegation members planned to travel all over Europe

and would be provided pocket money.All in violation of Title 18, United States Code, Section 371.

COUNT TWO(Foreign Corrupt Practices Act)

17. Paragraphs i through Ii and 14 through i 6 of this Information are realleged andincorporated by reference as if fully set forth herein.

i 8. From in or about 2000 through in or about 2005, defendant DCCL, a "person" within

the meaning of the Foreign Corrpt Practices Act, while in the territory of the United States,willfully did use and cause to be used means and instruentalities of interstate and foreigncommerce corrptly in furtherance of an offer, payment, promise to pay and authorization of thepayment of any money, and offcr, gift, promise to give, and authorization of the giving of anythingof value to any foreign offcial, or any person, while knowing that all or a portion of such money orthing of value would be offered, given, and promised, directly and indirectly, to any foreign offcials,for purposes of: (i) influencing the acts and decisions of such foreign offcials in their officialcapacities; (ii) inducing such foreign offcials to do and omit to do acts in violation of their lawful

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Improper Payments For Delegation TripsFor The Purpose Of Securing Business From Sinopec

h. DCCL and Daimler made the following payments in connection with delegation tripsfor the pnrpose of assisting in securing business from Sinopec:

(i) Payments totaling 35,648 for a 14-day delegation trip in December 200 I for12 Sinopec officials to Germany, along with gifts worth 980 to thegovernment officials on the trip; and

(ii) Payments totaling 40,257 in July 2004 for a delegation trip for Sinopecofficials to Germany. On or about July 15, 2004, a DCCL employee statedin an e-mail that the delegation members planned to travel all over Europeand would be provided pocket money.

All in violation ofTitle 18, United States Code, Section 371.COUNT TWO(Foreign Corrupt Practices Act)

17. Paragraphs I through II and 14 through 16 of this Information are realleged andincorporated by reference as if fully set forth herein.

18. From in or about 2000 through in or about 2005, defendant DCCL, a "person" withinthe meaning of the Foreign Corrupt Practices Act, while in the territory of the United States,willfully did use and cause to be used means and instrumentalities of interstate and foreigncommerce corruptly in furtherance of an offer, payment, promise to pay and authorization of thepayment ofany money, and offer, gift, promise to give, and authorization of he giving of anythingof value to any foreign official, or any person, while knowing that all or a portion of such money orthing ofvalue would be offered, given, and promised, directly and indirectly, to any foreign officials,for purposes of: (i) influencing the acts and decisions of such foreign officials in their officialcapacities; (ii) inducing such foreign officials to do and omittu du acts in violation of their lawful

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duties; (iii) securng an improper advantage; and (iv) inducing such foreign officials to use theirinfluence with a foreign government and instrmentalities thereof to affect and influence acts anddecisions of such governent and instrumentalities, in order to assist DCCL and its parent, Daimler,in obtaining and retainig business for and with, and directing business to, themselves, to wit: (i)DCCL caused wire transfers to be sent from Daimler accounts in Germany to financial institutionsin the United States and elsewhere, via international and interstate wires, in fuherance of corrptpayments to Chinese goverment offcials; (ii) DCCL made payments in fuherance of sham"delegation trps" for Chinese governent offcials; and (iii) DCCL made payments and providedthings of value to family members and designees of Chinese goverment offcials.

All in violation of Title 15, United States Code, Section 78dd-3,and Title 18, United States Code, Section 2.DENIS J. MCINERNEYChief, Fraud Section

By: piv( 'C iiJ(___Mark F. MendelsohnDeputy Chief, Fraud Section

John $! DardenAssistant Chief, Fraud SectionUnited States Department of JusticeCriminal Division1400 New York Ave., N.W.Washington, D.C. 20005

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duties; (iii) securing an improper advantage; and (iv) inducing such foreign officials to use theirinfluence with a foreign government and instrumentalities thereof to affect and influence acts anddecisions ofsuch government and instrumentalities, in order to assistDCCL and its parent, Daimler,in obtaining and retaining business for and with, and directing business to, themselves, to wit: (i)DCCL caused wire transfers to be sent from Daimler accounts in Germany to financial institutionsin the United States and elsewhere, via international and interstate wires, in furtherance of corruptpayments to Chinese government officials; (ii) DCCL made payments in furtherance of sham"delegation trips" for Chinese government officials; and (iii) DCCL made payments and providedthings of value to family members and designees ofChinese government officials.

All in violation ofTitle 15, United States Code, Section 78dd-3,and Title 18, United States Code, Section 2.

By:

DENIS J. MCINERNEYChief, Fraud Section

1/tv( ?;tJ { ____Mark F. MendelsohnDeputy Chief, Fraud Section

John $) DardenAssistant Chief, Fraud SectionUnited States Department of JusticeCriminal Division1400 New York Ave., N.W.Washington, D.C. 20005

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u.s. v. daimlerchrysler china - information

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