FBI arrests 21 in Las Vegas in undercover bribery probe

FBI agents arrested 21 people in Las Vegas as part of a 21/2-year undercover investigation into a bribery scheme involving the international sale of weapons, ammunition and other military and police equipment, the Department of Justice announced Tuesday.

The 21 were arrested Monday as they prepared for the 2010 Shooting, Hunting & Outdoor Trade Show at the Sands Expo & Convention Center, which started Tuesday. A 22nd defendant was arrested in Miami, federal authorities said.

The defendants, who were executives and employees of 16 companies that supply military and police, had no apparent local connections beyond their presence in Las Vegas for the convention. Investigators would not reveal where the arrests took place.

According to the indictments unsealed Tuesday, the defendants arranged to sell their goods, including pistols, rifles, grenades and bulletproof vests, to outfit the presidential guard of an African country.

As part of the sales they agreed to inflate their prices 20 percent as a "commission" to a sales agent, but the commission was intended as a bribe for the country's minister of defense to help secure a bigger contract, according to the indictments.

The sales agent was an undercover FBI agent, and no defense minister was involved. Several of the indictments disclosed that at least one other FBI agent was operating under cover, posing as a procurement officer for the ministry of defense of the African nation.

The Justice Department called the case the largest single investigation and prosecution in the history of the 1977 Foreign Corrupt Practices Act, which bars bribery of foreign government officials. It also is the first large-scale use of an undercover operation in enforcing the act.

The 21 people arrested in Las Vegas appeared in federal court here Tuesday to hear the charges against them.

Inside the packed courtroom of U.S. Magistrate Judge Peggy Leen, lawyers, federal agents and observers sat shoulder to shoulder throughout the three-hour hearing, which was delayed several times so deputy U.S. marshals could move the handcuffed defendants in and out of the courtroom in waves.

The defendants worked for companies in eight states and businesses in the United Kingdom and Israel. Five were citizens of the United Kingdom, two were from Israel and one was from Peru.

Leen released 13 of the defendants, most with conditions such as surrendering their passports and paying bonds. They must appear Feb. 3 in federal court in Washington, D.C., where the case is being prosecuted.

Federal prosecutors asked that the remaining eight defendants remain in detention pending trial based on their wealth, overseas ties or both. Detention hearings for three were scheduled for today and for the other five for Thursday.

At the Shooting, Hunting and Outdoor Trade Show on Tuesday, attendees who were interviewed while they checked out handguns and rifles on display said they were unaware of the arrests but were shocked to hear about them.

Medal of Honor recipient Sammy L. Davis, whose heroic actions during the Vietnam War were portrayed in the 1994 movie "Forrest Gump," lauded the FBI's sting operation.

"Well, God bless the FBI for doing their job," Davis, of Freedom, Ind., said while strolling the exhibit floor with his wife, Dixie.

"There is nothing broken in this nation that we cannot repair," the 63-year-old, retired sergeant first class said, wearing his dress blue uniform with the Medal of Honor strapped around his neck.

"That's what America is all about. That's what my daddy taught me. Stand up and do what's right in your heart."

Two defendants, Daniel Alvirez, 32, and Lee Allen Tolleson, 25, are the president and acquisitions director for one exhibitor, ALS Technologies, Inc., of Bull Shoals, Ark. Workers at the ALS booth declined comment.

A statement posted on the company's Web site acknowledged that two of its employees were indicted and arrested, and that the company was one of several served with an FBI search warrant regarding international transactions. It reads: "ALS did not appear to be the focus of the investigation and fully cooperated with authorities."

An official at the Smith & Wesson booth declined to discuss the arrest of Amaro Goncalves, 49, vice president of sales for the Springfield, Mass., firearms manufacturer.

Contact reporter Brian Haynes at bhaynes@reviewjournal.com or 702-383-0281. Review-Journal reporter Keith Rogers and the Associated Press contributed to this report.