The investigation into fraud at Siemens now involves as much as 200 million euros, ten times the liability previously admitted.

Two more Siemens staff have been arrested, with six people now in custody. Former chief financial officer of the telecommunications unit, Michael Kutschenreuter, currently the head of Siemens's real-estate division, was arrested last week.

The investigation centres on the use of secret funds channeled through Swiss bank accounts to dummy companies. The funds were apparently used to bribe customer staff into awarding projects to Siemens fixed-line telecommunications unit. Now it is reported in the Wall Street Journal that a team of Siemens people repeatedly used this method to try and win contracts. German police have seized 36,000 archive files as the investigation widens.

The investigation was apparently started after a whistle-blower reported suspect transactions to the Swiss money-laundering authority.

It has also emerged that Italian prosecutors are involved and they suspect the fraud has been going on since the mid-90s. Investigators are also looking at Austrian bank accounts managed by a Siemens staff member, Karl von Jagemann, since arrested, who was not in the telecommunications division. The Italians have been looking into Siemens since 2004 and are focusing on transactions totaling 60 million euros.

Cuno Tarfusser, senior prosecutor in the northern Italian town of Bolzano, is reported to have confirmed that Siemens staff tried to block his investigation using motions filed in an Austrian court to block access to bank accounts in Innsbruck. Siemens has denied knowledge of this.

According to the Italian investigators the fraud they are looking at involved payments for non-existent consulting contracts. The money was channeled through shell companies in the Channel Islands and Puerto Rico. In a separate case, last March German prosecutors charged two former employees of Siemens's power-generation unit with bribery, accusing them of offering €6 million in bribes from 1999 to 2002 to get Italian gas company contracts.

Siemens is co-operating with the investigations according to the company, and said any offences were committed by individuals and not as company policy. What is emerging is the possibility of some Siemens staff undertaking endemic bribery to get contracts, and possibly defrauding Siemens for their own enrichment.