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Italian Citizen Pleads Guilty

Former fugitive Flavio Ricotti pleaded guilty yesterday in federal court in Santa Ana, California to a single count of conspiracy to violate the Foreign Corrupt Practices Act and the Travel Act.

Ricotti, 51, of Bientina, Italy, was a vice president for sales of Control Components Inc. (CCI). He was arrested in February last year in Frankfurt, Germany and extradited to the United States.

He faces up to five years in prison.

In 2009, Ricotti and five other former executives of CCI were named in a 16-count indictment. Also charged were Stuart Carson, CCI’s former president, his wife Hong (Rose) Carson, the former director of sales for China and Taiwan, Paul Cosgrove, former director of worldwide sales, David Edmonds, CCI’s former vice president of worldwide customer service, and Han Yong Kim, the former president of CCI’s Korean office. Their trial is scheduled to start on October 4 this year.

As the DOJ says, an indictment is merely an accusation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Ricotti admitted conspiring with other CCI employees to bribe an official of Saudi Aramco, the Saudi Arabian state-owned oil company, and an employee of a private company in Qatar. The bribes were to help win contracts for CCI, which makes valves for the nuclear, oil and gas, and power industries. The conspiracy charge under the Travel Act related to the bribe to the employee at the private company.

Two other former CCI employees pleaded guilty in 2009 to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI.

Mario Covino, an Italian citizen, was CCI’s former director of worldwide factory sales. He pleaded guilty to one count of conspiracy to violate the FCPA. Covino admitted arranging bribes of about $1 million to officers and employees of several foreign state-owned companies.

Richard Morlok, CCI’s former finance director, pleaded guilty to one count of conspiracy to violate the FCPA and admitted arranging about $628,000 in bribes to officers and employees of several foreign state-owned companies.

Covino and Morlok are scheduled to be sentenced in February next year. They face up to five years in prison.

In July 2009, CCI pleaded guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act (15 U.S.C. §78dd-2) and the Travel Act (18 U.S. C. §1952). It admitted bribing foreign officials in a decade-long scheme to secure contracts in about 36 countries. CCI’s three-year plea agreement imposed a criminal fine of $18.2 million and required appointment of a compliance monitor and cooperation with the DOJ’s investigation.

CCI is owned by British-based IMI plc, which trades on the London Stock Exchange under the symbol IMI.L.

View the DOJ’s April 29, 2011 release here.

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