ABB subsidiary is charged with fraud in the US

A subsidiary of the ABB group has been charged with fraud in the United States Keystone Archive

A subsidiary of the Swiss technology giant, ABB , has pleaded guilty to fraud in the United States and has agreed to pay $63 million ( SFr107 million) in fines.

According to the New York Times on Friday, the subsidiary took part in a conspiracy to defraud the American government out of tens of millions of dollars earmarked for an Egyptian Water Project.

The newspaper said the conspiracy lasted for more than seven years and involved the rigging of contract bids submitted in the late 80s and early 90s for an US Agency for the International Development funded water project

Contracts were supposed to be awarded through competitive bidding. But at least six international construction companies subverted the process through the payment of bribes and kickbacks to possible bidders, fraudulent billings to the government and the laundering of cash through Swiss bank accounts.

The New York Times reported that in their plea on Thursday in an American court, ABB Middle East and Africa Participations, a Milan-based subsidiary of the engineering and technology group, admitted to taking part in a conspiracy to rig the bidding.

The newspaper went on to explain that the ABB unit met other potential bidders and agreed to pay them $3.4 million (SFr 5.8 million) to submit inflated bids for the project.

The ABB unit was then able to inflate it’s own bid knowing that it would undercut the others and be accepted. The value of the awarded contract for building a wastewater treatment plant in Abu Rawash in Egypt was about $135 million (SFr 230 million).

An ABB spokesman, William Kelly, said the crimes were conducted by a small group of employees, all of whom had since left the company for reasons unrelated to the project.

swissinfo with agencies