Man With BSG Link Shouldn’t Get Bail in Probe, U.S. SaysPatricia Hurtado and Andrew Harris
A French citizen with ties to BSG Resources Ltd. who’s accused of interfering with a U.S. grand jury probe into bribes paid for mining rights in Guinea shouldn’t be released from custody because he may try to flee, federal prosecutors said.
Frederic Cilins, 50, described by the African nation’s Justice Minister Christian Sow as an agent of BSGR, was indicted in April by a U.S. grand jury in New York on counts of witness tampering, obstruction of a criminal investigation and alteration or destruction of records in a federal probe. BSGR is controlled by billionaire Beny Steinmetz, Israel’s richest person, according to data compiled by Bloomberg.
The evidence against Cilins “is overwhelming,” Assistant U.S. Attorney Elisha Kobre told U.S. District Judge Kimba Wood in a filing yesterday opposing a bail modification request. A hearing is scheduled for June 20.
Cilins is accused of tampering with an investigation into possible violations of the U.S. Foreign Corrupt Practices Act.
Prosecutors said in court papers that Cilins had identified himself as a representative of an unnamed “business entity” in the mining industry. The government described the entity as “a Switzerland-based mining conglomerate,” with operations in 12 countries and “over a billion dollar annual revenue,” citing its website. That information matches BSGR’s website.
The mining company has said Cilins wasn’t one of its employees and said allegations concerning how it obtained its mining rights are baseless.
BSGR said in March that Guinea was preparing to strip its joint venture with Vale SA of mining rights in the country. The venture is planning a $10 billion iron ore mine in the country at Simandou. The dispute intensified amid a government review into the agreements signed with mining companies.
Cilins pleaded not guilty before U.S. Magistrate Judge Frank Maas on May 15. His release was conditioned on his posting a $15 million personal recognizance bond backed by $5 million in cash or property, restrictions on his travel, electronic monitoring and the surveillance by a 24-hour guard.
Michelle P. Smith, an attorney for Cilins, last week filed papers asking Wood to change those terms, saying her client couldn’t meet them.
The financial requirements and an additional condition that five financially responsible parties act as co-signers “is tantamount to no bond,” she said. Smith offered as security an unencumbered property she said is worth $3.6 million, while agreeing to the other restrictions on Cilins’s freedom.
Smith didn’t return an e-mail seeking comment on the government’s court filing.
Cilins has “by his own admission, access to substantial assets in the millions of dollars and he has extensive international travel and connections,” Kobre said.
The prosecutor’s filing also provided new details about Cilins’s case.
In addition to the U.S. probe, the government of Guinea is investigating whether BSGR obtained the Simandou Concession by paying bribes to former officials.
The entity “stands to lose the Simandou Concession -- worth billions of dollars -- depending in part on the result of the ongoing corruption investigation by Guinean authorities,” according to the filing.
Prosecutors said Cilins tried to bribe a cooperating witness, who was at the time the wife of the then-president of Guinea, allegedly offering $12 million to be shared among her and any other Guinean ministers or officials who might be needed to secure the sought-after mining rights.
Mamadie Toure, the wife of former Guinea President Lansana Conte, is the witness cooperating with the U.S. probe, according to a person with knowledge of the investigation. Toure was the fourth wife of Conte, who died in 2008.
“The relationship between the entity and its affiliates and the CW -- including the payment of millions of dollars in connection with the entity’s efforts to obtain various mining rights in Guinea -- continued for years and is reflected in a series of contracts between the CW and the CW’s company and the entity or its affiliates,” according to Kobre’s filing.
“It is these contracts, evidencing payments for the purpose of obtaining valuable mining rights in Guinea, among other things, that Cilins offered money to the CW to ‘urgently destroy,’” the prosecutor said. Cilins also allegedly asked her to sign a false statement.
Sow, the Guinean justice minister, said in an April 16 statement issued by the office of President Alpha Conde that Cilins was an agent of BSGR.
The case is U.S. v. Cilins, 13-cr-00315, U.S. District Court, Southern District of New York (Manhattan).