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FCPA Blog Daily News

Entries in Mario Covino (14)


DOJ seeks consistency in CCI sentences

Here's a note from contributing editor Marc Alain Bohn about our post yesterday, discussing the DOJ's recommendation that three CCI executives be sentenced to probation and not jail time.

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DOJ recommends no jail for three CCI execs

In Marc Alain Bohn's FCPA Docket yesterday, there was important news about three individuals facing sentencing in the Control Components Inc. case.

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CCI's Edmonds Pleads Guilty

David Edmonds is the seventh former CCI executive to plead guilty to FCPA charges.

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Carsons Plead Guilty

Two former executives of Control Components Inc. became the second husband and wife convicted of FCPA offenses when they pleaded guilty Monday in federal court in Santa Ana, California.

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Are Stuart And Rose Carson Planning To Plead?

There could be a lot of reasons for the latest order in the Carson case.

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You're Grounded

An Italian citizen extradited in July last year to face FCPA charges was released from jail two weeks after his arraignment in California. But he can't leave home.

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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.


Sentencing Watch List

Let's update the list of individuals waiting to be sentenced for violating or conspiring to violate the Foreign Corrupt Practices Act. Since October, Frederic Bourke and William Jefferson have been sentenced and come off the list. Charles Jumet, Paul Novak, and Fernando Maya Basurto have entered guilty pleas are are added to it. Juan Diaz was to be sentenced on November 13 but the court reset his date. A reader also let us know that Si Chan Wooh, the former head of Schnitzer Steel's international subsidiary, who pleaded guilty in June 2007 to conspiracy to violate the FCPA, is scheduled to be sentenced next year in federal court in Oregon. So the list now stands at 18. 

Here they are:

Fernando Maya Basurto -- no date given.

Jim Bob Brown -- January 28, 2010

Joshua Cantor -- no date given.

Mario Covino -- January 25, 2010

Juan Diaz -- January 29, 2010

Thomas Farrell -- no date given.

Gerald and Patricia Green -- December 17, 2009

Charles Paul Edward Jumet -- February 12, 2010

Clayton Lewis -- no date given.

Joseph T. Lukas -- April 6, 2010

Richard Morlok -- January 25, 2010

Paul G. Novak -- February 19, 2010

Antonio Perez -- October 6, 2009. [No sentencing reported and no resetting of the sentencing date shown in the court docket.]

Si Chan Wooh -- April 26, 2010

 Leo Winston Smith -- December 18, 2009

Albert "Jack" Stanley -- February 24, 2010

Jason Edward Steph -- January 28, 2010

Let us know if we're still missing anyone or if other sentencing dates have changed.

*   *   *   

Words we like.  From Abraham Lincoln, October 1858:

It is the eternal struggle between these two principles — right and wrong — throughout the world. They are the two principles that have stood face to face from the beginning of time; and will ever continue to struggle. The one is the common right of humanity, and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, "You toil and work and earn bread, and I'll eat it." No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.


Their Days Are Numbered

We count at least thirteen people waiting to be sentenced for violating or conspiring to violate the Foreign Corrupt Practices Act. Both offenses carry a prison term of up to five years. And for substantive offenses the fine can be up to $250,000 or twice the gross gain produced by the bribes. Those on our list either pleaded guilty or were convicted at trial. Their names (linked to posts describing their guilty pleas or convictions) are followed by current sentencing dates. The dates often slip, so we'll try to stay on top of any changes.

Who are they? A former congressman, a famous entrepreneur, husband-and-wife movie producers, c-level executives and top managers. Real people who are probably going to jail. Yes, the FCPA is serious, and the consequences of not complying with it can be tragic.

Here are the twelve men and one woman and their days of reckoning:

Frederic Bourke -- November 10, 2009.
Jim Bob Brown -- January 28, 2010.
Mario Covino -- January 25, 2010.
Juan Diaz -- November 13, 2009.

Gerald and Patricia Green -- December 17, 2009.

William Jefferson -- November 13, 2009.

Joseph T. Lukas -- April 6, 2010.

Richard Morlok -- January 25, 2010.

Antonio Perez -- October 6, 2009. [No sentencing reported and no resetting of the sentencing date shown in the court docket.]

Leo Winston Smith -- December 18, 2009.

Albert "Jack" Stanley -- February 24, 2010.

Jason Edward Steph -- January 28, 2010.

Let us know if there are others who belong on the list.


Guilty Plea By Control Components

Valve-maker Control Components Inc. (CCI) of Rancho Santa Margarita, California pleaded guilty Friday to violating the anti-bribery provisions of the Foreign Corrupt Practices Act (15 U.S.C. §78dd-2) and the Travel Act (18 U.S. C. §1952). It admitted bribing foreign officials in a decade-long scheme to secure contracts in about 36 countries. CCI's plea agreement requires it to pay a criminal fine of $18.2 million, implement an anti-bribery compliance program, retain a compliance monitor for three years, serve a three-year term of organizational probation, and cooperate with the DOJ's ongoing investigation.

CCI designs and manufactures service control valves for use in the nuclear, oil and gas, and power generation industries. Its website is here. It's owned by British-based IMI plc, which trades on the London Stock Exchange under the symbol IMI.L.

The corrupt payments were made to foreign officials at state-owned entities including Jiangsu Nuclear Power Corp. (China), Guohua Electric Power (China), China Petroleum Materials and Equipment Corp., PetroChina, Dongfang Electric Corporation (China), China National Offshore Oil Corporation, Korea Hydro and Nuclear Power, Petronas (Malaysia) and National Petroleum Construction Company (United Arab Emirates).

From 2003 through 2007, CCI made about 236 corrupt payments to foreign officials in more than 30 countries amounting to $4.9 million. The bribes resulted in sales that produced net profits of about $46.5 million.

Two former executives of CCI pleaded guilty earlier this year to conspiring to bribe officers and employees of foreign state-owned companies on behalf of the valve company. Mario Covino, CCI’s former director of worldwide factory sales, pleaded guilty on Jan. 8, 2009 to one count of conspiracy to violate the FCPA and admitted to causing the payment of $1 million in bribes to officers and employees of several foreign state-owned companies. Richard Morlok, CCI’s former finance director, pleaded guilty on Feb. 3, 2009 to one count of conspiracy to violate the FCPA and admitted to causing the payment of $628,000 in bribes to officers and employees of several foreign state-owned companies. Covino and Morlok are scheduled to be sentenced on Jan. 25, 2010.

On April 8, 2009, six former CCI executives were charged in a 16-count indictment with violating the FCPA and the Travel Act (here). They're Stuart Carson, CCI’s former chief executive officer, Hong (Rose) Carson, CCI’s former director of sales for China and Taiwan, Paul Cosgrove, CCI’s former director of worldwide sales, David Edmonds, CCI’s former vice president of worldwide customer service, Flavio Ricotti, CCI’s former vice-president and head of sales for Europe, Africa and the Middle East, and Han Yong Kim, the former president of CCI’s Korean office. Hong (Rose) Carson was also charged with one count of destruction of records in connection with a matter within the jurisdiction of a department or agency of the United States. Their trial is currently scheduled for Dec. 8, 2009.

As the DOJ says, an indictment is merely an accusation and the defendants are presumed innocent until and unless found guilty at trial beyond a reasonable doubt.

Download the DOJ's July 31, 2009 release here.

Download a copy of CCI's July 22, 2009 plea agreement here.

Download the July 22, 2009 criminal information against CCI here.

Download Mario Covino's plea agreement here.

Download Richard Morlok's plea agreement here.

Download the indictment of the six former executives of CCI here.