Former Valve Company Exec Pleads Guilty to FCPA Bribery Offenses
The Justice Department has announced that Flavio Ricotti, a former executive of California-based valve company, Control Components Inc. (CCI), has pleaded guilty for his participation in a conspiracy to secure contracts by paying bribes to officials of a foreign state-owned oil company as well as officers and employees of foreign and domestic private companies, in violation of the Foreign Corrupt Practices Act (FCPA) and Travel Act.
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(In July 2009, CCI pleaded guilty to a criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA. CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years. See ITT's Online Archives or 07/08/10 news, 10070815, for BP summary.)
Exec Conspired to Bribe Official of Saudi Arabian State-Owned Oil Company
From 2001 through 2007, Ricotti was CCI’s director and then vice-president of sales for Europe, Africa and the Middle East (EAME), and was responsible for overseeing the marketing and sales of CCI’s products to customers in that region. In connection with his guilty plea, Ricotti admitted that he conspired with other CCI employees to offer a payment to an official of Saudi Aramco, a Saudi Arabian state-owned oil company, in connection with attempting to obtain a valve contract for CCI in 2003.
Also Paid Employee of Private Co. to Assist Awarding CCI a Contract in Qatar
According to DOJ, Ricotti also admitted to conspiring with other CCI employees to make a payment to an employee of a private company so that the employee would assist in awarding to CCI a valve contract in Qatar. Ricotti admitted that during the bidding process, one of his subordinates informed him that an employee of the private company was willing to provide CCI with confidential information about the bids of CCI’s competitors and to exercise influence in CCI’s favor in the awarding of the contract in exchange for a commission. Ricotti admitted that the benefit conferred on CCI as a result of the corrupt payments with which he was directly involved was more than $400,000 but less than $1 million.
Ricotti & 5 Other Former Execs Scheduled to be Sentenced in Oct 2011
In April 2009, Ricotti and five other former executives of CCI were charged in an indictment for their roles in the foreign bribery scheme. The other five former CCI executives include Stuart Carson, CCI’s former president; Hong (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; and Han Yong Kim, former president of CCI’s Korean office. Trial is scheduled to begin on October 4, 2011.
(In related cases, two defendants, Mario Covino and Richard Morlok, pleaded guilty in 2009 to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI.)
Ricotti Agreed to Cooperate with DOJ, Faces Max of 5 Years in Prison
As part of his plea agreement, Ricotti has agreed to cooperate with the Justice Department. At sentencing, Ricotti faces a maximum of five years in prison.