DOJ announces arrests of 22 in large FCPA sting operation

by Ben Vernia | January 19th, 2010

Although the Foreign Corrupt Practices Act is off-topic for this blog, readers may find today’s FCPA press release from DOJ an interesting example of the Criminal Division Fraud Section’s ambitions under the Attorney General Eric Holder and Criminal AAG Lanny Breuer.

Numerous companies’ employees fell for a DOJ sting operation, in which law enforcement played the role of a “sales agent” charging 20% for supposedly placing weapons-related contracts with an undisclosed African nation:

The indictments allege that the defendants engaged in a scheme to pay bribes to the minister of defense for a country in Africa. In fact, the scheme was part of the undercover operation, with no actual involvement from any minister of defense. As part of the undercover operation, the defendants allegedly agreed to pay a 20 percent “commission” to a sales agent who the defendants believed represented the minister of defense for a country in Africa in order to win a portion of a $15 million deal to outfit the country‚Äôs presidential guard. In reality, the “sales agent” was an undercover FBI agent. The defendants were told that half of that “commission” would be paid directly to the minister of defense. The defendants allegedly agreed to create two price quotations in connection with the deals, with one quote representing the true cost of the goods and the second quote representing the true cost, plus the 20 percent “commission.” The defendants also allegedly agreed to engage in a small “test” deal to show the minister of defense that he would personally receive the 10 percent bribe.

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