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Monday
Oct122015

Former IAP veep jailed four months for Kuwait bribes

A former vice president of defense contractor IAP Worldwide Service was sentenced in federal court in Virginia Friday to 120 days in prison.

James Michael Rama, 69, of Lynchburg, Virginia, pleaded guilty in June to one count of conspiracy to violate the anti-bribery provisions of the FCPA.

Privately held IAP resolved FCPA offenses in June by agreeing to pay a $7.1 million penalty for an alleged conspiracy to bribe Kuwaiti officials to win a contract. The company also entered into a non-prosecution agreement that required it to cooperate with the DOJ.

Rama had faced up to five years in prison on the FCPA conspiracy count.

IAP provides facility management services, contingency support, and technical services. Most of its customers are government entities. It's based in Cape Canaveral, Florida.

Rama filed for bankruptcy and "now works as a cashier and truck cleaner at a rental facility in Maryland, unable to provide for his legally-blind wife and two daughters, according to court documents," the Wall Street Journal said. "He has seen his earnings drop $350,000, according to the documents."

In 2004, Kuwait launched a project to develop nationwide surveillance capabilities through closed-circuit television.

IAP and Rama made a plan to make sure IAP would be the contractor selected for the project.

In February 2006, Rama and other IAP executives and senior employees set up a shell company called Ramaco to bid on the first phase project, the DOJ said. The plan involved concealing IAP’s role while Ramaco wrote  requirements for the remainder of the project that only IAP could fulfill.

Ramaco won a $4 million contract for the first phase of the work.

Rama and IAP agreed to divert half of the $4 million to a consultant who would bribe Kuwaiti officials for award of the next phase of the work.

Between September 2006 and March 2008, IAP and the co-conspirators paid the consultant almost $1.8 million, "understanding that some or all of the funds would be used to bribe Kuwaiti government officials," the DOJ said.

IAP's non-prosecution agreement with the DOJ required the company's continued cooperation. IAP also agreed to "review of its existing internal controls, policies and procedures, and make any necessary modifications to ensure . . . accurate record keeping and a rigorous anti-corruption compliance program."

The DOJ hasn't said whether it will charge other individuals in the case.

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