Thursday, January 21, 2010

FBI arrests 21 In Las Vegas in foreign bribery sting

WASHINGTON, Jan 19 (Reuters) - U.S. authorities accused 22 people, including an executive for Smith & Wesson Holding Corp (SWHC.O), with violating federal bribery laws involving the sale of various arms, the U.S. Justice Department said on Tuesday.

The indictments charged the individuals, including Smith & Wesson Vice President for Sales Amaro Goncalves, with violating the Foreign Corrupt Practices Act and conspiracy to commit money laundering involving the sale of items including guns and body armor.

Also charged was the chief executive of Protective Products of America Inc (PPA.TO), R. Patrick Caldwell, who previously worked for the U.S. Secret Service for 27 years and was the special agent in charge of the division for the vice president's protection.

That company filed for bankruptcy protection last week and sought approval to be acquired by an affiliate of the private investment firm Sun Capital Partners Inc.

The indictments, filed in December, were unsealed by a U.S. judge on Tuesday and follow undercover operations last year. The individuals were arrested on Monday in Las Vegas and Miami.

In the case involving Goncalves, an unidentified business associate who was a former executive for an arms manufacturer arranged a meeting between Goncalves and two undercover FBI agents who posed as representatives of an unnamed African country's minister of defense, the indictment stated.

The agents told Goncalves that in order to win a contract for the sale of guns he would have to add a 20 percent "commission" to price quotes, half of which would go to the purported minister of defense and the rest would be split between the others, according to the indictment.

Goncalves provided price quotes for two sales, a small one of 25 guns and a larger one with 1,800 pistols. He gave two price quotes for the transactions, including one that had its price inflated by 20 percent, the indictment said. (Reporting by Dan Margolies and Jeremy Pelofsky, editing by Gerald E. McCormick)

The FBI arrested 21 people Monday in Las Vegas in what is being described as the largest single investigation and prosecution against individuals in the history of the Justice Department's enforcement of the Foreign Corrupt Practices Act.

Those individuals and another person arrested in Miami are executives and employees of military and law enforcement products companies who were indicted for engaging in schemes to bribe foreign government officials to obtain and retain business, the Justice Department announced today.

In connection with the FBI's undercover operation, 16 indictments were unsealed today. The indictments were returned on Dec. 11 by a grand jury in Washington.

All 21 of the individuals arrested in Las Vegas had been attending the 2010 Shooting, Hunting, Outdoor Trade Show and Conference, which runs from today through Friday at the Sands Expo & Convention Center. All were arrested off-site at an undisclosed location in the city, federal authorities said at a press conference held in Washington.

The investigation involved roughly 150 FBI agents who executed search warrants throughout the country. London police also assisted in the investigation.

Those who were indicted and the location of their companies included Daniel Alvirez and Lee Allen Tolleson, Bull Shoals, Ark., Helmie Ashiblie, Woodbridge, Va., Andrew Bigelow, Sarasota, Fla., R. Patrick Caldwell and Stephen Gerard Giordanella, Sunrise, Fla., Yochanan Cohen, San Francisco, Haim Geri, North Miami Beach, Fla., Amaro Goncalves, Springfield, Mass., John Gregory Godsey and Mark Frederick Morales, Decatur, Ga., Saul Mishkin, Aventura, Fla., John and Jeana Mushriqui, Upper Darby, Pa., David Painter and Lee Wares, United Kingdom, Pankesh Patel, United Kingdom, Ofer Paz, Israel, Israel Weisler and Michael Sachs, Stearns, Ky., and John Benson Wier III, St. Petersburg, Fla.

The maximum prison sentence for the conspiracy count and for each FCPA count is five years. The maximum sentence for the money laundering conspiracy charge is 20 years in prison.

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