In what is to date the largest number of individuals netted in a single FCPA case, the US Department of Justice (DoJ) has arrested and charged 22 executives at military and law enforcement production companies with attempting to bribe foreign government officials to win business contracts.
The 22 executives, who hailed from different companies based in the US, UK, and Israel, were indicted at the conclusion of a joint undercover sting operation carried out in cooperation with the FBI. It marks the first time that the DoJ has made use of such a technique in going after US companies who bribe foreign officials, as well as being the largest single investigation and prosecution against individuals in the history of the department’s enforcement of the US Foreign Corrupt Practices Act (FCPA).
“This on-going investigation is the first large scale use of under-cover law enforcement techniques to uncover FCPA violations and the largest action ever undertaken by the DoJ against individuals for FCPA violations. The fight to erase foreign bribery from the corporate play book will not be won overnight, but these actions are a turning point. From now on, would be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent,” said Lanny Breuer, assistant attorney general of the DoJ’s criminal division.
According to the indictments, the accused allegedly engaged in schemes to pay bribes to the defence minister of an African nation. As part of the undercover operation, FBI agents posed as sales agents who were led to believe represented a minister of defence in a country in Africa. The executives are accused of allegedly agreeing to pay a 20 per cent commission to the sales agent, in what they believed would lead to the award of US$15 million contract to outfit the country’s presidential guard.
The accused executives, who are aged between 25 and 66 and hailed from a range of companies producing gear ranging from small arms, to ballistic vests and armoured vehicles, were told that half of this commission amount would be paid directly to the said defence minister. They also agreed to prepare price quotations in connection with the deal, one which represented the true cost of the contract, and another which included the extra 20 per cent kickback. The executives also allegedly agreed to do a small test deal to show the fictitious defence minister that he would receive the 10 per cent bribe.
They were arrested in Las Vegas and in Miami by FBI agents, and all were charged with conspiring to violate the FCPA, conspiring to engage in money laundering, and engaging in substantive violations of the FCPA. The indictments also sought to forfeit any illegal profits the company may have generate from bribery. If found guilty, the executives each face a maximum prison sentence of five years for both the conspiracy and FCPA counts, as well as 20 years for money laundering.
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