The former Minister of Mines and Geology of the West African country of Guinea was arrested and charged Tuesday with laundering $8.5 million in bribes he allegedly took from a Chinese conglomerate in exchange for mining rights.
Mahmoud Thiam, 50, a U.S. citizen living in New York City, was charged with two counts of money laundering.
Thiam was arrested Tuesday morning. He appeared in the afternoon before a federal magistrate judge in New York.
Thiam was Guinea’s minister of mines from early 2009 until late 2010. He’s also a former UBS banker.
The DOJ alleged that in 2009 he went to Hong Kong and opened a bank account there to launder bribe money.
He allegedly used some of the money to buy a $3.75 million property in Dutchess County, New York and to pay for private schools for his children, according to the complaint.
Last month Thiam told Bloomberg in a phone interview that he had been offered a bribe by global mining giant Rio Tinto.
Thiam said Steven Din, formerly head of Rio Tinto’s Guinea operation, offered the bribe in early 2010 to win back control of half of the undeveloped Simandou project.
Bloomberg said “Din was attempting to regain control of the blocks from billionaire investor Beny Steinmetz’s BSG Resources.”
Din and Rio Tinto denied the allegations.
But Rio Tinto said in a U.S. securities filing in November that it suspended the chief executive of its energy and minerals division while it investigates more than $10.5 million paid to a consultant for the Simandou project.
This week BSG Resources sent a letter to Rio Tinto demanding damages for causing BSGR to lose the Simandou mining rights.
The letter referred to the Bloomberg story about Thiam.
BSGR said its damages could amount to billions of dollars.
In 2014, a French citizen who used to work for BSGR was sentenced to two years in prison for obstructing a U.S. investigation into bribery allegations involving Simandou.
Frederic Cilins pleaded guilty in federal court in New York.
He tried to obstruct an ongoing grand jury investigation into potential violations of the Foreign Corrupt Practices Act and money laundering laws.
Cilins was heard in recorded phone calls and meetings agreeing to bribe Mamadie Toure, a widow of former Guinea President Lansana Conte, so she would give him documents to be destroyed.
The DOJ said the documents included a contract stipulating that $2 million was to be transferred to Toure’s company. The contract also gave her five percent of the ownership in the mining concession areas in Guinea, the DOJ said.
BSGR has always denied any wrongdoing.
Tuesday’s complaint alleged that in 2009 and 2010, Thiam laundered $8.5 million in bribes he received from senior representatives of the Chinese conglomerate.
The DOJ didn’t name the Chinese company.
The DOJ said,
In exchange for the bribes, Thiam allegedly used his official position in the Guinean government to enable affiliates of the Chinese conglomerate to obtain exclusive and highly-valuable investment rights in a wide range of sectors of the Guinean economy, including near total control of Guinea’s valuable mining sector.
To move the bribes, the DOJ said, Thiam allegedly lied to U.S. banks so they wouldn’t know he was a foreign official or where the money came from.
Money laundering is punishable by up to 20 years in prison.
Richard L. Cassin is the publisher and editor of the FCPA Blog.