Two More FCPA Guilty Pleas

Two More FCPA Guilty Pleas

DOJ continues to usher in a "new era" of FCPA enforcement as Assistant AG Lanny Breuer termed it in a recent speech, obtaining two more guilty pleas at the end of last week. Once evolved out of the on-going prosecutions relating to Control Components, Inc., a manufacturer of service control valves for use in nuclear, oil and gas, and power generation industries worldwide. The other stems from the so-called "shot-show" cases, the indictments stemming from the huge FCPA sting operation.

Flavio Ricotti, a citizen of Italy and the former vice president of sales for CCI pleaded guilty to a one count superseding information charging him with conspiring to make a corrupt payments to foreign government officials, and officials of private companies in several countries in violation of the FCPA. Mr. Ricotti was initially indicted along with five other former CCI executives in a sixteen count indictment in 2009. That indictment also charges Stuart Carson, CCI's former president, his wife Hong Carson, the former director of sales for China and Taiwan, Paul Cosgrove, former director of worldwide sales, David Edmonds, former vice president of worldwide customer service and Han Yong Kim, former president of the Korean office for the company. The remaining defendants are scheduled to begin trial in October 2011.

Mr. Ricotti, arrested in Germany and extradited to the U.S., admitted conspiring with other CCI employees to offer a payment to an official of Saudi Aramco, a Saudi Arabian state-owned oil company in connection with efforts to obtain a valve contract. He also admitted conspiring with others in connection with making a payment to an employee of a private company so that the employee would assist in obtaining a valve contract in Quatar. During the bidding process Mr Rocitti learned that an employee of the private company would furnish confidential information about the bids of competitors and would exercise influence on behalf of the company to secure the contract. U.S. v. Rocotti (C.D. Ca.).

Previously, CCI and two other executives of the company pleaded guilty to FCPA charges. Mr. Ricotti is cooperating with the government.

In the shot-show cases Haim Geri pleaded guilty to a one count superseding indictment charging conspiracy to violate the FCPA. U.S. v. Geri, 09-cf-335 (D.D.C.). These cases stem from what has been called the largest FCPA sting operation in history.

In connection with his plea Mr. Geri admitted entering into an agreement to pay a 20% commission to a sales agent he understood to be a representative of Gabon's minister of defense. The bribe was intended to obtain a portion of a $15 million contract to outfit the presidential guard. In reality the agent was an undercover FBI agent. Under the sentencing guideline calculation in the plea agreement Mr. Geri would be sentenced to 18 -24 months. The calculation is not binding on the court.

Mr. Geri is the fourth person to plead guilty in this case. Previously Richard Bistrong pleaded guilty to conspiracy to violate the FCPA and other statutes, Daniel Alviri pleaded guilty to two counts of conspiracy to violate the FCPA and Jonathan Spiller pleaded guilty to one count of conspiracy to violate the FCPA.

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