Cilins jailed two years for obstructing FCPA mining investigation
Saturday, July 26, 2014 at 5:08AM
Richard L. Cassin in BSG Resources, Beny Steinmetz, Frederic Cilins, Guinea, Lansana Conte, Mamadie Toure, Simandou, Vale, William Pauley, Zogota

A French citizen who used to work for mining giant BSG Resources was sentenced Friday to two years in prison for obstructing an investigation into bribery allegations.

Frederic Cilins, 51, faced up to five years in prison after pleading guilty in March in federal court in New York.

The DOJ said he tried to obstruct an ongoing federal grand jury investigation concerning potential violations of the Foreign Corrupt Practices Act and money laundering laws.

Investigators wanted to know if BSG, controlled by Israeli billionaire Beny Steinmetz, paid bribes to win mining concessions in the Simandou region of the Republic of Guinea, located in West Africa.

Cilins was arrested in Jacksonville, Florida in April last year.

The DOJ had asked U.S. District Judge William Pauley to sentence him to three years in prison.

BSG Resouces has denied any wrongdoing.

In April this year, a Guinea government inquiry concluded that BSG obtained concessions to the Simandou and Zogota mining areas through alleged corrupt practices.

Based on the findings, Guinea revoked mining licenses for iron ore concessions held by BSG and a joint venture partner, Brazilian miner Vale SA.

Vale hasn't been implicated in the alleged bribery scheme.

In a statement in April, Vale said it "unequivocally condemns the use of corrupt practices, reiterates its commitment to transparent corporate governance and is actively considering its legal rights and options."

BSG Resources has accused Guinea of wrongfully terminating the mining concession and has sought arbitration at the International Center for Settlement of Investment Disputes.

Cilins was heard in recorded phone calls and meetings agreeing to bribe Mamadie Toure, a widow of former Guinea President Lansana Conte, so she would give him documents to be destroyed.

"Cilins knew [the documents] had been requested by the FBI and needed to be produced before a federal grand jury," the DOJ said.

The documents included a contract stipulating that $2 million was to be transferred to Toure's company. The contract also gave her five percent of the ownership in the mining concession areas in Guinea, the DOJ said.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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