Bloomberg News

U.S. Seeks to Dismiss Convictions of Bribe Sting Defendants

March 27, 2012

U.S. prosecutors asked a judge to dismiss the convictions of three men who pleaded guilty in a foreign-bribery sting, a month after abandoning the case against 19 others charged in the same alleged conspiracy.

The Justice Department, in a filing today in U.S. District Court in Washington, said an earlier ruling by U.S. District Judge Richard Leon throwing out conspiracy charges against other defendants in the case should “apply equally” to Jonathan Spiller, Haim Geri and Daniel Alvirez.

“The government has concluded that further prosecution of the Gabon-related charges against defendants Spiller, Geri and Alvirez is unlikely to be successful,” prosecutors said in the filing.

Leon suggested at a hearing today that he would grant the request. He ordered the parties to submit additional filings on how to dispose of the guilty pleas.

“I’m pleased to see the government made the right decision,” he said.

At the request of prosecutors, Leon on Feb. 21 dismissed the indictment accusing 19 security-industry officials of planning to make payments to a federal agent posing as a representative of the West African nation of Gabon to secure a stake in a fake $15 million deal for weapons and security gear.

Guilty Pleas

Spiller, Geri and Alvirez, who were arrested with the others, pleaded guilty to the conspiracy and cooperated in the case. They had not been sentenced.

Alvirez also pleaded guilty to a conspiracy charge in another case. Prosecutors asked for that charge to be dismissed as well.

It was the first time the government used a sting operation involving undercover techniques to charge violations of the Foreign Corrupt Practices Act. The case was dropped after the government failed to win convictions of 10 people who went to trial.

“This outcome was the right thing to do by everyone’s standpoint,” Alvirez’s lawyer, Asa Hutchinson, said in an interview.

Geri’s lawyer, Eric Bruce of Kobre & Kim LLP, said in a statement that “it would have been a grave injustice” for his client “to be branded a felon as a result of this failed sting operation.”

‘Painful Episode’

Spiller, in a statement, said he was glad “this painful episode in my life is now over.”

The case, the biggest U.S. prosecution of individuals accused of foreign bribery, stemmed from a three-year investigation involving an informant who had pleaded guilty in an earlier bribery case. Investigators recorded phone calls and videotaped meetings with Federal Bureau of Investigation agents posing as representatives of Gabon, sub-Saharan Africa’s fifth- biggest oil producer.

The government said the defendants agreed to pay a $3 million commission for the business, half of which they were told would be paid to the country’s defense minister.

The government’s case was put together through Richard Bistrong, a former executive from Armor Holdings Inc. He pleaded guilty in 2010 to bribing officials of the United Nations and the Netherlands to obtain contracts for body armor and pepper spray, according to court papers. He has yet to be sentenced.

Recorded Meetings

Bistrong identified possible targets for the government, according to court papers. Working with the FBI, he recorded phone and in-person meetings with the defendants. He also introduced them to an FBI agent posing as a representative for Gabon’s defense minister.

Bistrong, in testimony given during the second trial, admitted to having a cocaine addiction and to filing false tax returns and other crimes.

Defense lawyers said the lead FBI agent shared cigars, gifts and meals with Bistrong, compromising the investigation. The relationship was documented in text messages and e-mails shown to the jury.

During today’s hearing, Leon said the government had until April 26 to decide whether to make additional cases using Bistrong. Bistrong, who faces as long as five years in prison, should be sentenced this summer, he said.

“He’s had a lot of time out there making lots of money with the government’s permission,” Leon said. “The time has come, I think. He has to pay his debt to society for what he’s done.”

The case is U.S. v. Goncalves, 09-cr-00335, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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