Last week new FCPA Chief Patrick Stokes announced that the prosecution of individuals would be a priority. This point has become a recurring theme not just in FCPA cases where the international nature of the actions can pose difficulties, but in other actions.
Yesterday the DOJ announced a guilty plea by an individual in a criminal case arising out of an FCPA and money laundering investigation. French citizen Frederic Cilins pleaded guilty to one count of obstruction based on his activities in connection with the inquiry. U.S. v. Cilins (S.D.N.Y. March 10, 2014).
The investigation centered on possible FCPA and money laundering violations in connection with the awarding of a mining contract in Guinea. A mining company and its affiliates, for whom Mr. Cilins worked, sought to secure the contract. A now deceased government official had the authority to influence the award of the agreement.
To secure the contract the company and its affiliates offered millions of dollars to the wife of the government official. The money was to be distributed to her and ministers or senior officials of Guinea’s government whose authority might be necessary to secure the contract. Accordingly, the contracts provided that $2 million would be transferred to the wife’s company. The agreement also provided for an additional sum to be distributed to “persons of good will” who may have contributed to the granting of the mining rights to the company. In addition, the mining company agreed to give 5% of certain mining areas in Guinea to the official’s wife. Funds in furtherance of the scheme were transferred into the United States.
Mr. Cilins was charged with obstructing the investigation into this transaction. During monitored and recorded telephone calls, and in meetings, Mr. Cilins agreed to pay substantial sums of money to a witness to the bribery scheme in return for original documents which had been requested by the FBI and that were to be produced for the grand jury. Mr. Cilins planned to destroy the records. He also sought to have the witness execute an affidavit which contained false statements about the matters under investigation.
For more commentary on developing securities issues, visit SEC Actions, a blog by Thomas Gorman.
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