Twenty-two people charged with violating U.S. bribery laws after allegedly trying to win arms deals from what they thought was an African defense minister were part of a single conspiracy, a U.S. prosecutor said on Wednesday.
The 22 people, who include Smith & Wesson Holding Co sales executive Amaro Goncalves, were caught in an FBI sting. They were charged in 15 separate indictments, but they were not accused collectively in one indictment for conspiring with each other.
We do believe it is one conspiracy, U.S. prosecutor Hank Walther told a federal judge during an arraignment hearing where lawyers for eight of the defendants entered not-guilty pleas for their clients.
The statement clearly surprised Judge Richard Leon and many of the defense lawyers, who raised questions about consolidating the cases and whether the defense attorneys must review the evidence against all those charged.
It was news to me that they conspired with the others, Jeremy Margolis, a lawyer for Goncalves, told the judge during the hearing.
Leon said the accusation that the group conspired even though they were charged separately was novel in my experience too.
Two defense attorneys said that they believed their clients barely knew each other beyond perhaps an occasional handshake when their paths happened to cross in the industry.
The defendants were accused of violating the Foreign Corrupt Practices Act, or FCPA, conspiracy to violate that law and conspiracy to commit money laundering tied to the sale of guns, body armor and other law enforcement equipment.
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 to win a contract, they had to add a 20 percent commission to price quotes, half of which would go to the purported minister and the rest of which would be split between the others.
The investigation was continuing, Walther said. Search warrants were executed when the people were arrested and there could be previous acts of bribery resulting in additional charges, he said.
The prosecutor also said there was a cooperating witness. He reportedly is Richard Bistrong, a sales executive for Armor Holdings, now a subsidiary of BAE Systems. A plea hearing for Bistrong was scheduled last month, but was canceled without explanation.
(Reporting by Jeremy Pelofsky. Editing by Robert MacMillan)