Israeli billionaire Beny Steinmetz and two associates are facing criminal charges in Switzerland for allegedly paying bribes to win mining licences in Guinea between 2005 and 2010.
The Geneva public prosecutor said in a statement Monday the defendants are charged with the criminal offenses of “foreign bribery and forgery.”
The prosecutor, Claudio Mascotto, said Steinmetz and the others “promised in 2005 and then paid or had bribes paid to one of the wives of former Guinean President Lansana Conte” to win mining rights for Beny Steinmetz Group Resources or BSGR.
Some of the $10 million in alleged bribe money was transferred through Geneva when Steinmetz was living there, the prosecutor said.
The other two defendants weren’t named.
BSGR has always denied wrongdoing in Guinea.
Steinmetz’s lawyer in Geneva, Marc Bonnant, told the Financial Times this week that “Beny Steinmetz denies categorically any wrongdoings. He never paid a single cent to any president in Guinea or to any public agent in Guinea, neither did he ever give instructions for such monies to be paid.”
BSGR relinquished its rights to the Simandou iron ore project earlier this year as part of a legal settlement of claims by Guinea’s government.
The company filed for receivership in London in March 2018.
In April this year, BSGR’s joint venture partner in Simandou, Vale SA, won about $1.25 billion in an arbitration in London against BSGR.
Vale claimed it was damaged when Guinea revoked the Simandou concession in 2014 “after a finding that BSGR had obtained it through bribery . . . while finding that Vale did not participate in any way in that bribery.”
In the United States, a French citizen who once worked for BSGR was sentenced in 2014 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, the DOJ said.
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.
Steinmetz was detained in Israel in 2016 and again in 2017 for questioning in connection with the bribery allegations.
The Geneva prosecutor alleged that the three defendants “manufactured false contracts and false invoices to hide from the banks and the authorities” that BSGR and Steinmetz “financed the payment of bribes.”
The prosecutor is seeking prison terms of two to ten years.
No trial date has been set.
Here’s the Geneva public prosecutor’s August 12, 2019 statement, translated from French:
The public prosecutor filed an indictment against Beny STEINMETZ and two other defendants with the Criminal Court. It contains foreign bribery and forgery offenses in the context of mining licensing in the Republic of Guinea between 2005 and 2010.
Prosecutor Claudio MASCOTTO, in charge of the proceedings since it opened in 2013, has filed an indictment in the proceedings against Benjamin (Beny) STEINMETZ and two other defendants in the Criminal Court.
At the end of its investigation, which required intense cooperation with various foreign authorities, the Public Prosecutor accused the three defendants of having promised as early as 2005, then paid or had paid, bribes to one of the wives of former Guinean president Lansana CONTÉ with a view to ousting a competitor and then granting Beny Steinmetz Group Resources (BSGR) mining rights in the region of Simandou in the Republic of Guinea. In this respect, it retains the bribery of foreign public officials (article 322 of the Penal Code).
A significant part of the BSGR group’s business was conducted at the time from Geneva, where Beny STEINMETZ was also domiciled. The amount paid as bribes according to the indictment is approximately $ 10 million, some of which has been transacted through accounts in Switzerland.
The public prosecutor also accuses the three defendants of having manufactured false contracts and false invoices to hide from the banks and the authorities that BSGR and Beny STEINMETZ, respectively, financed the payment of bribes. In this respect, it retains the false in the titles (Article 251 of the Penal Code). For the record, the Criminal Court is competent when the Public Prosecutor intends to request a custodial sentence of 2 to 10 years.
Defendants benefit from the presumption of innocence.
No other comments will be made.
Richard L. Cassin is editor at large of the FCPA Blog.