A federal judge in Manhattan on Wednesday granted permission for the forensic testing of documents at the center of a foreign bribery investigation involving the Israeli billionaire Beny Steinmetz and multi-billion-dollar iron ore deposits in West Africa.
The case against the defendant, Frédéric Cilins of France, arises out of a high stakes federal investigation into bribery allegations against Steinmetz’s company BSG Resources Ltd. and its dealings in the Republic of Guinea.
Cilins, a former associate of Steinmetz, is scheduled to stand trial in March on charges of witness tampering, obstructing a criminal investigation and attempting to destroy records sought by a federal grand jury looking into Steinmetz and BSGR.
Prosecutors believe Cilins helped negotiate millions of dollars in bribes for officials in the Republic of Guinea on behalf of BSGR, which won lucrative mining contracts in that West African country’s Simandou region. They are investigating the alleged bribes as possible violations of the U.S. Foreign Corrupt Practices Act and money laundering statutes.
Steinmetz, whom prosecutors identified as a co-conspirator in the Cilins obstruction case, has not been charged and has adamantly denied wrongdoing, as has Cilins himself.
Both Cilins and BSGR have maintained that the documents at issue are forgeries and said they should be subject to scientific examination.
The forensic testing would allow both Cilins and Steinmetz to advance longstanding claims that the entire investigation has been manufactured by Steinmetz’s enemies, the billionaire philanthropist George Soros chief among them, in a bid to strip BSGR of the right to mine Simandou’s minerals, valued by one estimate at $50 billion.
Soros has denied the allegation.
Shortly before the death of former Guinean dictator Lansana Conté, BSGR in 2008 won permission to explore a 142-square-mile area in the Simandou region after the government stripped it from the Anglo-Australian company Rio Tinto, the world’s second largest miner.
During the course of the federal investigation, Conté’s fourth wife, Mamadie Touré, a Florida resident, became a cooperating witness.
The documents held in evidence allegedly recorded transactions between BSGR and Touré promising millions to her and other “persons of good will.”
In secretly recorded conversations, Cilins was allegedly overheard by federal agents desperately demanding that Touré destroy the documents.
“This must be destroyed — urgent, urgent, urgent…. You must destroy this very urgent — very, very urgent,” court documents quoted Cilins as telling Touré in one conversation.
Cilins has claimed that the entire transaction was in fact an attempt at extortion by Touré.
In court, prosecutors maintained that the authenticity of the documents is irrelevant. As the conversations with, Touré unfolded, Cilins knew that BSGR was under grand jury subpoena, prosecutors said, and destroying the records under such circumstances is a crime, whether or not they are fake.
However, in his ruling on Wednesday, U.S. District Judge William H. Pauley III of the Southern District of New York said that Touré’s eventual testimony could be undermined if the documents do prove to be forgeries.
“If Touré testifies that she signed the original contracts with BSGR, and forensic testing reveals those contracts to be forgeries, that may tend to suggest Touré has some other, more powerful motive for testifying against Cilins,” Pauley found.
“The authenticity of the contracts is therefore potentially relevant impeachment evidence,” the judge said.
Pauley said Cilins could be permitted to test the documents only if this did not involve destroying them.
It was unclear under what circumstances the testing would occur or whether this too might give rise to more pretrial litigation.
The investigation into BSGR’s activities widened last year to several other jurisdictions, including Switzerland, the United Kingdom and the British Isle of Guernsey, where BSGR is incorporated.
Want to know more? Read on:
The Tycoon, the Dictator’s Wife and the $2.5bn Guinea Mining Deal
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Douglas Gillison
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