UPDATE 1-U.S. drops remaining charges in arms bribery case
* The defendants had pleaded guilty after foreign bribery sting
* Unusual for gov't to drop charges after plea
* US had dismissed case against 16 other defendants last month
* Case involved sting purporting to seek bribes for Gabonese official
WASHINGTON, March 27 (Reuters) - U.S. federal prosecutors on Tuesday dropped the remaining charges arising out of a bribery sting involving arms sales and an FBI agent who posed as an African defense official, letting three men who had already pleaded guilty off the hook.
A U.S. district judge said he would grant the Justice Department's request to dismiss its case against Jonathan Spiller, a British citizen residing in the United States, and two Americans, Haim Geri and Daniel Alvirez. The three had previously pleaded guilty to conspiring to violate a U.S. foreign bribery law, the Foreign Corrupt Practices Act.
The defendants were charged with trying to bribe a supposed Gabonese defense minister - actually an undercover agent acting in an elaborate operation run by the Federal Bureau of Investigation. All three were in the business of supplying military and law enforcement equipment.
Geri faced up to two years in prison, Spiller faced between three and four years, and Alvirez faced up to nine years because he also pleaded guilty to charges outside the sting operation. In dismissing the charges, the government asked for the ability to bring the separate case against Alvirez again.
The status of all three was thrown into doubt last month when the prosecutors dropped the case against 16 other defendants who were rounded up in the sting operation over two years ago but decided to fight the case.
Three more were also previously acquitted.
The decision to drop the last charges closes a tumultuous prosecution that began in January 2010 when the FBI swooped in at a gun show in Las Vegas to arrest 21 executives. One more was arrested in Miami.
The executives, who included a former Secret Service agent and a Smith & Wesson Holding Co executive, had been told they were bidding to equip the military of Gabon and that they would have to add a 20 percent "commission" to price quotes - with the extra money to be split between the purported defense minister and others.
Over the last two years since the arrests, the Justice Department's case fell apart because prosecutors were unable to convince two juries during lengthy trials that what the defendants did was in fact illegal.
The decision to drop the remaining charges also stemmed from a setback during one of the trials.
The three defendants who pleaded guilty had admitted to being involved in a conspiracy, but the federal judge overseeing the case, Richard Leon, said at the end of the second trial the government did not prove there was a conspiracy and acquitted the defendants on trial of that charge.
The department said on Tuesday that although it did not agree with that ruling, it had concluded the ruling would "apply equally" to the defendants who previously pleaded guilty, and concluded that "further prosecution" is "unlikely to be successful."
The Justice Department does not often dismiss entire cases, and dropping charges after defendants have already pleaded guilty is also a rare occurrence.
"Normally they would try to salvage what they could," said Stuart Green, a law professor at Rutgers University who specializes in white collar crime.
"Prosecutors wouldn't normally not only undo the plea but drop the charges going forward, unless there was a really serious reason to do so," he said.
After more than two years and hundreds of hours in court on the case, a hearing on the dismissal lasted just 10 minutes.
"It's a fair result," Judge Leon said.
"God knows I enjoyed the last two trials," he said, but the "thought of three more" is a "pretty daunting mountain to climb."
"I am so glad that this painful episode in my life is now over and that the government decided to do the right thing in dismissing the charges against me," Spiller said in a statement.
"I have tried all along to do what I felt was right and all I want now is to go on with my life," he added.
The case is USA v. Goncalves et al, in U.S. District Court for the District of Columbia, No. 09-cr-335.