People walk around a Daimler SL 500 car during Daimler's annual shareholder meeting in Berlin April 9, 2008

WASHINGTON (Reuters) - Daimler AG's $185 million settlement of allegations the luxury car and truck maker violated U.S. anti-bribery laws by showering foreign government officials with money and gifts to win contracts was approved by a federal judge on Thursday.

Daimler settled charges by the Justice Department and the Securities and Exchange Commission, but remains subject to a two-year deferred prosecution agreement and oversight by an independent monitor.

Daimler's German and Russian units each agreed to plead guilty to two counts of violating U.S. anti-bribery laws. Its China subsidiary will be subject to the two-year deferred prosecution agreement as well.

Former FBI Director Louis Freeh will serve as the independent monitor to oversee Daimler's compliance with anti-bribery laws.

The settlement is the latest example of a widening crackdown by the U.S. government on alleged violators of U.S. anti-bribery laws and represents one of the most wide-ranging cases brought so far against a foreign corporation.

U.S. District Judge Richard Leon approved the plea agreement and settlement, calling it a "just resolution" and said that the company was taking the right steps to solve the problems of the past.

In the SEC case, Daimler was accused of making some $56 million in bribes related to more than 200 transactions in 22 countries that earned the company $1.9 billion in revenue and at least $91.4 million in allegedly illegal profits.

The alleged bribes were frequently made by over-invoicing customers and paying the excess back to top government officials or their proxies, according to the charges.

"Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies saw foreign bribery as a way of doing business," said Mythili Raman, a principal deputy in the Justice Department's criminal division.

The alleged bribes also took the form of luxury European vacations, armored Mercedes vehicles for high-ranking government officials and a birthday gift to a senior Turkmenistan official including a golden box and 10,000 copies of the official's personal manifesto translated into German.

Further, Daimler was accused of violating the terms of the United Nations' Oil for Food Program with Iraq by including kickbacks 10 percent of the contract values to the Iraqi government. The SEC said the company earned more than $4 million from the sale of vehicles and spare parts.

"We have learned a lot from past experience," Dieter Zetsche, chairman of Daimler's board, said in a statement. "Today, we are a better and stronger company, and we will continue to do everything we can to maintain the highest compliance standards."

The case emerged after David Bazzetta, an auditor at DaimlerChrysler Corp, filed a whistleblower complaint.

Bazzetta alleged that he learned in a July 2001 corporate audit executive committee meeting in Stuttgart that business units "continued to maintain secret bank accounts to bribe foreign government officials," though the company know the practice violated U.S. laws.

Daimler sold its Chrysler business to private equity firm Cerberus Capital Management LP in 2007. Chrysler is now controlled by Fiat SpA.

The primary case is USA v. Daimler AG, U.S. District Court for the District of Columbia, No. 10-00063.

(Additional reporting by Dan Margolies; Editing by Bernard Orr and Tim Dobbyn)

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With acknowledgements to Jeremy Pelofsky and Reuters.