(Adds details of court hearing, background, case citation,
By Joseph Ax
July 25 A former adviser to mining giant BSG
Resources was sentenced in New York federal court on Friday to
two years in prison for obstructing a criminal probe in
connection with a bribery investigation in Guinea.
Frederic Cilins, a French national, pleaded guilty in March
to one count of obstruction and admitted attempting to bribe
Mamadie Toure, a widow of former Guinea President Lansana Conte,
so she would leave the United States to avoid questioning by
Cilins was charged as part of a U.S. probe into potentially
illegal payments made to Guinean officials to secure rights to
half of one of the world's largest untapped iron ore deposits
for BSG Resources (BSGR), the mining arm of Israeli billionaire
Beny Steinmetz's conglomerate.
BSGR has denied any wrongdoing.
The investigation eventually prompted Guinean officials to
strip the concessions from BSGR and its partner, Brazilian iron
ore mining company Vale SA, after a
government-appointed committee accused BSGR of obtaining them
through corrupt means.
BSGR has accused officials of improperly trying to wrest
away its rights to the northern half of the Simandou mine. The
company is seeking arbitration at the International Centre for
Settlement of Investment Disputes.
Developing Simandou would offer an enormous boost to the
Guinean economy, but the project has suffered delays because of
disputes over the mining rights.
Last month, Guinea's national assembly ratified an
investment framework agreement with global miner Rio Tinto
, its Chinese partner Chinalco and
International Finance Corporation to raise nearly $20 billion to
revive the project. First production from Rio
and Chinalco's southern half of Simandou, however, is at least
four years away.
The government is also planning to open a new auction to
grant the rights stripped from BSGR and Vale for the northern
part of the deposit. Guinean officials have said Vale did
nothing wrong and encouraged the company to bid again.
At Friday's hearing, Cilins apologized to U.S. District
Judge William Pauley for his actions and to his family for
causing them pain.
Pauley said Cilins' crime "strikes at the very foundation of
the sound administration of justice," but declined to impose a
sentence of more than three years, as prosecutors had requested.
Cilins, 51, was accused of offering to pay for Toure's
flight to leave the United States to avoid answering federal
investigators' questions. Unbeknownst to Cilins, Toure was
working as an informant for the U.S. government.
In a taped phone conversation, Cilins told Toure: "That has
to be destroyed very urgently," referring to documents tied to
the alleged payments, prosecutors said.
The case is U.S. v. Cilins, U.S. District Court for the
Southern District of New York, No. 13-315.
(editing by Gunna Dickson)