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. Last Updated: 07/27/2016

Mercedes Execs Investigated for Fraud




STUTTGART, Germany -- Two top Mercedes employees are under investigation for fraud and embezzlement in connection with never-realized plans to ship $870 million worth of luxury cars to Russia in 1993.


Prosecutor Sabine Maylaender said Monday that payment for the 11,000 cars was supposedly to have come from millions stashed away in Switzerland by Soviet officials in the 1980s.


"The two suspects allegedly negotiated [the deal] to the disadvantage of their employer," she said. A German businessman who acted as a middleman is also part of the investigation, which has been under way for two years.


Daimler-Benz, parent company of Mercedes, declined to comment because the investigation was still open.


According to a report on South German Radio, the cars were to be sold at inflated prices. The alleged middleman received $20 million in Monaco as a "confidence-building measure,'' although top Mercedes managers had reservations about the deal.


The middleman was to be paid $217.5 million in all for disguising the source of the Russian funds, but the whole thing fell through. Further details were not immediately known.