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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