Bobby Jay Elkin Jr., a former executive from tobacco company Dimon Inc, now called Alliance One International, pleaded guilty yesterday in federal court in Virginia to a one-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act.
Elkin, 50, of Washington, D.C., was Dimon’s country manager in Kyrgyzstan. He faces up to five years in prison and a $250,000 fine. No sentencing date has been set.
The DOJ said Elkin paid bribes of more than $3 million to foreign government officials in Kyrgyzstan from 1996 through 2004 to win business for Dimon. He made cash payments to officials of the Kyrgyz tobacco authority, part of the government, to obtain export licenses and gain access to government-owned tobacco processing facilities. He also bribed local government officials to obtain permission to purchase tobacco from local growers, and to the Kyrgyz Tax Inspection Police to avoid tax inspections and penalties.
In April, the SEC brought a civil enforcement action against Elkin and three other former employees of Dimon. It charged them with violating the anti-bribery provisions of the Foreign Corrupt Practices Act and aiding and abetting violations. The defendants agreed to settle the charges.
According to the SEC’s civil complaint, Dimon was subjected to continuous audits by Kyrgyz tax officials. Some Dimon personnel devoted most of their work hours to answering questions from the tax inspectors. As soon as one audit finished, another would begin. The inspectors were never satisfied. Because Dimon once “failed to submit two reports to the tax office,” they imposed a fine of about $171,741 and threatened to seize its bank accounts and tobacco inventory. The tax inspectors later offered to reduce the penalties in exchange for Dimon’s cash payment.
Separately, the SEC said from 2000 to 2003, Dimon paid bribes to officials of the government-controlled Thailand Tobacco Monopoly.
Elkin wasn’t penalized in the SEC civil action. He and the other defendants (two of whom paid penalties of $40,000) consented to the entry of final judgments permanently enjoining them from violating the anti-bribery provisions of the FCPA (Section 30A of the Securities Exchange Act of 1934) and aiding and abetting violations of Sections 13(b)(2)(A) and 13(b)(2)(B).
Alliance One International, Inc. was formed in May 2005 — after the FCPA violations occurred — with the merger of Dimon and Standard Commercial Corporation. The company trades on the NYSE under the symbol AOI.
View the DOJ’s August 4, 2010 release here.
Download a copy of the plea agreement in U.S. v. Bobby Jay Elkin Jr. here.