US joins HP bribery investigation -

Details are emerging of HPs latest scandal as the net widens with the US saying it is also investigating the maker of extraordinarily priced printer ink.

The US Justice Department and Securities and Exchange Commission says it has joined German and Russian authorities in investigating whether HP executives paid millions of dollars in bribes to Russian officials to win a contract in Russia.

The Americans are concerned that HP might have violated the Foreign Corrupt Practices Act. This law bars American companies from bribing foreign-government officials.

The Justice Department lock up company officials while SEC can levy civil penalties against alleged violators.

HP initially said that the charges were old, and related to employees who had left the company. This will be news to one of the people being investigated by the Germans as he still works at the company.

Those under investigation include a former head of HP's sales operations in Russia and the former Soviet Union.

The Germans are checking if the executives paid €8 million in bribes, via a complex network, to win a €35 million Russian contract.

The Germans arrested the three in early December on suspicion of bribing foreign officials, tax evasion and breach of trust. They've since been bailed.

A prosecution spokesman said they remain suspects, but that investigators haven't found any evidence that they enriched themselves. This would mean that they were probably doing it entirely for the company.

At the heart of it all is an HP subsidiary with the catchy title Hewlett-Packard International Sales Europe GmbH. After receiving a €35 million payment for the Russian contract, it sent about €8 million in suspected bribes back to unidentified officials in Russia.

The cash was funnelled through three independent sellers of HP equipment based in eastern Germany.

The three received fake invoices from shell companies representing unidentified parties through a Moscow-based computer supplier.

They paid the invoices — for equipment they never purchased, to shell companies with bank accounts in Latvia, Lithuania, Austria, Switzerland and Belize.

The three H-P employees under investigation are: Hilmar Lorenz, the former head of HP sales in Russia and the former Soviet Union; Kenneth Willett, who led a Germany-based H-P unit that dealt with equipment sales throughout Europe, the Middle East and Africa from 2003 until it was disbanded in 2007; and Paeivi Tiippana, who preceded Willett as head of the German unit.

Willett, an American, currently works for H-P as a senior marketing executive in Germany. HP said he has been on leave since he was released from a German jail on January the 6th after posting €250,000 bail.

Lorenz was a key HP representative in Russia and the former Soviet Union, securing millions of dollars in contracts for the company.

He was often joined by senior government officials in announcing the deals, including the Russian leader Vladimir Putin.