With trial only three weeks away, a former associate of the Franco-Israeli billionaire Beny Steinmetz pleaded guilty today to interfering with a federal probe of alleged bribery in the Republic of Guinea.
Frédéric Cilins, a French national who was arrested by federal agents in Florida last year, admitted to a single count of obstructing a criminal investigation by means of bribery, punishable by up to five years in prison.
The last-minute decision reversed what had been a year of resolute denials by Cilins, who was arrested last April on charges of attempting to pay a cooperating witness to lie to a grand jury and help destroy documents under subpoena.
Today’s guilty plea saw prosecutors drop five of the charges against Cilins, significantly reducing any penalty he faces, and agreeing not to seek a sentence of more than 47 months. While the agreement raised questions about his possible cooperation in related cases, Cilins’s plea agreement with prosecutors included no pledge to cooperate in any related investigations or cases.
A spokeswoman for the U.S. Attorney’s Office said she could provide no information on the matter. William J. Schwartz, Cilins lawyer, declined to comment.
Federal prosecutors had identified Steinmetz as a co-conspirator in the case against Cilins, alleging that he was in contact with Cilins as the latter sought to negotiate the destruction of evidence.
Steinmetz has adamantly denied wrongdoing.
No charges have so far been brought against Steinmetz or any BSGR employee or director.
Prosecutors believe Cilins helped negotiate millions of dollars in bribes to officials in Guinea, where in 2008 BSG Resources Ltd. won an iron ore concession in an area where deposits are valued at as much as $50 billion, one of the largest untapped iron ore reserves remaining in the world.
BSGR has repeatedly denounced the allegations as a coordinated “smear” calculated to help strip the company of legitimately held assets, and claimed documents held in evidence are in fact forgeries.
Cilins had advanced similar arguments in court papers, winning permission in January to subject the evidence to forensic examination.
Davidson Goldin, a New York spokesman for BSGR, noted Monday that no charges had been brought against either Steinmetz or BSGR Resources Ltd.
“As we’ve been saying all along, no one from BSGR has done anything wrong,” said Goldin.
In a pretrial motion last month, prosecutors sought to bar Cilins from making the forgery argument and cited FBI wiretaps in which Cilins purportedly discussed the need to destroy any evidence with a cooperating witness.
The cooperating witness is Mamadie Touré, the fourth wife of former Guinean dictator Lansana Conté, who just prior to his death granted BSGR its original mineral concession after stripping it from the Anglo-Australian miner Rio Tinto.
Sentencing is scheduled for June 27.
As a result of the Guinea affair, pressure on Steinmetz has risen considerably in the last year, with authorities in Geneva opening their own investigation, searching his private jet and the offices of an affiliated company, and working in conjunction with criminal authorities in several other countries.
Reuters also reported today that a government committee in Guinea was poised to recommended that the government there strip BSGR and its Brazilian partner Vale SA of the Simandou asset, after a review concluded that BSGR had obtained the concession through bribery.
BSGR had said it was expecting the outcome and has denounced the review, like the pending U.S. investigation, as an unfair attempt to strip the company of its assets in Guinea. BSGR has vowed to fight any attempt to seize the Simandou concession with an international arbitration claim, according to Reuters.
Douglas Gillison
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