Siemens facing lawsuit from ex-compliance officer over alleged kickback scheme

Siemens AG has been sued by a former compliance officer in its China unit on accusations that the officer was fired after he tried to expose evidence of a kickback scheme involving medical equipment sales to hospitals.

Meng-Lin Liu brought the suit under the 2010 Dodd-Frank Wall Street reform law and filed the complaint in U.S. federal court in Manhattan, according to Reuters.

He alleged he had “incontrovertible evidence” that he had uncovered a bribery scheme in which Siemens China submitted inflated bids to sell medical diagnostic and scanning equipment, including MRI and CT, to public hospitals in China and North Korea. The company then allegedly sold the equipment at lower prices to intermediaries picked by hospital procurement officials, according to Reuters.

The intermediaries then allegedly sold the equipment to the hospitals at a significant markup over the price paid to Siemens. “This had all of the hallmarks of a classic bribery or ‘kickback’ scheme and there was no legitimate explanation for the huge price differentials that existed between the prices at which Siemens sold the equipment and the prices paid by the end-user hospitals,” read the complaint, obtained by Bloomberg News.

Liu, who was hired by Siemens in 2008, claims he was fired after he presented his evidence to Siemens China’s chief financial officer for healthcare, according to Bloomberg. He is seeking unspecified damages related to lost pay and litigation costs.

In 2008, Siemens agreed to pay $1.6 billion to settle charges it had violated foreign anti-bribery laws brought by U.S. and German authorities.