This story was updated at 5:27 p.m. EDT.
Siemens Energy has pleaded guilty to stealing information to edge out competitors in a bid to build a Virginia power plant designed to alleviate strain on the grid during periods of high electricity demand.
The U.S.-based company, a subsidiary of German manufacturing corporation Siemens Energy AG, will pay $104 million to resolve a federal criminal investigation into the claims and has agreed to a three-year organizational probation, according to a press release issued Monday by the Department of Justice. The agreement is subject to final approval by a federal court.
“The actions of these defendants undermined the integrity of the competitive marketplace, harming both competitors and consumers,” said Jessica Aber, U.S. attorney for the Eastern District of Virginia, in a statement.
Siemens Energy’s violations stem from a 2019 plan by Dominion Energy to build a $500 million “peaker” plant, or a facility designed to add generation capacity to offset high grid load.
Dominion then solicited bids from qualified companies to build the power plant. General Electric, Mitsubishi Heavy Industries and Siemens Energy submitted proposals, along with agreements limiting disclosure of information provided to Dominion during the bidding process.
According to DOJ’s press release, after GE and Mitsubishi submitted their bids in May 2019, Michael Hillen, an account manager for Siemens Energy, coordinated with Theodore Fasca, a director at Dominion, to obtain the other companies’ confidential information.
Hillen and Fasca used private email accounts — including a Hotmail address owned by Hillen’s wife — to funnel the information, according to DOJ. Hillen then shared the information with Mehran Sharifi, another Siemens Energy account manager, who analyzed the bids and learned that their proposal was less competitive than GE’s.
Sharifi then recommended to John Gibson, Siemens Energy executive vice president and head of sales for North America, that the company resubmit a lower bid to beat out GE. Gibson authorized the lower bid, and the company won out over its competitors.
Siemens Energy continued using the confidential information from GE and Mitsubishi throughout June 2019, according to DOJ.
Gibson, Sharifi, Hillen and Fasca all knew that the information was illegally obtained, according to DOJ. All have entered guilty pleas for their role in the plan.
Sharifi faces a maximum prison sentence of 10 years on charges of conspiracy to convert trade secrets. He is scheduled to be sentenced Oct. 11.
Gibson, Hillen and Fasca have all been sentenced. Gibson faces three years and seven months in prison for conspiracy to convert trade secrets. Hillen and Fasca face sentences of three years and one month for conspiracy to commit wire fraud.
Siemens Energy is scheduled to be sentenced Dec. 5.
The company said in a statement that it discovered its employees’ conduct in 2020 and voluntarily disclosed it to Dominion, GE and Mitsubishi. The company said it conducted its own investigation of the matter and has taken disciplinary action against those involved.
Siemens Energy “is committed to the highest standards of integrity and compliance and the aberrant conduct that occurred in this case does not reflect who we are as a company,” the company said in a statement.
