Twenty-two executives and employees at suppliers to the military and law enforcement agencies were arrested on the eve of their industry's annual trade show in Las Vegas after a 2 1/2-year undercover sting operation aimed at schemes to bribe a foreign official.
Charged are people at companies in eight US states and executives at companies in the United Kingdom and Israel. Five defendants were identified in federal court in Las Vegas as British citizens. Two others were from Israel, and one was from Peru.
The Justice Department called the case the largest single investigation and prosecution of individuals in the history of the 1977 Foreign Corrupt Practices Act, which bars bribery of foreign government officials. It also is the first large-scale use of an undercover operation in enforcing the corrupt practices act.
In a briefing for reporters, Assistant Attorney General Lanny A. Breuer, head of the Justice Department's criminal division, said there are more than 140 open investigations under the act.
Twenty-one of the 22 people caught up in the case were arrested in Las Vegas, where they were preparing to attend the 2010 Shooting, Hunting & Outdoor Trade Show, a convention with more than 55,000 attendees at the Sands Expo & Convention Center. The convention started Tuesday.
None of the 21 entered pleas during initial appearances before US Magistrate Judge Peggy Leen. She set bond and release restrictions for 13 - ordering most to surrender their passports and instructing each to appear February 3 in federal court in Washington.
The judge rescheduled detention hearings for three defendants until Wednesday and set hearings Thursday for another five.
The defendants allegedly agreed to pay a 20 percent commission to a sales agent they believed represented the defense minister for an African country. They were trying to win a multimillion-dollar deal to outfit the presidential guard.
The sales agent was actually an undercover FBI agent, and no defense minister was involved at all. Several of the indictments in the probe disclosed that at least one other FBI agent was operating under cover, posing as a procurement officer for the ministry of defense of the African nation.
In Las Vegas, word of the arrests came as a surprise to show organizers, said Mark Thomas, marketing and communications manager for the show host, the National Shooting Sports Foundation of Newtown, Connecticut. Thomas referred questions about the arrests to the FBI and Justice Department.
Those charged worked for companies in Arkansas, Virginia, Florida, California, Massachusetts, Georgia, Pennsylvania and Kentucky.
Indictments against each of the 22 individuals alleges conspiracy and substantive violations of the corrupt practices act and conspiracy to engage in money laundering. The charges relating to the corrupt practices act carry a maximum five-year prison sentence on conviction. The maximum sentence for money laundering conspiracy is 20 years.