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Germany Arrests Former Hewlett-Packard Managers

A report today in Bloomberg's Businessweek said state prosecutors in Germany arrested three former Hewlett-Packard managers for paying bribes in Russia nine years ago.

A spokesman for the Saxony chief prosecutor said a Finnish woman, an American man and a German man were charged with bribery, breach of trust, and aiding in tax evasion.

The spokesman said bribes of about €7.5 million went to Russian officials to win computer sales for H-P. The payments were made through 'a network of accounts at companies in several countries was used to hide the money transfer,' he said.

H-P disclosed last year that it was under investigation in the U.S. by the DOJ and SEC for potential FCPA violations in a deal to sell computer equipment to the Russian General Prosecutor's Office (GPO).

It said it was also cooperating with the German public prosecutor's office in an investigation into 'allegations that current and former employees of H-P engaged in bribery, embezzlement and tax evasion relating to a transaction between Hewlett-Packard ISE GmbH in Germany, a former subsidiary of HP, and the General Prosecutor's Office of the Russian Federation.'

'The approximately €35 million transaction,' H-P said, 'which was referred to as the Russia GPO deal, spanned the years 2001 to 2006 and was for the delivery and installation of an information technology network.'

Hewlett-Packard’s Moscow offices were searched in 2010 in a bribery investigation by Russian prosecutors.

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