Obstruction charges in FCPA mining investigation
Monday, April 15, 2013 at 8:22PM
Richard L. Cassin in BSG Resources, Beny Steinmetz, Control Components Inc., Frederic Cilins, Grand Jury, Guinea, Hong Rose Carson, Mythili Raman, Obstruction, money laundering

The DOJ said Monday a French citizen has been arrested and charged with trying to obstruct a federal investigation into whether a mining company paid bribes to win mining rights in the Republic of Guinea.

Frederic Cilins, 50, was 'charged with scheming to destroy documents and induce a witness to give false testimony to a grand jury investigating potential violations of the Foreign Corrupt Practices Act,' according to Acting Assistant Attorney General Mythili Raman.

Cilins was arrested in Jacksonville, Florida on Sunday, the DOJ said.

He work for Israeli billionaire Beny Steinmetz' operations in Guinea, according to Reuters.

'BSG Resources, the mining arm of Steinmetz' conglomerate, is currently battling the African nation over the right to mine one of the world's largest untapped iron-ore deposits, known as Simandou. It has repeatedly denied Guinean government allegations that it paid bribes to the country's former ruler to obtain the huge concession,' Reuters said.

Cilins was charged Monday in a criminal complaint filed in the Southern District of New York.

The DOJ allegations included tampering with a witness, victim or informant, obstructing a criminal investigation, and destroying, altering or falsifying records in a federal investigation.

Obstruction is punishable by up to five years in prison, and the tampering and record-destruction charges each carry a maximum penalty of 20 years in prison.

Cilins appeared in federal court in Florida and is being held 'pending a detention hearing scheduled for April 18,' the DOJ said.

Obstruction charges were first used in an FCPA case two years ago against defendant Hong 'Rose' Carson of Control Components Inc.

The DOJ alleged that she destroyed company documents on the way to an interview with outside lawyers that was part of the company's internal investigation.

The DOJ eventually dropped the obstruction charge against her.

She later pleaded guilty to one FCPA count and was sentenced to six months home confinement.

According to the complaint against Cilins, he attempted to obstruct an ongoing federal grand jury investigation concerning potential violations of the Foreign Corrupt Practices Act and money laundering laws. 

The DOJ said a federal grand jury is investigating whether the mining company Cilins works for 'transferred into the United States funds in furtherance of a scheme to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region' in West Africa.

The DOJ said,

During monitored and recorded phone calls and face-to-face meetings, Cilins allegedly agreed to pay substantial sums of money to induce a witness to the bribery scheme to turn over documents to Cilins for destruction, which Cilins knew had been requested by the FBI and needed to be produced before a federal grand jury. The complaint also alleges that Cilins sought to induce the witness to sign an affidavit containing numerous false statements regarding matters under investigation by the grand jury.

Cilins allegedly tried to destroy original contracts between the mining company and the former wife of a now-deceased Guinean government official who was able to influence the award of mining concessions, the DOJ said.

The alleged bribery scheme involved as much as $12 million dollars, according to the complaint.

As the DOJ says, a complaint is merely an accusation and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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