Smith & Wesson Executive Indicted

A Smith & Wesson Holding Corp. sales executive and a former Secret Service official were among 22 officials at companies that supply law enforcement and the military who were charged with violating U.S. anti-bribery laws.

Amaro Goncalves, vice president of sales at Smith & Wesson, and R. Patrick Caldwell, chief executive officer of Protective Products Of America Inc. and a former deputy director of the U.S. Secret Service, were among the individuals indicted for engaging in schemes to bribe foreign officials, Assistant U.S. Attorney General Lanny Breuer said today in a statement.

The indictments, which name only the individuals and not the companies they work for, stem from a Federal Bureau of Investigation undercover operation that focused on bribery allegations in the military and law-enforcement products industry, Breuer said. Yesterday, 21 defendants were arrested at a convention in Las Vegas and one was arrested in Miami, the government said.

The indictments unsealed today in Washington represent the largest single investigation and prosecution against individuals under the Foreign Corrupt Practices Act, the Department of Justice said. The law prohibits U.S. citizens and companies from paying bribes to foreign officials to gain business. The indictments were returned Dec. 11 by a grand jury in Washington.

“This ongoing investigation is the first large-scale use of undercover law enforcement techniques to uncover FCPA violation,” Breuer said.

The defendants in the case engaged in a scheme to pay bribes to the minister of defense for a country in Africa, according to the indictments. In fact, the scheme was part of an undercover operation, with no actual involvement from any government official or the country, the Justice Department said.

As part of the operation, the defendants allegedly agreed to pay a 20 percent “commission” to a sales agent who the defendants believed represented the African defense minister to win a portion of a $15 million deal to outfit the country’s presidential guard, the government said. In reality, the “sales agent” was an undercover FBI agent, prosecutors said.

Paul Pluff, a spokesman for Springfield, Massachusetts- based Smith & Wesson, didn’t immediately return a phone call seeking comment. Goncalves is listed on the company’s Web site under law enforcement administration.

Neil Schwartzman, a spokesman for Sunrise, Florida-based Protective Products, also didn’t immediately return a call.

Justice Department officials are holding a briefing for reporters in Washington on the charges.

–Editors: Mary Romano, Glenn Holdcraft.

To contact the reporters on this story: Cary O’Reilly in Washington at +1-202-624-1859 or caryoreilly@bloomberg.net; Justin Blum in Washington at +1-202-624-1861 or jblum4@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at +1-212-617-1092 or drovella@bloomberg.net.

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