First Large-Scale FCPA-Related FBI Sting
From the Justice Department’s January 19, 2010 release:
WASHINGTON – Twenty-two executives and employees of companies in the military and law enforcement products industry have been indicted for engaging in schemes to bribe foreign government officials to obtain and retain business.
Twenty-one defendants were arrested in Las Vegas yesterday. One defendant was arrested in Miami. The indictments stem from an FBI undercover operation that focused on allegations of foreign bribery in the military and law enforcement products industry.
The 16 indictments unsealed today represent the largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the Foreign Corrupt Practices Act (FCPA), a law that prohibits U.S. persons and companies, and foreign persons and companies acting in the United States, from bribing foreign government officials for the purpose of obtaining or retaining business.
The indictments unsealed today were returned on Dec. 11, 2009, by a grand jury in Washington, D.C.
In connection with these indictments, approximately 150 FBI agents executed 14 search warrants in locations across the country, including Bull Shoals, Ark.; San Francisco; Miami; Ponte Vedra Beach, Fla.; Sarasota, Fla.; St. Petersburg, Fla.; Sunrise, Fla.; University Park, Fla.; Decatur, Ga.; Stearns, Ky.; Upper Darby, Penn.; and Woodbridge, Va. Additionally, the United Kingdom’s City of London Police executed seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments.
“This ongoing investigation is the first large-scale use of undercover law enforcement techniques to uncover FCPA violations and the largest action ever undertaken by the Justice Department against individuals for FCPA violations,” said Assistant Attorney General Lanny A. Breuer. “The fight to erase foreign bribery from the corporate playbook 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.”
The indictments allege that the defendants engaged in a scheme to pay bribes to the minister of defense for a country in Africa. In fact, the scheme was part of the undercover operation, with no actual involvement from any minister of defense. As part of the undercover operation, the defendants allegedly agreed to pay a 20 percent “commission” to a sales agent who the defendants believed represented the minister of defense for a country in Africa in order to win a portion of a $15 million deal to outfit the country’s presidential guard. In reality, the “sales agent” was an undercover FBI agent.
The defendants were told that half of that “commission” would be paid directly to the minister of defense. The defendants allegedly agreed to create two price quotations in connection with the deals, with one quote representing the true cost of the goods and the second quote representing the true cost, plus the 20 percent “commission.” The defendants also allegedly agreed to engage in a small “test” deal to show the minister of defense that he would personally receive the 10 percent bribe.
The indictments charge the following executives and employees of the various companies in the military and law enforcement product industries:
• Daniel Alvirez, 32, and Lee Allen Tolleson, 25, the president and director of acquisitions and logistics at ALS Technologies Inc., a company in Bull Shoals, Ark., that manufactures and sells law enforcement and military equipment;
• Helmie Ashiblie, 44, the vice president and founder of a company in Woodbridge, Va., that supplies tactical bags and other security-related articles for law enforcement agencies and governments worldwide;
• Andrew Bigelow, 40, the managing partner and director of government programs for a Sarasota, Fla., company that sells machine guns, grenade launchers and other small arms and accessories;
• R. Patrick Caldwell, 61, and Stephen Gerard Giordanella, 50, the current and former chief executive officers of Protective Products of America Inc, Sunrise, Fla., a company that designs and manufactures concealable and tactical body armor;
• Yochanan R. Cohen, a/k/a Yochi Cohen, 47, the chief executive officer of a San Francisco company that manufactures security equipment, including body armor and ballistic plates;
• Haim Geri, 50, the president of a North Miami Beach, Fla., company that serves as a sales agent for companies in the law enforcement and military products industries;
• Amaro Goncalves, 49, the vice president of sales for Smith & Wesson Holding Corp, Springfield, Mass., a company that designs and manufactures firearms, firearm safety/security products, rifles, firearms systems and accessories;
• John Gregory Godsey, a/k/a Greg Godsey, 37, and Mark Frederick Morales, 37, the owner and agent of a Decatur, Ga., company that sells ammunition and other law enforcement and military equipment;
• Saul Mishkin, 38, the owner and chief executive officer of an Aventura, Fla., company that sells law enforcement and military equipment;
• John M. Mushriqui, 28, and Jeana Mushriqui, 30, the director of international development and general counsel/U.S. manager of an Upper Darby, Penn., company that manufactures and exports bulletproof vests and other law enforcement and military equipment;
• David R. Painter, 56, and Lee M. Wares, 43, the chairman and director of a United Kingdom company that markets armored vehicles;
• Pankesh Patel, 43, the managing director of a United Kingdom company that acts as sales agent for companies in the law enforcement and military products industries;
• Ofer Paz, 50, the president and chief executive officer of an Israeli company that acts as sales agent for companies in the law enforcement and military products industries;
• Jonathan M. Spiller, 58, the owner and president of a Ponte Vedra Beach, Fla., company that markets and sells law enforcement and military equipment;
• Israel Weisler, a/k/a Wayne Weisler, 63, and Michael Sachs, 66, owners and co-chief executive officers of a Stearns, Ky., company that designs, manufactures and sells armor products, including body armor;
• John Benson Wier III, 46, the president of a St. Petersburg, Fla., company that sells tactical and ballistic equipment.
All of the defendants except Giordanella were arrested yesterday by FBI agents in Las Vegas. Giordanella was arrested in Miami, also by FBI agents.
Each of the indictments allege that the defendants conspired to violate the FCPA, conspired to engage in money laundering, and engaged in substantive violations of the FCPA. The indictments also seek criminal forfeiture of the defendants’ ill gotten gains.
The maximum prison sentence for the conspiracy count and for each FCPA count is five years. The maximum sentence for the money laundering conspiracy charge is 20 years in prison.
The DOJ’s release is here.
The indictments can be downloaded from the links below:
- Daniel Alvirez And Lee Allen Tolleson – Indictment
- Helmie Ashiblie – Indictment
- Ofer Paz – Indictment
- Andrew Bigelow Indictment
- R. Patrick Caldwell And Stephen Gerard Giordanella – Indictment
- Haim Geri Indictment
- Saul Mishkin – Indictment
- John M. Mushriqui And Jeana Mushriqui – Indictment
- Jonathan M. Spiller – Indictment
- John Benson Wier III – Indictment
- Amaro Goncalves – Indictment
- Pankesh Patel Indictment
- John Gregory Godsey Indictment
- David R. Painter and Lee M. Wares – Indictment
- Yochanan R.Cohen Indictment
- Israel Weisler – Indictment