FBI Sting at SHOT Show
January 20th, 2010 by Syd
An executive for Smith & Wesson Holding Corp (SWHC.O) and 21 others have been charged with violating federal bribery laws involving the sale of weapons and protective gear, the U.S. Justice Department said on Tuesday.
The indictments accused the individuals, including Smith & Wesson Vice President for Sales Amaro Goncalves, with violating the Foreign Corrupt Practices Act, or FCPA, and conspiracy to commit money laundering involving the sale of items including guns and body armor.
The FCPA prohibits the payment of bribes to foreign officials in order to secure business contracts.
The Federal Bureau of Investigation set up sting operations that ensnared the 22 individuals on charges that they tried to bribe a purported African defense minister to win contracts.
Twenty-one of the men were arrested in Las Vegas, where they were attending the SHOT Show, a large shooting-sports and hunting convention. The 22nd defendant was arrested in Miami….
…Among those charged was the chief executive of Protective Products of America Inc (PPA.TO), R. Patrick Caldwell, who previously worked for the U.S. Secret Service for 27 years and was in charge of the division for the vice president’s protection….
…As part of the FBI sting operation, an unidentified business associate who was a former executive for an arms manufacturer arranged a meeting between the arms sales representatives and undercover FBI agents who posed as representatives of an African country’s minister of defense.
The agents told the sales representatives that in order to win a contract, they had to add a 20 percent "commission" to price quotes, half of which would go to the purported minister of defense and the rest would be split between the others.
In the case of the Smith & Wesson executive, Goncalves gave price quotes for two sales, a small one of 25 guns and a larger one with 1,800 pistols. He gave two price quotes for the transactions, including one that had its price inflated by 20 percent, the Justice Department said.
The two-and-a-half-year-long investigation involved 250 FBI agents, according to Mark Mendelsohn, deputy chief of the Justice Department’s fraud division. In connection with the indictments, 150 agents executed 14 search warrants across the country and British police executed another seven, Justice Department officials said.
Three of the defendants worked for unnamed British companies; another worked for an unnamed Israeli company, according to the indictments. The defendants sought to obtain contracts for the sale of products ranging from grenade and tear gas launchers to pistols, ammunition and explosive detection kits….
Source: Reuters
I have always objected to this “sting” business. If law enforcement entices a person into doing something or conspiring to do something where otherwise there is no violation of the law, is this really a crime? Should not law enforcement be held equally culpable as part of the conspiracy? Especially in a case like this, where the violation is highly technical and the targets of the sting might not even realize they were in violation, I don’t think this is a legitimate method of law enforcement. Maybe it could be rationalized to capture a known terrorist or high level drug trafficker, but this case stinks.
Not surprising if you consider who we have elected into office. Not coming after the guns we own, but they’ll do everything they can to keep us from buying more and obtaining ammunition to use in them.
Bob, the investigation took 2 and a half years. Not Barry’s fault.
I’m not sure I feel as strongly as Syd on this, though I do see the point. LEOs typically don’t set up stings out of the blue, they generally have an idea that wrong-doing is happening. Of course I’m giving them the benefit of the doubt, perhaps there is a conspiracy to trap people in crimes and incarcerate them?
My brother does business in Africa and *everything* has a bribe attached. He is a 100% legit (non-firearms related) business, but as soon as does business in Africa, he knows that every step will require a bribe to some official or another. You can’t even clear customs in Africa without offering a bribe! That’s just a fact of life in Africa (and many other parts of the world).
The fact that “The agents told the sales representatives that in order to win a contract, they had to add a 20 percent “commission” to price quotes, half of which would go to the purported minister of defense and the rest would be split between the others.”
Key words: “The agents told the sales reps” they concocted this deal, it was thought up by the sales reps, that’s entrapment!
Good job FBI I’d say.
When it comes to public/government contracts, bribes play a major role.
That’s why in so many instances, your tax money end up paying more for an inferior product.
Hang them I’d say. Let them all be scared. Maybe then, our tax money will go for products and services that deserve the price.
I’ve got to agree with “John H.” Just about any bid on a third world government contract , from weapons to food for starving masses, involves payola to one greasy politician/beaurocrat or another. I was stationed overseas for most of my 21 (plus) years in the military, and the only country where I didn’t see it take place was Japan.
Third-world corruption is an institution unto itself. (i.e. Ugandan Department of Government Corruption… it’s right down the hall from the Department of Redundancy Department). It’s been that way for years, and our government willingly played along during the Cold War when we were trying to out-manuever the Ruskies for influence/world dominance no matter how corrupt or repressive a particular regime might be.
Now our government is against it when it has nothing to gain? I’m not surprised, just disappointed that our government (regardless of who is in power) talks two different stories, depending on which one of its faces it wants to display to the public.
FBI Sting at SHOT Show, Foreign Corrupt Practices Act
It is truly pitiful that the FBI would waste time and resources on this sort of thing. Especially when targeting US citizens. There seems to be a difference of opinion on the definition of commission and bribery.
(Source) Merriam-Webster
Commission: a fee paid to an agent or employee for transacting a piece of business or performing a service; especially: a percentage of the money received from a total paid to the agent responsible for the business.
Bribery: the act or practice of giving or taking a bribe.
By giving bribes it perpetuates the corrupt system. If 3rd world countries want a product, let them buy it at the same price everyone else pays.
Once the system of bribery starts, then everyone has to do it. Can you imagine having to pay a bribe to the door-greeter at Walmart just to get in, then another bribe to the cashier, etc.?
This isn’t entrapment, is an offer. One that should have been refused. “Sorry, we don’t deal in paying bribes.” Then the people could have walked away.
If someone offers you drugs, and you accept, is that entrapment?
“Do the right thing every time.” - U.S. Navy Capt.
Seems to me that if the African Official had set up a Pac fund like our beloved congress then it moves from bribe to donation. This is a gross waste of money and time. 150 agents and 2.5 years. At a lowball guess of $40,00 a year in salary for FBI this thing has cost the taxpayers 15 million dollars in wages alone. For 22 arrest?? What gives. Our government is out of control and 15 million (low end) is alot of money that we could use for much more productive endevors. Spend 15 million on education instead of targeting the firearms industry.