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FCPA Blog Daily News

« Alcatel-Lucent Headed For Settlement | Main | Pride Discloses Possible Settlement »
Thursday
Feb182010

Mega-Bust Judge Doesn't See Grand Conspiracy

Photo by Willie LunchmeatThe U.S. district court judge overseeing the trial of the 22 defendants indicted in the shot show mega-bust said at a hearing Wednesday he doubts they were part of a single conspiracy, as the government has asserted.

Reuters quoted Judge Richard Leon as saying: "I read all 16 indictments and I didn't see it. I have zero sense that there was an omnibus grand conspiracy."

If the judge doesn't find evidence of a common conspiracy by the defendants, the government would be forced to try them separately. Prosecutors, however, said they are already talking with lawyers for some defendants about plea deals. "We're in discussions with a number of counsel right now about possible dispositions," the DOJ's Matthew Solomon said. "We don't think there are going to be 16 trials."

According to Reuters, the government's evidence includes "5,287 taped phone calls, more than 800 hours of video and audio recordings and 231 recordings of meetings between undercover agents and the defendants."

Among the defendants are Amaro Goncalves, 49, a vice president of gun-maker Smith & Wesson and Patrick Caldwell, 61, a former secret service agent and current CEO of body armor manufacturer Protective Products of America Inc.

Each of the 16 indictments allege that the defendants conspired to violate the Foreign Corrupt Practices Act, conspired to engage in money laundering, and committed substantive FCPA offenses. The indictments also seek criminal forfeiture of the defendants’ ill gotten gains.

Prosecutors allege that the defendants were all part of a common plot to pay bribes to the minister of defense of an African country. In fact, the scheme was part of the undercover sting with no actual involvement by a foreign official. The government alleges the defendants agreed to pay a 20 percent “commission” to a sales agent who the defendants believed represented the African defense minister. In reality, the “sales agent” was an undercover FBI agent.

The government's cooperating witness was Richard Bistrong. Identified in the indictments as “Individual 1,” he introduced the defendants to undercover FBI agents. Bistrong was himself indicted in a separate case in January. He was charged in federal court in the District of Columbia with conspiracy to violate the Foreign Corrupt Practices Act's antibribery provisions, 15 U.S.C. §78dd-1, its books and records provisions, 15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(5) and 78ff(a), and the Commerce Department's export license rules, 50 U.S.C. §§ 1701-1706 and 15 C.F.R. §§ 736.2, 764.2, and 774.

Bistrong was a vice president for international sales at Armor Holdings, a former publicly traded military equipment manufacturer in Jacksonville, Florida. Amor became a subsidiary of BAE Systems after the British firm acquired it in 2007.

In its charges against Bistrong, the DOJ alleged that from 2001 through 2006, he and others concealed about $4.4 million in payments to agents and other intermediaries who helped Armor Products obtain business from "foreign government customers" in Nigeria and the Netherlands. Payments for sales to the United Nations for its mission in Iraq were also involved.

See all our posts on the shot show mega-bust here.

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