The wife of former Guinea President Lansana Conte is helping the U.S. investigate whether a company controlled by billionaire Beny Steinmetz paid bribes to win an iron-ore deposit, a person with knowledge of the probe said.
Mamadie Toure is assisting the U.S. in its investigation of BSG Resources Ltd., said the person, who asked not to be named as the information is confidential. Guinea has accused BSGR of agreeing to pay Toure, and companies linked to her, $5 million to help it win the permit in 2008, according to an Oct. 30 letter to BSGR’s local joint venture and seen by Bloomberg.
Former Mines Minister Mahmoud Thiam and Ibrahima Kassory Fofana, former finance and economy minister, are people tied to the U.S. probe, according to the person. Both reside in the U.S. Jerika Richardson, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, declined to comment on the investigation.
Steinmetz, 57, is Israel’s richest person with a net worth of about $8.5 billion, according to Bloomberg Billionaires analysis. His BSG Investments has interests in mining, real estate and capital markets, according to its website.
“Allegations of fraud in obtaining our mining rights in Guinea are entirely baseless,” Steinmetz’s company said yesterday by e-mail. “We are confident that BSGR’s position in Guinea will be fully vindicated.”
BSGR denied making payments to Toure in a March 15 letter to the government. A call to Toure’s house in Jacksonville, Florida, failed to reach her.
Kassory Fofana, who said he was minister from 1996 to 1999, denied involvement in any wrongdoing in connection with BSGR, saying “I don’t know anything about any payments of any sort” when reached by telephone in Washington, Thiam’s mobile phone was switched off and wouldn’t take messages.
The allegations of bribery follow the arrest of a man alleged by Guinea to have links to BSGR who was charged with plotting to destroy documents and induce a witness to give false testimony to a grand jury investigating potential violations of the Foreign Corrupt Practices Act, according to a criminal complaint filed this week in federal court in New York.
Between March and April 14, Frederic Cilins allegedly offered to pay the witness, described as the former wife of a now-deceased high-ranking Guinea government official, to deliver documents subpoenaed by the jury and documents requested by the FBI so he could destroy them, according to the complaint.
She’s cooperating in the hope of obtaining immunity for her own potential criminal conduct, the complaint states. Toure was the fourth wife of former President Conte, who died in 2008.
BSGR acquired rights to part of the Simandou project, one of the world’s richest iron-ore deposits, after Rio Tinto Group was ordered by the government to give up a section of its license area. BSGR subsequently sold 51 percent of its Simandou stake to Brazil’s Vale SA (VALE5) in 2010 for $2.5 billion.
Guinea last year started its own probe into how Guernsey- based BSGR gained control of the license. The company may have bribed Toure to obtain exploration permits, including for Blocks 1 and 2 at Simandou, Guinea officials alleged in the Oct. 30 letter.
The Guinea government alleged that it had obtained information that BSGR paid Toure $2.5 million and agreed on a contract with her to pay a further $2.5 million for her help in securing the agreements, according to the letter.
“The U.S. indictments may give the Guinean government valuable leverage in its own investigation into the 2008 deal, which could potentially allow it to earn billions of dollars by recovering the rights and improve its battered reputation,” Martin Roberts, an analyst at IHS Global Insight Ltd., said in an April 17 report.
BSGR said last month that Guinea was preparing to strip its joint venture with Vale of its mining rights in the country. The venture’s Simandou development includes a planned $10 billion iron-ore mine.
Vale, the world’s third-biggest mining company, is “deeply concerned” about the allegations and intends to cooperate fully with the governments of the U.S. and Guinea, it said in an April 16 statement.
Cilins, 50, was arrested in Jacksonville on April 14 and faces charges of tampering with a witness, obstructing an investigation and destroying or falsifying records in a federal probe. The obstruction charge carries a maximum penalty of five years in prison, and the record-destruction charges carry a maximum sentence of 20 years.
Guinean Justice Minister Christian Sow said in an April 16 statement issued by the office of President Alpha Conde that Cilins was an agent of BSGR. The company said in an e-mailed statement that Cilins isn’t one of its 6,000 employees.
The federal grand-jury investigation concerns transfers of money into the U.S. from outside the country as part of a scheme to obtain mining concessions in Guinea including in the Simandou region, according to the complaint.
After a military junta took control of Guinea following Conte’s death, BSGR regularly made payments to senior members of the military through Thiam, the mines minister at the time, according to the Oct. 30 letter.
Steinmetz, a Swiss resident with dual French and Israeli nationality, started his career in the family diamond business, Steinmetz Diamonds, which provides rough and polished stones from facilities in Botswana, South Africa, Namibia and New York.
The case is U.S. v. Cilins, 13-mj-00975, U.S. District Court, Southern District of New York (Manhattan).
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