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Governmental Officials of Georgia Were Bribed for the Purchase of Weapon from Israel

14.05.2010
 By Christopher M. Matthews

Online magazine MAIN JUSTICE published scandalous article with the title “Superseding Indictment Clarifies Alleged FCPA Conspiracy”. The article is about the ongoing investigation in the USA on the corruptive facts discovered in the weapon-trafficking. MAIN JUSTICE reports that high-ranking officials of the Georgian government are also involved in this corruption. However, their names are not mentioned in the article. Humanrights.ge thinks it could be the main topic of the visit of the head of the US FBI in Georgia several days ago when he met the minister of the internal affairs of Georgia. Maybe, the detention of the former high-ranking official of the Defense Ministry of Georgia Gela Berdzenishvili is connected with this investigation as well. You can read the translation of the full article.

Superseding Indictment Clarifies Alleged FCPA Conspiracy

Federal prosecutors on Friday laid out an expanded view of the high-profile Foreign Corrupt Practices Act sting case that charged 22 officials of defense industry suppliers with attempted bribery.
Unidentified defendants and their lawyers leave a Feb. 17 status hearing regarding an alleged defense industry bribery conspiracy. (Stephanie Woodrow / Main Justice)
In a superseding indictment against defendant Daniel Alvirez filed in U.S. district court in Washington, D.C., the United States outlined evidence it says ties the 22 defendants together in a bribery conspiracy.

The indictment also introduces new allegations of a scheme to bribe defense ministry officials with the country of Georgia in early 2008, as the former Soviet republic prepared for war with Russia over disputed territory.

Alvirez, who worked for defense and law enforcement supplier E in Bull Shoals, Ark., has agreed to plead guilty, according to his attorney, Mike Volkov. As part of his plea deal, Alvirez will cooperate with the government to build its larger case, Volkov said.

The superseding indictment provides new details about an alleged conspiracy to pay bribes in connection with a purported $15 million deal to outfit the presidential guard of an unnamed African country, which Main Justice has learned was represented to be Gabon.

The U.S. alleges that Alvirez and a co-worker, defendant Lee Allen Tolleson, participated in meetings with a government cooperator who said he was brokering the deal with the African country. The cooperating witness has been identified in news reports and in a court hearing as Richard Bistrong, a former vice president for international sales at Florida-based Armor Holdings, now a subsidiary of BAE Systems.

Alvirez worked with Bistrong, who is described as “Individual 1″ in the indictment, to identify other companies and individuals to supply $15 million worth of goods to the Ministry of Defense of the African country, knowing that 20% of the deal – about $3 million – would be paid as a “commission” to be used for bribes, the government says.

Half of the $3 million was to be paid as a bribe to the minister of defense, while the other half would be split between “Individual 1″ and an agent of the unnamed African country, who in in reality was an undercover FBI agent, the indictment says.

Then, “Individual 1″ agreed to give Alvirez a cut of his portion of the bribe, and Alvirez agreed to share his payment with his co-worker, Tolleson, the indictment says. The other 20 defendants in the case are named as suppliers for the purported $15 million deal with the African country.

Alvirez’s company was to supply tear gas projectiles and launchers, the indictment says.

The FBI recorded a meeting of the alleged conspirators at the popular downtown Washington restaurant Clyde's. (Photo by Christopher M. Matthews/Main Justice)
Among the evidence the government says it collected were telephone conversations between Alvirez and Bistrong discussing the deal and the commissions. Alvirez and Tolleson also met with Bistrong and the undercover FBI agent on May 13, 2009 at the luxury Mandarin Oriental Hotel in Miami to discuss the deal, the indictment says. Defendants John Gregory Godsey, Mark Frederick Morales and Jonathan M. Spiller also participated in meetings in Miami in which the deal was discussed, the government alleges.

And, as Main Justice previously reported, the FBI recorded a meeting at Clyde’s Restaurant in downtown Washington, D.C., in which Alvirez, Tolleson and 15 other defendants attended what the government now describes as a “cocktail reception” in connection with the deal. Main Justice learned that the defendants toasted Bistrong at the party.

Georgian allegations

Separately, the indictment provides new allegations in which an unnamed sales agent in Israel for Alvirez’s company allegedly contacted him in February 2008 about purchasing 14 million rounds of   ammunition for the government of Georgia. Alvirez knew that the Israeli sales agent was paying bribes to government officials in Georgia to facilitate the ammunition contract, the indictment says.

The Israeli sales agent purchased the ammunition from an unnamed co-conspirator’s company for approximately $3.9 million, the government alleges. The Israeli agent then sold the ammunition to the government of Georgia for nearly $4.7 million, paying a $112,000 commission to Alvirez for facilitating the deal, the indictment says.

In July 2008, the Israeli sales agent, working with another unidentified “corrupt” Miami sales agent, sold to Georgia an additional 7.2 million rounds of ammunition purchased from the co-conspirator’s company, the indictment says. Alvirez allegedly received a $57,600 commission for his participation in that deal.

In August 2008, rising tensions between Russia and Georgia over disputed territory of South Ossetia broke out into armed conflict, sparking an international crisis. The United States, long an ally of Georgia President Mikheil Saakashvili, had worked to tamp down tensions, without success.

Russia bombed the Georgian Black Sea port of Poti and inflicted extensive damage to Georgian cities and infrastructure. North Atlantic Treaty Organization war ships were mobilized for what the western military alliance said was humanitarian assistance, an explanation the Russians rejected. The fighting ended after a few days, but Russia later recognized the South Ossetia and another disputed Georgian territory, Abkhazia, as independent states. The Georgian government passed a resolution declaring the territories to be Russian-occupied.

Throughout the conflict, companies in Israel supplied Georgia with military equipment and training, according to published reports.

In October 2008, the unnamed Miami sales agent contacted Alvirez to assist in finding a supplier to sell Meals, Ready to Eat (MREs) to Georgia, the indictment says. Alvirez received a $15,000 commission from the Miami sales agent for the deal, and Alvirez knew the agent had made “corrupt payments” to help obtain the MRE contract, the government alleges.

Building a Wider Case

Hank Bond Walther is the lead prosecutor in case. (Christopher M. Matthews / Main Justice)
Alvirez and Tolleson were originally charged with conspiracy to violate the FCPA on Dec. 11 in a sealed indictment. The cases’ other 20 defendants, from the U.S. and other countries, also were charged on that day in 15 separate indictments. The original indictments were unsealed in January, after the arrests of 21 of the 22 defendants in a dramatic round-up at a gun-show in Las Vegas.

In Las Vegas, the defendants were expecting to have a meeting with the defense minister of Gabon in which they would each receive 60 percent of the inflated sales prices of goods sold to Gabon in a “phase two” of the deal, according to the indictment and a person familiar with the case.

When the original indictments were unsealed, each was viewed as a separate case because they made no mention of a conspiracy among the defendants. Then, at an arraignment hearing on Feb. 3 in federal court in Washington, Justice Department prosecutors revealed they believed the defendants were part of one massive conspiracy. The revelation came as a shock to the defense counsel and to Judge Richard Leon, who is presiding over the cases.

At the time, defense attorneys questioned whether the government had enough evidence to charge a massive conspiracy. Main Justice learned that the key piece of evidence in the wide-ranging conspiracy was the secretly recorded meeting at the Washington restaurant Clyde’s, in which Bistrong and all of the defendants were present.

Volkov, the attorney for Alvirez, said he believes other defendants are likely to work out plea agreements as the government works to widen its net, possibly to go after other defense-industry companies.

“The government’s investigation is continuing — that is for sure,” Volkov told Main Justice. He said he wouldn’t be surprised if more people were indicted and the investigation widened to look at deals in other countries, from Latin America to the Middle East.

By e-mail, Volkov also defended his client, whom he portrayed as relatively inexperienced in international dealings. He said ALS Technologies retained Bistrong as a consultant and until then, ”ALS had no real involvement in the bribery culture.”

The superseding indictment calls for Alvirez to forfeit all funds gained through the deals

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