FBI arrest S&W Exec and 20 others at SHOT Show!!!!!


An FBI agent posed as a representative of an Africa nation. An S&W executive (and others) attempted to bribe the government official!

WASHINGTON, Jan 19 (Reuters) – An executive of Smith & Wesson (SWHC.O) and 21 others have been charged with violating U.S. bribery laws after an undercover sting in which federal agents posed as arms-buying representatives of an African defense minister.

The defendants, including a senior Smith & Wesson sales official Amaro Goncalves, were accused of violating the Foreign Corrupt Practices Act, or FCPA, and conspiracy to commit money laundering tied to the sale of guns, body armor and other law enforcement equipment.

[ Many thanks to Jeffrey for emailing me the link. ]

UPDATE: S&W make a statement …

SPRINGFIELD, Mass., Jan 19, 2010 /PRNewswire via COMTEX/ — Smith & Wesson(R) Holding Corporation (Nasdaq: SWHC), parent company of Smith & Wesson Corp., today made the following statement in response to Justice Department enforcement actions that were announced today regarding one of its employees.

Through media reports today, we became aware of the Justice Department enforcement actions which were taken yesterday and which made reference to an employee of our company. We have no information beyond what has been reported and are prepared to cooperate fully with law enforcement in their investigation into this matter.


Steve Johnson

Founder and Dictator-In-Chief of TFB. A passionate gun owner, a shooting enthusiast and totally tacti-uncool. Favorite first date location: any gun range. Steve can be contacted here.


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  • Bryan James

    Hoo Hoo Looks like Obama _is_ moving in on guns.

  • dg

    Just what S&W did not need.

  • Matthew

    What in the hell? Thats crazy… Not gonna be good PR for Smith.

  • Brian Plunkett

    WOW I wonder if this will hinder any of their future contracts or did they already get damage control on it.

  • BrassSligner

    I guess the FBI won’t be buying S&W products anytime soon. I’m sure the competition is happy about this.

  • http://www.predatorwild.com Heath

    Ouch. That’s BAD publicity.

  • http://www.mytumultuousadventure.blogspot.com Robert

    Any idea which African nation they thought they were selling too?

  • Steve

    WTF??

    Ok read the story & this investigation has been ongoing for a while. My thought is that the FBI decided to make sure it was a high profile arrest & a warning to others by making it a public spectacle at the SHOT show.

    Did anyone there actually see them getting walked out in cuffs?

    • http://www.thefirearmblog.com Steve

      Steve, I was talking to someone tonight and he saw FBI agents at the show and apparently the S&W booth was almost deserted this afternoon. But I got no photos :(

  • yamalink

    Maybe the S&W guy was just trying to get even for all those email phishing scams…. Dear Sir or Madam, I come to you with many guns, but unfortunately I cannot move them. Would you be so kind as to accept my “Wesson by Smith” revolving bullet thrower?

  • Robert

    I hope this isn’t indicative of S&W’s other business practices as one of americas great gunmakers I’d hate to see them take hit for something like this.

  • p1choco

    Wow. Not good for the firearms community.

  • Florian

    Have you seen this guy hanging around the show: http://www.dailyinfo.co.uk/images/cinema/lord-of-war.jpg

  • Jason

    This will be the butt of jokes for years to come.

  • Oxide24

    Wow!!!

  • DavidR

    WTF?? That’s just surreal…

    Can’t S&W get bonus points for that integral safety lock thing?

  • Kyle Huff

    “The FCPA prohibits the payment of bribes to foreign officials in order to secure business contracts.”

    Why does this exist, exactly?

  • Jim

    This is HUGE. Jesus Christ, this has been a good week for interesting gun news.

  • Kyle Huff

    From the DOJ:

    “Indictment alone can lead to suspension of the right to do business with the government. The President has directed that no executive agency shall allow any party to participate in any procurement or nonprocurement activity if any agency has debarred, suspended, or otherwise excluded that party from participation in a procurement or nonprocurement activity.

    In addition, a person or firm found guilty of violating the FCPA may be ruled ineligible to receive export licenses”

    So, these companies are basically screwed now. Hope you’re not an investor.

  • Sgt King

    Holy crap!! That’s crazy! S&W’s sales are going to suffer majorly because of this, I’m sure. That really sucks for S&W. Leave it to “the few” to screw “the many.”

  • Brian

    Ohhhh….. shit!

  • KP

    I have no idea what to make of this. Never know if it’s a legitimate sting or some kind of entrapment by a government goon with an agenda. :S

  • http://homeplace-artsstuff.blogspot.com/ Arthur B. Burnett

    Greetings from Texas,
    Do the term ‘self inflected wound’ mean anything to these folks? How stupid can you get?
    Then again, not sure I want an answer.

  • RJG

    Press release here: http://ir.smith-wesson.com/phoenix.zhtml?c=90977&p=irol-newsArticle&ID=1376871&highlight=

    Doubt this will help SWHCs ticker much.

    • http://www.thefirearmblog.com Steve

      RJG, thanks for the link.

  • Chris P

    “Why does this exist, exactly?”
    I was thinking the same thing. What a totally useless law. And even if there is a legitimate purpose for such a law, this seems like a clear cut case of entrapment. Surely nobody could argue that the S&W people would have offered the bribe if they hadn’t been asked for it by the government agents. And even if you can get past those two issues, doesn’t the FBI have anything better to do? The article mentions 250 agents for over 2.5 years. Even assuming most of those people weren’t working on this full time, it’s a huge amount of resources used to arrest the alleged perpetrators of a non-violent, victimless crime. Shouldn’t the FBI be out there catching murderers and terrorists?

  • jdun1911

    The Foreign Corrupt Practices Act is design to screw US companies out of foreign contracts. In this case it benefits the Russian, European, and Chinese the most.

  • http://www.alfredivy.per.sg/blogger Alfred

    I thought the LE bureaus don’t do this kind of sting as it gets smack down as entrapment?

  • Carl

    Like Kyle and Chris have pointed out, bribery laws are nonsensical. S&W hasn’t committed any real crime. Who is the victim?

    The crime, if any, is commited by the buying government officials against the tax payers that employ them when they choose their weapons supplier based on the amount of bribes rather than the performance of the products.

    Furthermore, like most people should know by now bribes are standard practice when selling weapons (or anything, frankly) to governments. S&W just happened to get caught.

    Government is the fundamental cause of corruption.

  • http://www.mytumultuousadventure.blogspot.com Robert

    Surely you don’t think the FBI won’t claim that by making these arrests that they’ve prevented murderers and terrorist from buying weapons?

  • Dlw

    Apparently the FBI has nothing else to do now that Barry (aka Barack hussein obama) is occupying the white house.

    Fortunately the ft hood terrorist and the underpants bomber are being treated as enemy combatants and being interroated for all their info by the CIA ….. Oh wait – their case in civil coutvis being handles by us prosecuters and the FBI is supposed to provide evidence….

    Nope Barry has them posing as his baby daddy chasing S&W guys.

  • Roy

    “Shouldn’t the FBI be out there catching murderers and terrorists?”

    Who do you think are the recipients of such kickbacks? African kindergarten teachers that use the extra funds to buy extra lunches for the kids?

    And as for “victim-less crime”, the victims are the tax payers of the African nation in question – and I doubt they have that much money to begin with.

  • Klein

    “The defendants, including a senior Smith & Wesson sales official Amaro Goncalves, were accused of violating the Foreign Corrupt Practices Act, or FCPA, and conspiracy to commit money laundering tied to the sale of guns, body armor and other law enforcement equipment.”

    So, in other words, they did what the Federal State does all over the world every day, and got in trouble for it. Maybe this is a good precedent.

    Entrapment. Nice. That’s all right.

  • Some _Guy

    The FCPA is a law which was enacted in 1977 following a rash of scandals involving companies which paid bribes to foreign officials in order to be allowed to do business in their countries. The real issue was the financial reporting of these bribes. The law essentially dictates that you should not pay bribes. But if you do… they had darn well better be on your financial statements as “Bribery Expense”. This generally does not look good to investors, so it has proven a moderately effective deterrent to these kinds of activities. However, there are apparently still those who try to get around this. As is evidenced by this story.

  • Vitor

    This reminds me of those case of cop goes to a male restroom, pretends to be gay, ask if somebody wants a blowjob, if the the other dude says “yes”, he gets arrested.

  • m4shooter

    This is just Eric Holder’s way of crashing a party that he didn’t get invited to. Oh, and it’s one big F-U to the firearms community.

    The FCPA is total garbage — and not just in the realm of firearms. It’s a law enacted by America to prosecute (primarily) Americans for playing by the same rules that the rest of the world plays by. Anyone who has lived or worked overseas knows what I’m talking about.

  • Tux

    S&W has a lot to lose here if they end up unable to do business with the government. IIRC they supply handcuffs and leg-irons to the military and have an ongoing contract supplying M&P 9’s to the Iraqi national police.

  • Jim

    I’m shocked at all the racism and ignorant politics being spewed in these comments on a board that’s tagline is “firearms not politics”.

    Let’s address a few things:
    1. This law is meant to prevent U.S. companies from supporting (even inadvertently) corrupt warlords. Permitting the sort of kickbacks that S&W were busted for promotes corruption and the formation of a governmental elite in these developing countries, which encourages dictatorship and hamstrings democracy.

    2. Smith and Wesson was not picked up on some minor technicality by the [insert racist term] president and his [insert different racist term] AG who are trying to discourage American business and American gun owners. S&W blatantly violated a major ethics law, and deserves to be punished for it.

    3. If the FBI entrapped the S&W execs in question were entrapped they will have a solid defense at trial. If not, let them rot in prison. The FBI is by no means stupid, and setting up a string is not always the same thing as entrapment. Entrapment is a legal term, not a pejorative.

  • El Duderino

    “Bribery Expense?”

    Sheesh. What’s next, “Took Prospective Client to Lunch and Liquored Him Up so He’d Sign the Contract Expense?”

    We have bribery here in the US, it’s just more subtle. Unless you’re a politician — then it’s called “campaign contributions.”

  • MissionMagnet

    I dont think Smith will be held accountable directly for the actions of this individual, until further investigation proves otherwise. It sucks that such a reputable company will be drug through the mud along side the perpetrators. But rest assured, with the A team that is in office right now, any American involved will be crucified and blasted across every media network in the world, while they apologize to the African nation on our behalf.

  • Angela

    They were all arrested off site…NOT at the Shot Show. Im an exhibitor and just walked past their booth and it was packed…but that is the entire show!

  • c. Trapp

    @Jim Thank you. I too found the notion “Corruption is fine because, you know, the others do it also and it’s a victimless crime anyway.” mildly disturbing.

  • seeker_two

    http://www.thefirearmblog.com/blog/2010/01/20/fbi-arrest-sw-exec-and-20-others-at-shot-show/#comment-24224

    ” We have bribery here in the US, it’s just more subtle. Unless you’re a politician — then it’s called “campaign contributions.” ”

    Maybe S&W should have listed the bribes under that….or as “union contributions”….

    …so, when will we see FBI busts at the Detroit Auto Show and the AFL/CIO conventions?….

  • http://www.nitroexpress.com Mehul Kamdar

    While one Smith and Wesson executive and some others offered money (possibly a share in their bonuses?) to the FBI agents posing as African buyers, I haven’t seen any report – not even in the notoriously anti gun New York Times – that held Smith and Wesson responsible as a company for what happened. In several industries sales agents routinely share their commissions with buyers – who hasn’t seen a realtor’s advertisement offering payback from his / her commission? – and it is possible that the S&W sales representative here was trying to do something similar before falling afoul of the law restricting this practice in foreign contracts. Either the sales representatives here did this knowingly or they were ignorant of the law. The FBI’s investigation of company documentation and of communication between the sales representatives and their superiors will show to what extent the companies concerned were involved in this breaking of the law. Until then, it would be wise not to enter into hasty judgments about any company and its business practices. Calling Smith and Wesson names because one of their salesmen happens to be either an idiot or a crook is as stupid as tarring entire communities with epithets because you don’t like a particular individual who belongs to that community.

  • Jeff

    I’m not really shocked, although there are some big names there, this kind of thing likely goes on behind closed doors more than we care to think.
    It will just help out the other companies a bit now that S&W is knocked down a few more pegs. I’m sure they will appreciate new business.
    Hey, they did the crime, they do the time, which is, what, 20 years for bribery?

  • info peeps

    doesn’t really matter if S&W knew about it or not, if you work there, you are working on their behalf, so you screw up, the company gets in crap for it, just like any other business.
    businesses like that better clean up their employee base, get rid of the crooks or go down the toilet in this economy.

  • akp

    wow this thread is strong with the stupidity. interesting how some see violating some laws as ok but see violating other ones unacceptable. if you have a problem with a certain law you should try and get it change instead of moaning and whining like a school girl.

  • BNaku

    I used to work at Cav and I can tell you that I am glad I got out when I did. I always knew Wayne Weisler was a crook, just did not know how bad it really was. I can assure though this is not the first bribe or illegal transaction committed by Wayne or his companies, US Cavalry or Armorshield. Hey FED’s check their files…U will find more. I am disappointed with S&W but I knew Cav was bad, that is why I left…Hope know ones buys from them again and hope the FEDs throw the book at Wayne and his Execs…

  • m4shooter

    @Jim, where do you get this?:

    “This law is meant to prevent U.S. companies from supporting (even inadvertently) corrupt warlords.”

    Neither the statute itself, nor the House and Senate reports say anything about warlords. Consider the fact that the FCPA was enacted in the wake of scandals in Japan and western Europe (where there are no warlords).

    I know this is treading too far already into politics, but blatant misinformation needs to be addressed.

  • Jim

    m4shooter regardless of the original intent that is the purpose that the law is serving here.

    The federal site says “Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system.” Sounds like a pretty general purpose law.

    http://www.justice.gov/criminal/fraud/docs/dojdocb.html

  • Rob

    I agree with others if some businesses empoyees would share ther profits to a midlleman representing the buyer, that is standard to most businesses if that middleman would ask for their commission, and also,

    shouldn’t the FBI or other Gov. Agencies sting anyone, he or she who holds a Public Office that requires proof of US citizenship and could not produce one and disquality that Official from further holding office, as required in the US Constitution.

  • Apollo2010

    @Jim, well said, good to know there’s at least a couple of people here who can think rationally and morally.

    @m4shooter, do speeding laws, for example, say you can’t drive over X MPH because your stopping distance will be reduced and the odds of causing a fatal injury are far higher due to the increased momentum that would be transfered? No. The say, “this is the limit”. Laws are the rules to be followed, not the reasons or morality that underpin them. Jim is explaining part of the reasoning behind the law, not stating the law itself. Granted, preventing dictatorships is not the only reason, but i would bet it was a consideration given the proportion of bribery that takes place in poor countries. Think, then write.

    i would like give my 2c’s too. Sorry, to be negative, i generally do enjoy the opinions up here, and FAB is my favourite blog. However i do have to say something about some of the frankly dim witted views expressed here, even from individuals i might otherwise listen to. I think people have taken it as an attack on the 2nd ammendment or something, when it’s actually protecting the democracy we all so value, something that seems to be completely missed by so many.

    “it’s a huge amount of resources used to arrest the alleged perpetrators of a non-violent, victimless crime.”

    – It is far from victimless. it leads to and encourages corrupt 3rd world governments which in turn can lead to poverty and starvation, and is primarily facilitated by 1st world companies and governments, who have the money to buy the resources and contracts (and governments) they want. i.e. it is anti-democratic. Fine, doesn’t affect democracy in the US. But then you can’t spout anything about having moral values to the rest of the world, and accept the potential repurcussions of facilitating, what for all you know could be a genocidal regime in Africa (take a look how corrupt the countries that breed the most terrorist are). Not only that, but it is related to reciprocal agreements with competitor countries, such as UK. Take the BAE incident with Saudi Arabia – i think you’ll find US authorities were very interested in this as it could well have impacted negatively on US trade. Self protection is a very important factor, even if in a short term view it obviously isn’t.

    “Shouldn’t the FBI be out there catching murderers and terrorists?”

    – This is the Federal Goverment bringing 36 months of investigation to complete fruition. Bribes are bribes. They are not legal within our judicial system. So, should we change the law so they are legal? Or should we be selective over which laws we’ll enforce? I don’t think that the Federal Agents after this bribary case (who specialize in white collar crimes) are resources taken away from fighting terrorism. Bribery has no place in a modern and democratic society. These agents are protecting the fundamentals of what our society should be, protecting what the terrorists aim to destroy.

    “Furthermore, like most people should know by now bribes are standard practice when selling weapons (or anything, frankly) to governments. S&W just happened to get caught.”

    – So, it’s ok to break the law, just don’t get caught? Seriously? on the one hand you want to ignore some of the laws that have been fought for, and yet would fight to the death for the second ammendment?? Moron.

    “Government is the fundamental cause of corruption.”

    – I don’t disagree. But you seem to have suggested that it’s ok anyway?? It is also the number one cause of global ill will towards the US, and if you ever want that view to change, you need to change how you treat the rest of the world, especially the poorer countries where it eventually leads to breeding terrorism. Fighting the root causes will help stop terrorism, catching a guy with a bomb down his pants will only stop one attack.

    We all know ignorance is no excuse in the eyes of the law. If you conduct international deals, it’s probably a good idea to know the law too, especially given the potential punishments.

    “Firearms not Politics”! :)

  • m4shooter

    @Apollo2010: You can use all the post facto reasoning you want, it’s not going to change the fact that @Jim said that the reason the law was enacted (and he only gave one) was to prevent support to warlords. I was addressing that statement alone, because it was clear he does not know what he is talking about there. This is another example of laymen attempting to become internet experts. You can write 10 more pages of comments, and throw in zingers like “Think, then write” to distract from your lack of facts, but you still will be groundless on that point.

    As for all the people on their moral pedastals, how many of you have lived and had meaningful business dealings in Europe, or anywhere overseas for that matter? My guess is not many, or none. I do not condone bribery, but I know from personal experience that it is a fact of life in Europe. It goes all the way from the top of the food chain down to the lowly Italian tax policeman who gets a free meal each month from the restaurants on his beat.

    I’m not debating morality, I’m just saying that no one else is playing by the rules that the American government sets for its own citizens and companies. And that fact makes it that much easier for American businesses to routinely lose “bids” against foreign companies that don’t have to play by such rules.

  • Carl

    Just some quick general responses (the quoted arguments are not verbatim, just the general gist as I read them):

    “You should never break laws.”
    No, it is sometimes ok to break morally bankrupt (ie evil) laws. If you disagree I would suggest studying history. Whether this argument covers this particular law is the question.

    “The african taxpayers are victims.”
    Fair enough, but the criminal is not Smith & Wesson. The criminal is the African politician betraying his duty to his taxpayers.

    “The United States Government should defend African tax payers.”
    Really? Is this a moral or a legal imperative? Do the affected Africans have representation in the USG?

    Apollo2010: You assume too much, and most of it erroneously.

    • http://www.thefirearmblog.com Steve

      If you play with fire you are gonna get burnt.

  • Tim

    Well this has to be one of the largest eye opening event in international gun sales ever.My family works for Colt and informed me about the arrest at the gun show.it unfortunatley will hurt all the wrong people.those of us who have a love for fire arms will pay for those few trying to get over on the system.S.W. should be held totaly responsible for those employees actions.this is just another example of big business thinking theyre above the law.

  • Jimbo

    Some people use asphyxiation to enhance their sexual experience. I think the A.G. reviews videos of the “sting” while he is whacking it and that it what does it for him. As for his employer, there is enough info on the internet to draw your own conclusions.

  • J.R.

    Sandy Berger destroys secret papers from the National Archives and gets a slap on the wrist. The Chinese now target America with nukes thanks to Loral Corp. and Bill Clinton.

    Barney Frank, Chris Dodd, Jamie Gorelick and Franklin Raines are over their heads in the Freddie and Fannie “fraud of the century”.

    How about ACORN, how about treason, how about that hospital kickback thing with Obama and his wife when her salary increased to $364,000 from $161,000 just because he was elected to the Senate. Did he kickback sums to that hospital?

    What about Charlie Rangel’s tax evasion? Where is the FBI? Where have the buried that justice lady? You know, the one with the scales and the blindfold?

    May I submit that the blindfold is currently on the FBI and the scales are a skin condition of our current commander in thief.

  • Tim

    this is in response to Carl who suggest it the United States responsibility to defend african taxpayers.Carl dont you think the U.S.should first defend the U.S.taxpayers lord knows they have failed badly at that.when did it become the U.S. responsibility to be the police of the world if the African goverment officals are corrupt let them handle it in house.we all know that justice in those countries is far more swift and permanet.as for S.W.as a whole they need to be dealt with swiftly.

  • Carl

    Tim, I did not suggest that the USA should defend africans.
    Someone else suggested it.
    I asked why.
    Please read more carefully.

    Here is my take on international relations:
    The government of country X should defend citizens of country X.
    The government of country Y should defend citizens of country Y.
    The only time government X should interact with citizens of nation Y is if Y attacks X. Otherwise X should leave Y and her citizens alone.

  • Mike Holloway

    Only members of the arms community are targets of this governments law enforcement agencies. 250 agents for 2-1/2″ years!!! come on, WTF!!!! The US Government pays foreign officials daily, it is called FOREIGN AID!!!! The most corrupt program the government has going. No American wantingly pays a foreign official but to do business in any foreign country, the American’s (gov’t or private business) have to pay through the nose. How much did McDonalds have to pay to do business in RED CHINA??? No body knows and I doubt if the FBI is going to check into that. I doubt if the FBI would have put out a dragnet if McDonalds, Burger King and KFC were the culprits. Way to go FBI, score another for the Democratic screw!!

  • tg

    Were all the individuals from S&W or were there other companies involved??

  • mcbbn

    OOPPPS

  • smartacus

    Ay Caramba, senõr Goncalves!
    Guess now’s not the time to congratulate S&W for hiring you, eh?