Siemens Wins Dismissal of Suit Over Alleged Chinese Kickback Scheme

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U.S. District Judge William Pauley has dismissed the whistle-blower lawsuit of an former compliance officer for Siemens Ltd. China.

The employee, Meng-Lin Liu of Taiwan, had filed a complaint saying he was discriminated against (denied travel funds and stripped of responsibilities) and later unjustly fired after he spoke out about an alleged kickback scheme to help Siemens sell its diagnostic imaging equipment to Chinese and North Korean public hospitals. According to Liu’s suit, Siemens Ltd. China would inflate its bids to sell diagnostic imaging equipment to hospitals. Then, it would sell the equipment to intermediaries for less than the price of the bid. These intermediaries would subsequently resell the equipment to the hospitals for the full price of the bid and pass on the money they pocketed to officials in charge of approving the bids in the first place.

Judge Pauley, who presides over the Southern District of New York (Manhattan), did not issue a judgement on the veracity of the kickback claim. Rather, he found that the Dodd-Frank Act’s provisions to protect whistleblowers from retaliation did not apply to Liu since his case took place outside of the United States.

The judge also denied Liu’s request to file an amended complaint.

Read the ruling here.