By Nima Maghame
San Francisco-based High Com Security owner Yochanan Cohen was one of 22 CEOs and presidents of security companies that make everything from bullets to bullet-proof vests who were arrested by the Federal Bureau of Investigation under the Foreign Corrupt Practices Act for illegally bribing foreign officials to win weapon defense contracts.
“This ongoing investigation is the first large-scale use of undercover law enforcement techniques to uncover FCPA violations and the largest action ever undertaken by the Justice Department against individuals for FCPA violations,” said Assistant Attorney General Lanny A. Breuer. All except one of the 22 heads of companies from across the country were arrested together on Jan. 19 when they met in Las Vegas for the 2010 Shooting, Outdoors Trade Show convention. The remaining CEO was apprehended the same day in Miami.
The undercover operation was designed by the FBI, which set up a sales agent representing the defense ministry of an undisclosed African nation. The agent was set up to inquire about purchasing arms for the presidential guard with the intention of being bribed. Once both sides met, the agent invited the CEOs and presidents to the country's capital city.
Reportedly, the agreement was that the companies would pay a 20 percent commission for a slice of a $15 million dollar venture that the African nation would use to outfit the presidential guard. Then, 10 percent of the commission was to go to sales agent with the other 10 percent going to the African nation's defense ministry. The sales agent wined and dined the private business owners who then emailed the agent overpriced quotes for M4 carbines, body armor, and illegal purchasing agreements according to the indictment, and wired the bribe money to his overseas bank account. Dealings went so far that crates of weapons and armor were showing up in the African country.
In a FBI press release that came out shortly after the arrest, the bureau reported they had set up the operation after several undercover agents in the field had made allegations that foreign ministries were being bribed by the law enforcement products industry.
“Corrupt payments to foreign officials to obtain or retain business erode public confidence in our free market system and threaten to undermine foreign governments,” said U.S. Attorney Channing Phillips. “These indictments set forth serious allegations and reflect the Department's commitment to aggressively investigate and prosecute those who try to advance their businesses through foreign bribery.”
So far none of the indicted have any set trial date but the dependents will be heard by the federal court in Washington D.C.