Largest Investigation/Prosecution In History Of DOJ’s Enforcement Of Foreign Corrupt Practices Act Announced Today

Twenty two executives and employees of companies in the military and law enforcement products industry have been indicted for engaging in schemes to bribe foreign government officials to obtain and retain business, the Department of Justice announced today. The indictments stem from an FBI undercover operation that focused on allegations of foreign bribery in the military and law enforcement products industry. According to the government, this is the first large-scale use of undercover law enforcement techniques to uncover alleged FCPA violations.

The indictments unsealed today represent the largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the Foreign Corrupt Practices Act (“FCPA”). In connection with these indictments, approximately 150 FBI agents executed 14 search warrants in locations across the country, including Bull Shoals, Ark.; San Francisco; Miami; Ponte Vedra Beach, Fla.; Sarasota, Fla.; St. Petersburg, Fla.; Sunrise, Fla.; University Park, Fla.; Decatur, Ga.; Stearns, Ky.; Upper Darby, Penn.; and Woodbridge, Va. Additionally, the United Kingdom’s City of London Police executed seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments.

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’s 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.