Is This The First Domino to Fall in FCPA Case? French Citizen Pleads Guilty to Obstruction in Foreign Bribery Case

A French citizen appeared in a Manhattan federal court on March 10, pleading guilty to obstructing a government investigation into bribes paid to secure mining rights in Guinea. Mr. Frédéric Cilins, a 51-year-old businessman, had been arrested during an FBI sting in Jacksonville, Florida last April. His recent guilty plea will supersede the not guilty plea he originally entered with the court.

Mr. Cilins was allegedly acting on behalf of Beny Steinmetz Group Resources (BSGR), a Guernsey-based energy company. BSGR was founded by one of the richest people in the world, Beny Steinmetz.

The question, of course, is whether this guilty plea will be the end of the case or simply the first step to indict others or the company itself.

Background

Mr. Cilins conducted business in the West African nation of Guinea between 2006 and 2010. During this time, Mr. Cilins had a business relationship with BSGR. BSGR was founded by Mr. Steinmetz, who has an estimated personal wealth of $6 billion, according to Forbes.

Mr. Cilins and his associates established Pentler Holdings in return for a 17.65% equity stake in BSGR Guinea Ltd. BVI in March of 2006.

Pentler Holdings used Mr. Cilins’ extensive Guinean business experience to secure lucrative mining contracts for BSGR in the nation’s Simandou region. Through Pentler Holdings, Mr. Cilins’ efforts seemed to have greatly advanced BSGR’s interests. By 2008, the Guinean government ordered the region’s most prominent mining concern, Rio Tinto, to give BSGR half of the region’s rich iron deposits.

Obtaining these mineral rights from Rio Tinto was a major coup. But was it the product of illegal bribes?

BSGR’s Response

 BSGR has not yet been charged with any wrongdoing and maintains that it never committed any illegal activity, though it has allegedly been investigated by the Department of Justice.

Nevertheless, in response to Mr. Cilins’ case, BSGR released a statement to the media. The statement said that before 2006, BSGR had no permanent operations in the nation Guinea and simply turned to Mr. Cilins and two of his associates to help them increase their presence there.

BSGR does not shy away from public controversy, accusing George Soros and “his various NGOs” of a “smear campaign.”

FCPA Investigation

Mr. Cilins’ indictment arose in connection with a government investigation under the FCPA which, of course, makes it unlawful for certain entities to make payments to foreign officials to assist in securing business.

The government apparently used wiretaps during the investigation, another example of the government using aggressive investigative techniques in white-collar cases.

During a government investigation into whether or not BSGR engaged in bribery to obtain and preserve its Simandou contracts, Mr. Cilins allegedly tried to keep evidence from coming before a grand jury.

In its criminal information, the government alleged that Mr. Cilins offered money to a cooperating witness to destroy documents. The government also alleged that Mr. Cilins asked the cooperating witness to provide him with documents that he planned to destroy himself.

The Guilty Plea

Speaking through a French interpreter at his hearing, Mr. Cilins told the court, “I offered money to a government witness to leave the U.S. to avoid questioning by the FBI.”

Mr. Cilins faces a maximum sentence of five years for his offense. However, the judge noted that he would likely receive between 37 and 46 months according to the sentencing guidelines, subject to deportation once his sentence has been served.

 

This entry was posted in FCPA, Plea Agreement and tagged . Bookmark the permalink.

One Response to Is This The First Domino to Fall in FCPA Case? French Citizen Pleads Guilty to Obstruction in Foreign Bribery Case

  1. Pingback: Where Are They Now? An Update on Past Posts | Grand Jury Target

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