FBI Sting Shakes Shot Show

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FBI Sting Shakes SHOT Show
Word of this week's FBI sting operation that has led to the arrests of 22 individuals from the firearms and weapons industry shook day two of the 2010 SHOT Show. Thirty months after beginning their investigation, the FBI closed the net on twenty one of their targets here at SHOT Show. The twenty-second was arrested in Miami.

All were charged with attempting to bribe a foreign official in attempt to win a multimillion dollar contract to outfit a security force for the defense minister of an African country. There was no African country, but an undercover FBI agent posing as a foreign procurement agent.

Rolled up in the largest foreign bribery investigation in the bureau's history was Amaro Goncalves, a sales executive for Smith & Wesson. As news of the arrests spread, it's safe to say there was more than a little consternation in a week that was supposed to be highlighted by new product introductions.

"Through media reports today, we became aware of the Justice Department enforcement actions which were taken yesterday and which made reference to an employee of our company," the company said in a statement, "We have no information beyond what has been reported and are prepared to cooperate fully with law enforcement in their investigation into this matter."

For two others charged in the investigation, former Secret Service Agent R. Patrick Caldwell, now CEO of Protective Products of America, inc. and former CEO Stephen Giordanella, the arrests were the end of a company cratering that began with a bankruptcy filing last week. Approval for the now shuttered company's acquisition by private investment capital firm Sun Capital Partners is now pending with the bankruptcy court.

According to Justice Department officials, more than 250 officers and agents were involved in the 30-month investigation. When the indictments were handed down, agents executed 14 search warrants across the United States, with British police assisting in seven locations there.

Three of the defendants in the case work for unnamed British companies; another for an Israeli company, with the remainder of the defendants either working privately or for companies in this country.

In the sting operation, a meeting was arranged between sales representatives and undercover FBI agents. In order to win a contract, a twenty percent commission was to be paid- with half going to the official/FBI agent. According to the Justice Department, Goncalves provided a pair of quotes for a two-phased business transaction. The first was a "test sale" of twenty-five guns; a second for 1,800 pistols. In both cases, Goncalves provided two prices, with one inflated by the required twenty percent. Similar pricing was, according to our sources, provided for other products ranging from pistols and ammunition to tear gas and grenade launchers.

The story is ongoing, and continues to develop.

We will keep you posted.

- Jim Shepherd
 
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FBI Sting Shakes SHOT Show
Word of this week's FBI sting operation that has led to the arrests of 22 individuals . . .

All were charged with attempting to bribe a foreign official in attempt to win a multimillion dollar contract to outfit a security force for the defense minister of an African country. . . .


According to Justice Department officials, more than 250 officers and agents were involved in the 30-month investigation.


so lets see, at $75,000 a year it's $6250 a month per agent.

$6250 x 30 months = $187,500 per agent

$187,500 x 250 agents = $46,875,000 to arrest 22 people

so just over $2.1 million per arrest.


And I may not understand this correctly, but their charge is bribing someone for a government contract, that doesn't exist, in Africa. Is our government pissed because it wasn't their bribe? I was under the impression that this is how government contracts are made

How is this different than "special interest groups" giving money?
 

Big Daddy 45acp

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Why? Is bribing Foreign officials a widespread problem? Not enough crime and terrorism to keep them busy?
Every man has his price. As this was a sting, the feds could offer any asking price.
Wasted time, money and man power to arrest these "alleged" criminals.
 

MotorHead

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Maybe this is why S&W is pushing Glock out of big municipal accounts nationwide? Let the investigations continue.
 

hminsky

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It always pisses me off when I hear about one contractor elbowing another one out for a deal by offering a bribe, even if they are selling
inferior stuff, and I think prosecuting bribery is something that sets us apart from third world sh#tholes.

On the other hand, a big entrapment operation for this is just stupid. They couldn't actually find and
prosecute an actual case of bribery, instead of making this hugely expensive charade?
 

Zappa

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so lets see, at $75,000 a year it's $6250 a month per agent.

$6250 x 30 months = $187,500 per agent

$187,500 x 250 agents = $46,875,000 to arrest 22 people

so just over $2.1 million per arrest.

Yup, the taxpayers get screwed again!
This whole thing sounds like an elaborate scheme of entrapment by Barry O's FBI.
Is this his payback to Sarah Brady ?
[rofl]
 
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so lets see, at $75,000 a year it's $6250 a month per agent.

$6250 x 30 months = $187,500 per agent

$187,500 x 250 agents = $46,875,000 to arrest 22 people

so just over $2.1 million per arrest.

They report a 30 month investigation "involving" over 250 officers and agents, but you have made a calculation based on the assumption that each of these 250+ people had that as their only job responsibiliy for 30 months. Chances are those that were involved for the duration worked other cases as well, and that many of the agents and officers were involved for only a small portion of the 30 months. I would not be surprised if the actual total was a small portion of that, which will be partially offset by whatever fines they are able to extort from the involved firms (since you can't put a company in jail, the only option is squeezing them for ca$h).


And I may not understand this correctly, but their charge is bribing someone for a government contract, that doesn't exist, in Africa. Is our government pissed because it wasn't their bribe? I was under the impression that this is how government contracts are made

Read up on the Foreign Corrupt Practices Act http://www.justice.gov/criminal/fraud/fcpa/ to understand the law that makes bribing a foreign official a crime in the US, even if said bribery does not involve any US recipient. In addition to being an attempt to export our value system, the FCPA also seeks to assure that companies that don't offer bribes are not at a competitive disadvantage. If the FCPA were followed and not skirted through outright violation, or "agents" who pay bribes on behalf of the manufacturers, nations not willing to buy without a bribe would simply not court American suppliers.

Nothing in FCPA precludes hiring a local agent who "knows the market" but, if you know any of the money you are paying the agent is going to be used for a bribe, it's a FCPA violation. The feds can prosecute not only the company, but can also prosecute those involved as individuals.
 
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They report a 30 month investigation "involving" over 250 officers and agents, but you have made a calculation based on the assumption that each of these 250+ people had that as their only job responsibiliy for 30 months. Chances are those that were involved for the duration worked other cases as well, and that many of the agents and officers were involved for only a small portion of the 30 months. I would not be surprised if the actual total was a small portion of that, which will be partially offset by whatever fines they are able to extort from the involved firms (since you can't put a company in jail, the only option is squeezing them for ca$h).


This....
 
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I don't see how "bribing" people to choose your product is any different that lobby groups "donating" money to legislators to push their agenda.

At Shot Show? This was done as a message to gun owners.
 

GSG

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Uh oh. Sounds like the FBI is trying to make up for their own little bribery scandal:

http://www.tscm.com/mace.html

The Famous FBI OC Study of 1989

The FBI Firearms Training Unit completed a three year study in 1989; however, the FBI agent involved in the initial OC evaluation plead guilty of a felony and was convicted of receiving bribes and kickbacks from the major OC vendor several years later.



FBI agent Thomas W.W. Ward, former director of the FBI's Quantico Firearms Training Unit and the agency's chief expert on pepper spray pled guilty (in a Miami Federal court) of a single count felony for accepting a $57,000 in bribes and kickbacks over a two-year period.



Federal prosecutors stated that Ward was receiving $5,000 per month from Luckey Police products, and that based on his research the FBI was purchasing Cap-Stun for use by all of its agents.



The payments were reportedly made by Lucky Police Products, the Fort Lauderdale (Florida) manufacturer of Cap-Stun, then the country's second largest manufacturer of OC or pepper gas. On April 23, 1996 Ward received two months in prison and three years parole.



The Ward case has cast serious doubts on the legitimacy of the FBI's Quantico Firearms Training Unit and specifically the 1989 report on the usage of OC.

As a side note, Cap Stun sucks.

so lets see, at $75,000 a year it's $6250 a month per agent.

$6250 x 30 months = $187,500 per agent

$187,500 x 250 agents = $46,875,000 to arrest 22 people

so just over $2.1 million per arrest.


And I may not understand this correctly, but their charge is bribing someone for a government contract, that doesn't exist, in Africa. Is our government pissed because it wasn't their bribe? I was under the impression that this is how government contracts are made

How is this different than "special interest groups" giving money?

I agree with your points. And even if the investigation didn't cost as much as you calculated, no doubt it was a multi-million dollar investigation, where the "perpetrators" probably did no more than Washington D.C. lobbyists do every single day.
 

Twigg

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so lets see, at $75,000 a year it's $6250 a month per agent.

$6250 x 30 months = $187,500 per agent

$187,500 x 250 agents = $46,875,000 to arrest 22 people

so just over $2.1 million per arrest.

Just your gubbermint dollars at work. [thinking] [rolleyes] [laugh]

Note to self: Stop bribing foreign nationals at gun shows.
 

Admin

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I agree with your points. And even if the investigation didn't cost as much as you calculated, no doubt it was a multi-million dollar investigation, where the "perpetrators" probably did no more than Washington D.C. lobbyists do every single day.

But, but, but it's guns...
 
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Hey Hassan, umm......please forget what we talked about the other night. I....umm.......don't have what your looking for. And thanks for the offer of the vacation. The sand sure sounds beautiful, but something came up.
 
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Hmmmm....not all that different that what is going one with the Obama administration and one particular "green" window company. The difference.....the POTUS can do it and gun dealers can't.
 
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A very poor use of the FBI's resources and your/my tax $$$$$. Of all the things 150 agents can focus on and all the issues we have to face, and that's worth their time and our $$$? Big fail there. I suspect if one were to shake the bushes, someone or some dept. agenda would fall out....
 

EC1

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Remember the Chicago/Illinois motto : PAY to PLAY : same as the Rev Al Sharpton's.[angry]
 
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hminsky

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Why is it illegal to bribe anybody? I don't get it. If a company want to give away money why can't they?

Well, if you look at countries where bribery is a routine part of business, and how it cripples and destroys any hope they might have for their economies, I think you might be able to answer that question.
 
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The FCPA is also an attempt to protect US companies that don't bribe foreign officials by allowing them to compete without payment of honorariums.

The problem is that violations can be vaguely defined. Obviously paying a bribe is obvious, but the FCPA requires that the company exercise due dilligence with intermediaries to make sure they are not being used as bribing agents, and penalizes "willful ignorance". It's not enough to simply not agree to any bribe - you have to be able to convince the govt that you did a reasonable amount of digging on any agent you use to avoid any claim you were "willfully ignorant" of bribes being paid to get the business. It's sort of like the AG's list - the govt lets you know if you've been careful enough when it indicts you however, unlike the MA AG, the feds do provide some assistance to companies wanting to check to see if a transaction would be acceptable under the FCPA.

One thing that will be interesting as this story plays out is if we hear of any additional companies that were approached, but told the agent that they could not do business with him since offering bribes to foreign officials, even through intermediaries, is a federal offense.
 
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