11/14/2010

http://westlawnews.thomson.com/California_Litigation/Insight/2010/11_-_November/Government_indicts_5_for_bribing_Mexican_utility_officials/

Nov. 14 (Westlaw Journals)  An electrical equipment manufacturer, two of its executives and two directors of a Mexican business have been charged in a federal grand jury indictment with bribing Mexican officials to obtain lucrative contracts from a state-owned utility.

Azusa, Calif.-based Lindsey Manufacturing Co., President Keith E. Lindsey, 65, and Vice President Steven K. Lee, 60, were named in the eight-count indictment filed in the U.S. District Court for the Central District of California.

Co-defendants Enrique Faustino Aguilar Noriega, 56, and his wife, Angela Maria Gomez Aguilar, 55, both of Cuernavaca, Mexico, are accused of money laundering.

The Aguilars are directors of Grupo Internacional de Asesores S.A., which acts as a sales representative for companies that want to do business with the utility, the Comisión Federal de Electricidad, according to the indictment.

Lindsey allegedly hired Grupo and the Aguilars to represent his equipment manufacturing company to CFE, which is responsible for supplying electricity to nearly all of Mexico.

Between February 2002 and March 2008, Lindsey and Lee allegedly paid Enrique Aguilar a 30 percent commission for all goods and services Lindsey Manufacturing provided to CFE, one of its biggest customers, the charges say.

The commission payments were deposited in Grupo’s brokerage account but made to look on the books as though only a 15 percent commission had been paid, according to the indictment.

Prosecutors said most or all of the commission was actually used to bribe two unidentified CFE officials.  The indictment said the cost of the alleged bribes was offset by correspondingly higher prices for products and services sold by Lindsey Manufacturing to the utility.

The indictment alleges the Aguilars would launder the money through Grupo’s brokerage account or through another company they controlled, Sorvill International S.A., and submit false invoices for the payments to Lindsey Manufacturing.

Prosecutors say the alleged bribes paid by the defendants to the Mexican officials included a $1.8 million yacht, a $300,000 Ferrari, and hundreds of thousands of dollars in credit card payments and consultant fees for the officials’ family members.

The indictment charges the defendants with violations of the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-2, which prohibits companies from bribing foreign officials to obtain business.