Siemens Energy, Inc. pleads guilty to stealing confidential competitor information in $104M resolution after former corporate executive and others were sentenced

RICHMOND, Va. - Siemens Energy, Inc. (Siemens), pleaded guilty today and has agreed to pay $104 million to resolve the Justice Department's criminal investigation into violations related to the misappropriation of confidential competitor information. Additionally, Siemens has agreed to a three-year term of organizational probation.

Siemens is a U.S.-based subsidiary of a Germany-based global manufacturing conglomerate, Siemens Energy AG (SMNEY), whose technology is responsible for one sixth of electricity production worldwide.

"Corporate accountability remains a top priority for the Department of Justice," said Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia. "The actions of these defendants undermined the integrity of the competitive marketplace, harming both competitors and consumers. The Department has established whistleblower programs to encourage corporations and individuals to come forward with timely information regarding misconduct and criminal behavior. Failing to do so invites prosecution and serious consequences."

"The FBI will work to hold those accountable who steal confidential information to obtain a competitive advantage, whether they be agents, employees, executives, or corporations themselves," said Stanley M. Meador, Special Agent in Charge of the FBI's Richmond Field Office. "We will rigorously investigate those who criminally conspire to defraud companies for their personal gain."

"Corporate fraud schemes ultimately end up hurting the consumers they serve," said Damon E. Wood, Inspector in Charge of the U.S. Postal Inspection Service - Washington Division. "Protecting the U.S. Mail from these schemes will always be a top priority for the U.S. Postal Inspection Service. We are proud to work alongside our law enforcement partners to bring this case to a successful conclusion."

According to court documents, in 2019, Dominion Energy, Inc. (Dominion), a utility company based in Richmond that provides electricity to four million customers in Virginia, North Carolina, and South Carolina, sought to build a "Peaker" combustion turbine power plant in the greater Richmond metropolitan area. Peaker power plants are specifically designed to add electricity generation capacity to alleviate high grid load and improve electric grid resiliency. The electricity infrastructure project had projected cost of upwards of $500 million.

To build the power plant, Dominion opened a competitive, closed bid process soliciting requests for proposals from qualified companies. Three companies bid for the work: General Electric Company (GE), Mitsubishi Heavy Industries, Ltd. (MHI), and Siemens. All companies executed non-disclosure agreements restricting the disclosure of confidential information provided to Dominion during the bid.

After GE and MHI submitted their closed bids to Dominion in May 2019, Account Manager, Michael P. Hillen of Siemens coordinated with a Dominion insider, Director of Generation System Planning Theodore S. Fasca, who used his sensitive position to improperly obtain GE and MHI confidential information. Hillen and Fasca funneled the pilfered GE and MHI bid information through private email accounts, including Hillen's wife's Hotmail email address, before sending the confidential information to Hillen's Siemens email address. Hillen then disseminated the confidential information to Siemens Account Manager Mehran Sharifi, who analyzed the confidential bid information with other employees. Realizing that Siemens had a less competitive bid than GE by some metrics, Sharifi recommended to Siemens Executive Vice President and Head of Sales for North America, John Gibson, that Siemens resubmit a lowered bid to undercut GE's bid price. Gibson, Sharifi, Hillen, and Fasca all knew the GE and MHI bid information was improperly obtained and that Siemens should not have had access to this information.

Gibson strategically disseminated the confidential information to other Siemens senior executives, to leaders within Siemens' business intelligence unit, and to representatives of Siemens' then-parent company in Germany. Gibson's dissemination of the information was calculated to provide Siemens with a competitive advantage in the bid for the Dominion project, improve Siemens' business intelligence, and provide Siemens with a competitive advantage in future bids, all to the detriment of GE and MHI.

After learning of GE's and MHI's bids for the Dominion project, Gibson authorized and obtained approvals within Siemens, including from the Chief Executive Officer for Power Generation and representatives of Siemens' then-parent company in Germany, to resubmit a lower bid for the Dominion project, undercutting GE's bid. Siemens won the bid with Dominion. Even after submitting the lowered bid, Siemens continued misappropriating GE and MHI confidential information on numerous occasions throughout June 2019.

Siemens Energy Inc. is scheduled to be sentenced on Dec. 5. The company's plea today comes after Gibson, Hillen, Fasca, and Sharifi entered guilty pleas for their roles in the criminal misconduct.

Gibson pled guilty to conspiracy to convert trade secrets and was sentenced to three years and seven months in prison.

Hillen and Fasca each pled guilty to conspiracy to commit wire fraud and were sentenced to three years and one month in prison.

Sharifi pled guilty to conspiracy to convert trade secrets and is scheduled to be sentenced on Oct. 11. He faces a maximum penalty of 10 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Avi Panth, Kenneth R. Simon, Jr., and Brian J. Samuels are prosecuting the case. Former Assistant U.S. Attorney Michael R. Gill assisted the prosecution.

A copy of this press release is located on the website of the U.S. Attorney's Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 3:24-cr-141 (Siemens Energy, Inc.), 3:23-cr-137 (John Gibson), 3:23-cr-83 (Theodore S. Fasca), 3:24-cr-20 (Mehran Sharifi), and 3:23-cr-120 (Michael P. Hillen).