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Richard L. Cassin Publisher and Editor

Julie DiMauro Executive Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Elizabeth K. Spahn Contributing Editor

Eric Carlson Contributing Editor

Michael Kuria Contributing Editor

Thomas Fox Contributing Editor

Philip Fitzgerald Contributing Editor

Marc Alain Bohn Contributing Editor

Michael Scher Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

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Wednesday
Jan202010

Big Shot In Vegas

The Justice Department's Big Show: It arrested 21 of 22 defendants who were in Las Vegas for the firearms-related industry's biggest annual event, in the presence of 1,400 journalists from the U.S. and abroad.One stunning aspect of this week's giant FCPA bust was the DOJ's stage management. Defendants from three countries and five states were swept up at the same time, all but one in the same city. The feds were like an infantry waiting to see the whites of their eyes -- waiting, waiting, waiting -- until the defendants had walked into the trap. It was law enforcement as art, choreographed at the biggest law enforcement-related confab on the planet, in the presence of the world's media.

Twenty-one of the 22 defendants were arrested in Las Vegas. (One of them, Stephen Gerard Giordanella, was arrested in Miami.) None lived in Vegas; they were in town for the Shot Show.

The annual Shooting, Hunting & Outdoor Trade Show is a colossal event. Founded 32 years ago for the firearms, munitions and shooting-related industry, the general public isn't invited. It's for professionals only and draws around 60,000 people from all 50 states and 75 countries. They come to see the 1,800 exhibitors -- if you're not part of the Shot Show, you're not part of the industry. This year's venue at the Sands Expo & Convention Center covers 700,000 square feet.

The FCPA arrests were bound to receive maximum attention. They happened on the eve of the Shot Show's opening; some defendants were from well-known exhibitors. According to the Shot Show website, around 1,400 journalists would have been there -- flying in from all over the U.S. and beyond. The FCPA arrests gave them a special reward -- hard news to send back home.

*   *  *

The Shot Show, which runs through January 22nd, features appearances by most celebrities in the shooting-sports field -- Clint Smith from the Thunder Ranch shooting school, Tom Gresham from Gun Talk radio, and big game hunter Wayne Van Den Bergh, among others. 

Wider-known personalities are there too. Mixed martial arts champ Brock Lesnar is on the appearance list, along with baseball players Willie Robertson, Chipper Jones, Adam LaRoche, Matt Duff, Ryan Langerhans and Tombo Martin. One of the legendary Statler Brothers -- Jimmy Fortune -- is there. So is Kristy Lee Cook, a top ten American Idol finalist.

The best-known attendee this year may be Hollywood actor Steven Seagal. He's plugging his line of "Steven Seagal Tactical Gear" -- body armor, battle and sniper rifles, and other equipment for military and police. Here he is:

Wednesday
Jan202010

Report: Charges Against Thai Official In Green Case

The AP reports the indictment in LA of Juthamas Siriwan, the ex-governor of the Tourism Authority of Thailand, and her daughter, Jittisopa Siriwan, with conspiracy and eight other counts. They were named in the FCPA prosecution of Gerald and Patrcia Green.We haven't seen the indictment yet or read any news directly from the DOJ. But the Associated Press has reported that the Thai official named in the FCPA prosecution of Hollywood movie producers Gerald and Patricia Green has been indicted with her daughter "on charges that they accepted bribes from" the Greens in exchange for running the Bangkok International Film Festival.

The AP report said: "An indictment unsealed Tuesday in Los Angeles charges Juthamas Siriwan, the ex-governor of the Tourism Authority of Thailand, and her daughter, Jittisopa Siriwan, with conspiracy and eight other counts. If convicted, they each face up to 20 years in prison."

Bribe-takers are not subject to the Foreign Corrupt Practices Act and it's unclear what charges are contained in the indictment.

The Greens are scheduled to be sentenced on January 21 in Los Angeles. They were convicted in September of conspiring to violate the FCPA and money laundering laws, nine counts of violating the FCPA and seven counts of money laundering. Patricia Green was found guilty of two counts of falsely subscribing to a U.S. income tax return.

Gerald Green, 78, faces 20 to 25 years under the federal sentencing guidelines; the government has asked that he be jailed for life. His wife Patricia, 55, could be sentenced to between 19 and 24 years.

The DOJ said during the prosecution against the Greens that Siriwan accepted about $1.8 million in bribes between 2002 and 2007, when she was governor of the Tourism Authority of Thailand. She was also in charge of the Bangkok film festival. She awared the Greens contracts worth about $13.5 million, the DOJ said. She has denied any wrongdoing.

The AP said it was unclear if Siriwan and her daughter are in U.S. custody.

We'll update this story as it develops.

[Added January 22: The indictment charges Juthamas Siriwan and her daughter, Jittisopa Siriwan with one count of conspiracy, seven counts of transporting funds to promote unlawful activity (bribery), and one count of aiding and abetting. If convicted, Siriwan and her daughter each face up to 20 years in prison. A copy of the indictment in U.S. v. Juthamas Siriwan, U.S. District Court for the Central District of California (Case No.: CR 09 00081) can be downloaded here.]

Wednesday
Jan202010

The FCPAscam 22: Who Do They Work For?

Helmie Ashiblie: One of 22 people from the law enforcement and military equipment supply industry arrested this week for violating the Foreign Corrupt Practices Act.The Justice Department didn't name them. But here's what we've learned so far about the employers of those arrested in Tuesday's FCPA mega-bust:

•    Daniel Alvirez, 32, and Lee Allen Tolleson, 25, the president and director of acquisitions and logistics at ALS Technologies Inc., a company in Bull Shoals, Ark., that manufactures and sells law enforcement and military equipment;

•    Helmie Ashiblie, 44, the vice president and founder of i-Shot, a company in Woodbridge, Va., that supplies tactical bags and other security-related articles for law enforcement agencies and governments worldwide;

•    Andrew Bigelow, 40, the managing partner and director of government programs for  The Gun Search.com LLC in Sarasota, Fla. (dba/ machinegun.com), a company that sells machine guns, grenade launchers and other small arms and accessories;

•    R. Patrick Caldwell, 61, and Stephen Gerard Giordanella, 50, the current and former chief executive officers of Protective Products of America Inc, Sunrise, Fla., a company that designs and manufactures concealable and tactical body armor;

•    Yochanan R. Cohen, a/k/a Yochi Cohen, 47, the chief executive officer of High Com Security, a San Francisco company that manufactures security equipment, including body armor and ballistic plates;

•    Haim Geri, 50, the president of High Tech USA, a North Miami Beach, Fla., company that serves as a sales agent for companies in the law enforcement and military products industries;

•    Amaro Goncalves, 49, the vice president of sales for Smith & Wesson Holding Corp, Springfield, Mass., a company that designs and manufactures firearms, firearm safety/security products, rifles, firearms systems and accessories;

•    John Gregory Godsey, a/k/a Greg Godsey, 37, and Mark Frederick Morales, 37, the owner and agent of a Decatur, Ga., company that sells ammunition and other law enforcement and military equipment;

•    Saul Mishkin, 38, the owner and chief executive officer of Orkil International LLC, an Aventura, Fla., company that sells law enforcement and military equipment;

•    John M. Mushriqui, 28, and Jeana Mushriqui, 30, the director of international development and general counsel/U.S. manager of Mushriqui Consulting LLC, an Upper Darby, Penn., company that manufactures and exports bulletproof vests and other law enforcement and military equipment;

•    David R. Painter, 56, and Lee M. Wares, 43, the chairman and director of a United Kingdom company that markets armored vehicles;

•    Pankesh Patel, 43, the managing director of a United Kingdom company that acts as sales agent for companies in the law enforcement and military products industries;

•    Ofer Paz, 50, the president and chief executive officer of Paz Logistics, an Israeli company that acts as sales agent for companies in the law enforcement and military products industries;

•    Jonathan M. Spiller, 58, the owner and president of Jm Spiller & Assoc Inc, a Ponte Vedra Beach, Fla., company that markets and sells law enforcement and military equipment;

•    Israel Weisler, a/k/a Wayne Weisler, 63, and Michael Sachs, 66, owners and co-chief executive officers of U.S. Cavalry Store Inc., Stearns, Ky., company that designs, manufactures and sells armor products, including body armor;

•    John Benson Wier III, 46, the president of SRT Supply Inc., a St. Petersburg, Fla., company that sells tactical and ballistic equipment.

Politico posted some background about the defendants here.

Readers are welcome to help us fill in the gaps.

See related posts here.

Tuesday
Jan192010

Lessons From FCPAscam 

That's a Smith and Wesson and you've had your six.

        ~ James Bond to an out-of-ammo assailant in "Dr. No"

Twenty-two people from military and law-enforcement supply companies -- including the vice president of sales for American gun-maker Smith & Wesson -- were arrested Tuesday on charges of violating the Foreign Corrupt Practices Act, and conspiracy to violate the FCPA and launder money.

Our six shots. Here's an early look at what the case means:

1. The feds' new playbook. It was an undercover sting operation, the first big one in FCPA history. There was no real foreign official, only an FBI agent posing as "a sales agent who the defendants believed represented the minister of defense for a country in Africa." Can you have an FCPA violation without an actual foreign official? We'll find out.

2. Five plus five plus twenty (years that is). Even if the FCPA charges don't stick, the feds also charged the defendants with conspiracy to violate the FCPA and to commit money laundering. Conspiracy can be easier for the government to prove than substantive FCPA offenses. Just ask William Jefferson and Frederic Bourke. The FCPA count carries a 5-year penalty, as does the FCPA conspiracy charge. But the conspiracy to commit money laundering packs a 20-year punch.

3. Who squeals first, squeals best. When the government indicts en masse, the defendants who offer early cooperation usually make out best, often with much lighter sentences. Having cooperating witnesses makes life a lot easier for the prosecutors. The tactic has been used for years by the Justice Department in price-fixing and antitrust cases.

4. They're everywhere. The DOJ said "approximately 150 FBI agents executed 14 search warrants in locations across the country." How many agents were involved in the actual investigation and sting, we aren't told. Whatever the number, this was a big operation. 

5. The Brits are in the game. The DOJ said the City of London Police "executed seven search warrants in connection with their own investigations" into companies involved in the DOJ busts. The U.K. authorities snoozed for decades on overseas bribery. But lately they've also arrested Jeffrey Tesler at the DOJ's request, launched an investigation into Halliburton, look set to charge BAE, charged a former Johnson & Johnson / DePuy executive, and banned some Kenyan kleptocrats.

 6. Low-hanging fruit. White collar types aren't used to being targeted by investigators. Unlike drug dealers and Mafioso, they haven't had much practice being careful not to get caught. What's that mean for the FCPA? More of the same on the way. As Assistant Attorney General Lanny A. Breuer said Tuesday: "From now on, would-be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent."

Tuesday
Jan192010

Massive FCPA Indictment Unsealed

The Justice Department announced the biggest FCPA indictment ever; 22 from arms and security industry charged in FBI sting.First Large-Scale FCPA-Related FBI Sting

From the Justice Department's January 19, 2010 release:

 WASHINGTON – Twenty-two executives and employees of companies in the military and law enforcement products industry have been indicted for engaging in schemes to bribe foreign government officials to obtain and retain business.

Twenty-one defendants were arrested in Las Vegas yesterday. One defendant was arrested in Miami. The indictments stem from an FBI undercover operation that focused on allegations of foreign bribery in the military and law enforcement products industry.

The 16 indictments unsealed today represent the largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the Foreign Corrupt Practices Act (FCPA), a law that prohibits U.S. persons and companies, and foreign persons and companies acting in the United States, from bribing foreign government officials for the purpose of obtaining or retaining business.

The indictments unsealed today were returned on Dec. 11, 2009, by a grand jury in Washington, D.C.

In connection with these indictments, approximately 150 FBI agents executed 14 search warrants in locations across the country, including Bull Shoals, Ark.; San Francisco; Miami; Ponte Vedra Beach, Fla.; Sarasota, Fla.; St. Petersburg, Fla.; Sunrise, Fla.; University Park, Fla.; Decatur, Ga.; Stearns, Ky.; Upper Darby, Penn.; and Woodbridge, Va. Additionally, the United Kingdom’s City of London Police executed seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments.

“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. “The fight to erase foreign bribery from the corporate playbook will not be won overnight, but these actions are a turning point. From now on, would-be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent.”

The indictments allege that the defendants engaged in a scheme to pay bribes to the minister of defense for a country in Africa. In fact, the scheme was part of the undercover operation, with no actual involvement from any minister of defense. As part of the undercover operation, the defendants allegedly agreed to pay a 20 percent “commission” to a sales agent who the defendants believed represented the minister of defense for a country in Africa in order to win a portion of a $15 million deal to outfit the country’s presidential guard. In reality, the “sales agent” was an undercover FBI agent.

The defendants were told that half of that “commission” would be paid directly to the minister of defense. The defendants allegedly agreed to create two price quotations in connection with the deals, with one quote representing the true cost of the goods and the second quote representing the true cost, plus the 20 percent “commission.” The defendants also allegedly agreed to engage in a small “test” deal to show the minister of defense that he would personally receive the 10 percent bribe.

The indictments charge the following executives and employees of the various companies in the military and law enforcement product industries:

•    Daniel Alvirez, 32, and Lee Allen Tolleson, 25, the president and director of acquisitions and logistics at ALS Technologies Inc., a company in Bull Shoals, Ark., that manufactures and sells law enforcement and military equipment;

•    Helmie Ashiblie, 44, the vice president and founder of a company in Woodbridge, Va., that supplies tactical bags and other security-related articles for law enforcement agencies and governments worldwide;

•    Andrew Bigelow, 40, the managing partner and director of government programs for a Sarasota, Fla., company that sells machine guns, grenade launchers and other small arms and accessories;

•    R. Patrick Caldwell, 61, and Stephen Gerard Giordanella, 50, the current and former chief executive officers of Protective Products of America Inc, Sunrise, Fla., a company that designs and manufactures concealable and tactical body armor;

•    Yochanan R. Cohen, a/k/a Yochi Cohen, 47, the chief executive officer of a San Francisco company that manufactures security equipment, including body armor and ballistic plates;

•    Haim Geri, 50, the president of a North Miami Beach, Fla., company that serves as a sales agent for companies in the law enforcement and military products industries;

•    Amaro Goncalves, 49, the vice president of sales for Smith & Wesson Holding Corp, Springfield, Mass., a company that designs and manufactures firearms, firearm safety/security products, rifles, firearms systems and accessories;

•    John Gregory Godsey, a/k/a Greg Godsey, 37, and Mark Frederick Morales, 37, the owner and agent of a Decatur, Ga., company that sells ammunition and other law enforcement and military equipment;

•    Saul Mishkin, 38, the owner and chief executive officer of an Aventura, Fla., company that sells law enforcement and military equipment;

•    John M. Mushriqui, 28, and Jeana Mushriqui, 30, the director of international development and general counsel/U.S. manager of an Upper Darby, Penn., company that manufactures and exports bulletproof vests and other law enforcement and military equipment;

•    David R. Painter, 56, and Lee M. Wares, 43, the chairman and director of a United Kingdom company that markets armored vehicles;

•    Pankesh Patel, 43, the managing director of a United Kingdom company that acts as sales agent for companies in the law enforcement and military products industries;

•    Ofer Paz, 50, the president and chief executive officer of an Israeli company that acts as sales agent for companies in the law enforcement and military products industries;

•    Jonathan M. Spiller, 58, the owner and president of a Ponte Vedra Beach, Fla., company that markets and sells law enforcement and military equipment;

•    Israel Weisler, a/k/a Wayne Weisler, 63, and Michael Sachs, 66, owners and co-chief executive officers of a Stearns, Ky., company that designs, manufactures and sells armor products, including body armor;

•    John Benson Wier III, 46, the president of a St. Petersburg, Fla., company that sells tactical and ballistic equipment.

All of the defendants except Giordanella were arrested yesterday by FBI agents in Las Vegas. Giordanella was arrested in Miami, also by FBI agents.

Each of the indictments allege that the defendants conspired to violate the FCPA, conspired to engage in money laundering, and engaged in substantive violations of the FCPA. The indictments also seek criminal forfeiture of the defendants’ ill gotten gains.

The maximum prison sentence for the conspiracy count and for each FCPA count is five years. The maximum sentence for the money laundering conspiracy charge is 20 years in prison.

The DOJ's release is here.

The indictments can be downloaded from the links below:

Monday
Jan182010

Four Await January Sentencing

Hollywood movie producers Gerald and Patricia Green: They may soon become the first husband and wife sentenced for violating the Foreign Corrupt Practice Act. Prosecutors want Gerald Green to spend the rest of his life in prison.Federal sentencing dates often slip. But if theirs hold, four defendants in FCPA cases will learn their fates this month:

Gerald and Patricia Green -- January 21, 2010.

Jim Bob Brown -- January 28, 2010.

Jason Edward Steph -- January 28, 2010.

If all of them are sentenced on schedule, this will be the biggest sentencing month ever for individuals in cases involving the Foreign Corrupt Practices Act.

This month could also see the longest sentence handed out to an FCPA defendant. Under the federal guidelines, Gerald Green, 77, is facing between 20 and 25 years in prison; the government wants him sentenced to life in prison.

And this may be the month when the first married couple -- Gerald Green and his wife Patricia -- are sentenced for FCPA violations. (Stuart Carson and his wife, Hong Rose Carson, face FCPA charges in another pending case.)

Mario Covino and Richard Morlok were scheduled to be sentenced on January 25 but their dates have been reset to February 14, 2010. 

See related posts Their Days Are Numbered and Make That Sixteen.

Sunday
Jan172010

One Of The Most Heroic Deeds

Jonathan Daniels (March 20, 1939 – August 20, 1965)

Remembering Martin Luther King and a man he inspired

After he graduated from high school in Keene, New Hampshire, Jonathan Daniels -- the son of a doctor and a school teacher -- headed south to the Virginia Military Institute. There he became valedictorian of the VMI Class of 1961. Next came a stint as a Harvard grad student studying literature. But he felt called to be a seminarian and moved next door to the Episcopal Divinity School.

It was there, his VMI biography says, that Jonathan Daniels heard Martin Luther King's pleas to his fellow clergy to become more involved in the civil rights movement. He responded by traveling to Alabama to help register African-American voters.

Daniels was arrested in August 1965 for being part of a voter-rights demonstration. "Dear Mum," he wrote from jail on August 17, "an eminently peculiar birthday card ... I have been in jail ever since Sat. — the Lowndes County jail in Hayneville, after being transferred from Fort Deposit, where a bunch of us were arrested for picketing. Should be out in 2-3 days and back to work ... With much, much love, Jon."

After he was released from the jail on August 20, he and a Catholic priest walked with two black teenagers, Joyce Bailey and Ruby Sales, to a store to buy a soda. On the steps of the store was Tom Coleman, a construction worker and part-time deputy sheriff, who aimed a shotgun at sixteen year old Ruby Sales. Daniels pushed her to the ground and stepped in front, saving her life. The shotgun blast killed Daniels instantly.

Martin Luther King said, "One of the most heroic Christian deeds of which I have heard in my entire ministry was performed by Jonathan Daniels."

In the years that followed, the Episcopal Church added the date of Daniels' death to its calendar of feasts, and in England's Canterbury Cathedral, his name is among the 15 honored in the Chapel of Martyrs. At VMI, one of only four named archways in the famed Barracks is dedicated to him, as is a memorial courtyard. Back in his hometown of Keene, a new elementary school bearing his name was dedicated in 1968.

*   *   *

During the days of the civil rights struggle, small-town New Hampshire was a million miles from the American South. But the Daniels' family home was near ours and his father delivered us into the world. So when Jonathan Daniels died, we learned about Martin Luther King and what he was fighting for. It wasn't a million miles away after all.

A generation later, on the day our son graduated from VMI, we stood in the Barracks under the Daniels arch. Under the mighty influence of Dr. King and the memory of a man he inspired.

Thursday
Jan142010

Dow Bribe-Related Suit Tossed

Chairman Andrew Liveris and 11 other members of Dow Chemical's board were named in the shareholder derivative suit. A Delaware chancery court this week cited Dow Chemical's corporate compliance program as a reason for dismissing a shareholder derivative suit against the company's current directors that alleged they failed to prevent overseas bribery.

The suit was first filed in February 2009. It was based partly on the decision by Kuwait's parliament to rescind the purchase of some of Dow's assets. Kuwait rejected the deal -- known as K-Dow -- because of “suspicions of profiteering and accepting all forms of commissions" by executives of the buyer, state-owned Kuwait Petrochemicals Industries Company. 

Based on Kuwait's allegations, the plaintiffs in the Delaware case said Dow’s board "failed to detect and prevent bribery in connection with the K-Dow transaction." The chancery court rejected the claim. It said although "plaintiffs allege that bribery may have occurred, they do not allege that the board knew about, or had reason to suspect, bribery." On that basis, the allegations in the complaint concerning the K-Dow deal were dismissed, along with the rest of the complaint.

In a footnote that may have important consequences beyond this case, the court said Dow's compliance program was evidence that the board had met its fiduciary duty to prevent overseas bribery. It said there was enough evidence for purposes of the motion to dismiss to assume that bribery had occurred. But even if it had, that didn't prove the board was liable unless the plaintiffs could also show the board intentionally ignored the compliance program.

The court said,

Plaintiffs cannot meet their burden here for another reason. The Dow board has set up policies to prevent improper dealing with third parties. In particular, Dow’s Code of Ethics expressly prohibits any unethical payments to third parties. Moreover, plaintiffs’ own complaint once again belies their argument. Contained within Count II’s litany of alleged breaches of fiduciary duty plaintiffs implicitly acknowledge Dow’s “corporate governance procedures.”. . . Plaintiffs cannot simultaneously argue that the Dow board “utterly failed” to meet its oversight duties yet had “corporate governance procedures” in place without alleging that the board deliberately failed to monitor its ethics policy or its internal procedures.

(citations omitted)

The case is a powerful reason for directors and officers to insist on robust antibribery compliance programs that include regular reports back to the board.

A copy of the memorandum opinion by the Delaware chancery court in In Re The Dow Chemical Company Derivative Litigation, Consolidated Civil Action No. 4349-CC, decided January 11, 2010, can be downloaded here.

A copy of Dow's code of business conduct (in 20 languages) can be downloaded here.

We're grateful once again to Marc Bohn for his invaluable help with this post.

Thursday
Jan142010

Graft Probe Shakes Algeria Energy Sector

Mohamed Meziane, the chief of Algeria's state energy company Sonatrach, and ten other executives are under investigation for corruption, according to reports.The head of Algeria's state energy firm Sonatrach and ten other company executives are under investigation for corruption. Reports this week from several sources including upstreamonline.com said Mohamed Meziane, Sonatrach's president since 2003, has stepped down because of the ongoing investigation.

Click to read more from the Global Graft Report ...



Wednesday
Jan132010

Surfing The SFO

Director Richard Alderman says, "The Serious Fraud Office has changed significantly over the past year. We have become much more proactive and innovative in our approach to combating serious fraud and corruption." The Financial Times reported Thursday that David Mabey, the former head of British construction firm Mabey & Johnson Ltd, will be charged by the Serious Fraud Office with false accounting and breaching the United Nations' sanctions on Iraq.

Mabey & Johnson was sentenced in September last year by an English court for overseas corruption and violating the U.N.'s oil-for-food program. The bridge-building specialist paid £6.6 million in criminal fines and related assessments. It had pleaded guilty to bribing officials in Jamaica and Ghana to win public contracts, and paying more than £123,000 to the pre-war Iraqi regime in violation of U.N. sanctions. The privately-held company was also required to retain and pay for an SFO-approved compliance monitor.

The press report said David Mabey is scheduled to appear at the City of Westminster Magistrates' Court on February 2. It said,

The prosecution of Mr Mabey highlights a new potential legal pitfall facing existing directors and those aiming for boardroom jobs. Follow-on criminal cases against individual directors in corrupt businesses are common in the U.S., where prosecutors have for many years successfully used companies' confessions as platforms to pick off executives allegedly involved.

*   *   *

In December, the SFO charged a former executive of a Johnson & Johnson subsidiary with overseas corruption. Robert John Dougall, 44, an ex-vice president of DePuy International Limited, was accused of making corrupt payments to medical professionals in the Greek public healthcare system in order to sell orthopaedic products. A copy of the SFO's December 1 announcement is here.

In February 2007, Johnson & Johnson said it had "voluntarily disclosed to the U.S. Department of Justice and the U.S. Securities and Exchange Commission that subsidiaries outside the United States are believed to have made improper payments in connection with the sale of medical devices in two small-market countries. "

DePuy and four other orthopedic device makers -- Biomet, Zimmer, Smith & Nephew and Stryker -- agreed in September 2007 to pay $310 million to settle charges they paid kickbacks to induce U.S. doctors to buy their products. Since the U.S. settlement, the four companies, along with Medtronic Inc. and Wright Medical Group, have disclosed DOJ and SEC Foreign Corrupt Practices Act investigations. 

*   *   *

The SFO's website says the agency is "an independent Government department that investigates and prosecutes serious or complex fraud and corruption." It's part of the U.K. criminal justice system with jurisdiction in England, Wales and Northern Ireland but not in Scotland, the Isle of Man or the Channel Islands. The director (Richard Alderman, above) is appointed by and accountable to the attorney general (Baroness Scotland).

*   *   *

The SFO now has about 80 ongoing cases and is pushing for enactment of the new Bribery Bill. In November the bill was sent to the House of Lords. The Ministry of Justice says the legislation would replace the "fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-191." It would also create two general offences -- paying or offering bribes, and asking for or receiving bribes. Like the FCPA, it would create a separate offence of bribery of a foreign public official, and add a new corporate offence of failing to prevent a bribe being paid on the company's behalf. See our post here.