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
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