Mistrial in U.S. bribery sting after jury deadlock

Thu Jul 7, 2011 7:07pm EDT

* US conducted sting that ensnared 22 for bribery

* US government plans to retry the accused salesmen

By Jeremy Pelofsky

WASHINGTON, July 7 (Reuters) - A U.S. judge on Thursday declared a mistrial after the jury deadlocked over whether four arms salesmen were guilty of violating federal bribery laws by offering bribes to win lucrative contracts in an undercover operation that ensnared 22 people, according to the Justice Department.

In a setback for the Obama administration, Judge Richard Leon declared the mistrial after jurors were unable to reach a unanimous verdict after six different votes. The trial lasted for six weeks and jurors deliberated for more than a week.

The bribery prosecution was seen by some legal experts as unusual because it involved an unprecedented large-scale sting operation by prosecutors and the FBI, which is typically used for other criminal cases.

Prosecutors told Leon that they planned to retry the case, according to the Justice Department.

The group was accused of trying to bribe two men who posed as representatives of Gabon's defense ministry to win $15 million in deals to provide guns, body armor and other equipment. The representatives were really FBI agents.

Those caught in the sting operation included a former U.S. Secret Service agent as well as an executive at the gun manufacturer Smith & Wesson Holding Co (SWHC.O). Already three people who were arrested in the scheme have pleaded guilty.

Court proceedings revealed that helping the government in the sting operation was former arms salesman Richard Bistrong who worked for Armor Holdings, which was bought by BAE Systems Plc (BAES.L).

He served as an intermediary helping draw in others to bid for the $15 million in contracts.

Bistrong pleaded guilty last September for other unrelated bribery charges, including conspiring to bribe officials to win contracts from the United Nations and other foreign entities between 2001 and 2006.

Judge Leon broke up the group of 22 into several trials, the first involving four individuals: Andrew Bigelow, Pankesh Patel, Lee Tolleson and John Wier.

They had been charged with conspiracy and for violating the U.S. Foreign Corrupt Practices Act, which prohibits the payment of bribes to foreign officials in order to secure business contracts.

During the two-and-a-half year investigation, which involved some 250 FBI agents, the arms sales representatives were told they would have to add a 20 percent commission to their price quotes, which would serve as essentially bribes.

The case is USA v. Goncalves et al, No. 09-cr-335 in U.S. District Court for the District of Columbia. (Reporting by Jeremy Pelofsky, editing by Carol Bishopric)

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