The key intermediary identified as “Individual 1” in this week’s historic bribery indictment of 22 people from the military and police-equipment industry has been charged with conspiracy (18 U.S.C. § 371).
In a one-count criminal information filed in federal court in the District of Columbia, the DOJ accused Richard T. Bistrong of conspiring with others to violate the Foreign Corrupt Practices Act’s antibribery provisions, 15 U.S.C. §78dd-1, its books and records provisions, 15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(5) and 78ff(a), and the Commerce Department’s export license rules, 50 U.S.C. §§ 1701-1706 and 15 C.F.R. §§ 736.2, 764.2, and 774. The information was released on Friday.
Bistrong was a vice president for international sales at Armor Holdings, a former publicly traded military equipment manufacturer in Jacksonville, Florida. Amor became a subsidiary of BAE Systems after the British firm acquired it in 2007.
According to a report in the New York Times Friday by Diana Henriques, John Suttle, senior vice president for corporate communications at BAE’s U.S. unit, confirmed that Bistrong had worked at Armor Holdings but was fired before BAE’s acquisition. He said Armor had self-disclosed to the DOJ and SEC and that “all of these events occurred before BAE bought the company.”
The New York Times also said sources confirmed that Bistrong — or “Individual 1” as he’s referred to in the earlier indictments — introduced undercover FBI agents to senior executives in the arms and security-equipment business.
Tuesday’s indictment of 22 people, including four Israelis and three Britons, was the first big undercover sting used in connection with alleged violations of the Foreign Corrupt Practices Act. It was also the biggest mass indictment in FCPA history. An FBI undercover agent posed as a military-equipment buyer for an African country. He told the sellers they would have to pay 20% commissions to an African government official for the sales. “Individual 1,” according to the indictments, played a key role by introducing the undercover FBI agent to the various sellers.
In its charges against Bistrong, the DOJ alleged that from 2001 through 2006, he and others concealed about $4.4 million in payments to agents and other intermediaries who helped Armor Products obtain business from “foreign government customers” in Nigeria and the Netherlands. Payments for sales to the United Nations for its mission in Iraq were also involved.
The DOJ said in the information that an official of a “public international organization” is a “foreign official” under the FCPA. 15 U.S.C. §§ 78dd-l(f)(l)(A) and 78dd-l(f)(I)(B). The United Nations is a “public international organization;” therefore its offcials are “foreign officials” under the FCPA. 22 U.S.C. § 288; Exec. Order No. 9698, 11 Fed. Reg. 1809 (Feb. 20,1946).
The information also alleged that in March 2004, Bistrong and another employee authorized the export from the U.S. to the United Arab Emirates for further shipping to Iraq of vests and helmets “without obtaining a required license from the Commerce Department to do so.”
Download a copy of the information in U.S. v. Richard T. Bistrong here.
Special thanks to Marc Bohn in the District of Columbia for help with this post.