On April 28, 2011, Flavio Ricotti, a former executive of a California-based company that sells valves, pleaded guilty in Santa Ana, California, to one count of conspiring to violate the Foreign Corrupt Practices Act (“FCPA”). From 2001 to 2007, Ricotti was the director and then the vice-president of Control Components, Inc. (“CCI”), which manufactures valves for use in power-generation industries. In this capacity, Ricotti was responsible for overseeing sales in Europe, Africa and the Middle East. Ricotti admitted that in 2003 he conspired with other CCI employees to pay a kickback to an official of a Saudi Arabian state-owned oil company in exchange for a CCI contract to supply valves. Ricotti also admitted that he conspired with other CCI employees to pay a commission to an employee of a private company in exchange for confidential information during a contract bidding process in Qatar to influence the contract award in CCI’s favor. Ricotti admitted that the benefit conferred on CCI as a result of the illegal payments, with which he was directly involved, was more than $400,000 but less than $1 million.
On April 8, 2009, Ricotti and five other former executives of CCI were charged in a 16-count indictment for their roles in the foreign bribery scheme. Ricotti was arrested in Frankfurt, Germany, on February 14, 2010, and extradited to the United States. As part of his plea agreement on the one count charging him with conspiring to violate the FCPA, Ricotti has agreed to cooperate with the government. He faces a maximum of five years in prison. Trial of the other charged CCI defendants is scheduled to begin in October 2011.
On July 31, 2009, CCI also pled guilty to three counts of violating the FCPA and Travel Act. CCI was ordered to pay an $18.2 million criminal fine and was placed on probation for three years. During the three-year probation, CCI was ordered to implement a compliance program and maintain an independent compliance monitor.