Monday, July 28, 2014
Guinea mining FCPA bribery investigation nets first jail sentence
DOJ Press Release (Friday) and previous DOJ Press Release (March 10, 2014) excerpted below.
Frederic Cilins, a 51-year old French citizen, was sentenced today in the Southern District of New York to 24 months in prison for obstructing a federal criminal investigation into alleged bribes to obtain mining concessions in the Republic of Guinea. ... In addition to his sentence, he was ordered to pay a fine of $75,000 and forfeit $20,000.
According to court documents, Cilins obstructed an ongoing federal investigation concerning potential violations of the Foreign Corrupt Practices Act (FCPA) and other crimes [money laundering]. Federal law enforcement was investigating whether a particular mining company [BSG Resources] with which Cilins was affiliated paid bribes to officials of a former governmental regime in the Republic of Guinea to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region. (inserts added)
During monitored and recorded phone calls and face-to-face meetings, Cilins agreed to pay substantial sums of money to induce a witness to the alleged bribery scheme to leave the United States to avoid questioning by the FBI, as well as to give documents to Cilins for destruction that had been requested by the FBI as part of the investigation. Cilins also sought to induce the witness to sign an affidavit containing false statements regarding matters under investigation by the grand jury.
That witness was the former wife of a now-deceased Guinean government official who held an office in Guinea that allowed him to influence the award of mining concessions. Court documents allege that the documents Cilins sought to destroy included original copies of contracts between the mining company and its affiliates and the former wife of a now-deceased Guinean government official, who at the relevant time held an office in Guinea that allowed him to influence the award of mining concessions.
The contracts allegedly related to a scheme by which the mining company and its affiliates offered the wife of the Guinean official millions of dollars, which were to be distributed to the official’s wife as well as ministers or senior officials of Guinea’s government whose authority might be needed to secure the mining rights.
According to court documents, the official’s wife incorporated a company in 2008 that agreed to take all necessary steps to secure the valuable mining rights for the mining company’s subsidiary. That same contract stipulated that $2 million was to be transferred to the official’s wife’s company and an additional sum was to be “distributed among persons of good will who may have contributed to facilitating the granting of” the valuable mining rights.
According to the complaint, in 2008, the mining company and its affiliates also agreed to give 5 percent of its ownership of particular mining areas in Guinea to the official’s wife.
See: Beny Steinmetz associate jailed over African investigation obstruction
Prosecutors have said Cilins had a "very close personal relationship" with Steinmetz, Israel's wealthiest person, who controls BSGR.
According to the recordings, Cilins said that he was working on behalf of Steinmetz when he attempted to arrange destroy evidence of the alleged bribes.
See the Forbes list - Beny Steinmetz, #471 of the 500 richest persons in the world.
Steinmetz acquired the rights from the late dictator Lansana Conté for free, after Conté stripped it from Australian mining giant Rio Tinto.
See Reuters BSGR starts arbitration against Guinea over lost mining rights
BSG Resources (BSGR), the mining unit of Israeli billionaire Beny Steinmetz's business conglomerate, said on Wednesday it had sought arbitration over the government of Guinea's decision to revoke its mining rights in the country.
The company said it filed a notice of dispute at the International Centre for Settlement of Investment Disputes seeking the restitution of the mining titles as well as damages arising from the revocation of the rights.