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Wednesday
Oct082014

Austria: Two former banknote printing execs plead guilty in overseas graft prosecution

Two former executive directors of Austria's state-owned banknote printer pleaded guilty during a criminal trial in Vienna for a conspiracy to win business by bribing officials in Syria and Azerbaijan.

Michael Wolf and Johannes Miller were given two-year suspended jail sentences, the Local (Austria) said Friday.

Wolfgang Duchatczek, former chairman of Oesterreichische Banknoten und Sicherheitsdruck GmbH (OeBS), was acquitted.

OeBS, a subsidiary of Austria’s central bank, was "implicated after an 18 month investigation of alleged kick-backs to overseas officials," the Local said.

Bribes totalling $17.5 million were allegedly paid to Syrian and Azeri officials, including governors of those countries' central banks.

Nine people were charged in Austria last year in the alleged conspiracy.

The investigation found that the money was transferred via offshore shell companies from 2005 to 2011. Internal auditors found evidence of payments without associated services, the English-language Local said.

In another case involving banknote printing, seven senior executives from subsidiaries of Australia's central bank were indicted in June this year.

The executives from Reserve Bank of Australia subsidiaries Securency and Note Printing Australia allegedly paid massive bribes to government officials in Malaysia, Indonesia, Vietnam and other countries to win contracts to supply polymer bank notes to those countries.

The Supreme Court of Victoria in Melbourne issued a "super-injunction" to prevent reporting about the case, to “prevent damage to Australia's international relations.”

In the trial last week in Vienna, the jury believed that the main witness, a former sales representative at the Austrian money printer, “told nothing but the truth,” according to judge Georg Olschak.

Former OeBS managing director Wolf admitted knowing about the bribes when the trial started.

Miller changed his plea to guilty after the trial started, "saying he wanted to clear his conscience," the Local said.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.