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U.S. v. Herbert Steindler, Rami Dotan and Harold Katz

 
:
General Electric - Dotan, Rami
:
DOJ Criminal
:
March 17, 1994
:
U.S. v. Herbert Steindler, Rami Dotan and Harold Katz
:
U.S. v. Herbert Steindler, Rami Dotan, and Harold Katz (S.D. Ohio 1994).
:
Aerospace/Defense
:
Israel
:
1984; 1986; 1986; 1987; 1988; 1989; 1990
:
Israeli military officers.
:
From 1984 until 1990, Dotan, a General in the Israeli Air Force (IAF), conspired with co-defendants Steindler, an international sales manager of General Electric Company (GE), and Katz, an attorney practicing in Israel, to divert and launder approximately $11 million from contracts between GE and the government of Israel. The contracts, which were for sales of IAF jet fighter engines and maintenance equipment and services for the engines, were all financed by the U.S. government through the Foreign Military Financing (FMF) program. It was Dotan's duty as an IAF officer to oversee the purchase and maintenance of the IAF engines.

The three defendants carried out the conspiracy by (1) inducing GE to select a particular Israeli firm, Ingbir Engineering, to perform all subcontract work in Israel, knowing that its owner would cooperate with the scheme, (2) fabricating a sham funding agreement for a flight test, and (3) selecting GSK Management Consultants, Inc. (GSK), a New Jersey corporation owned by Steindler's business associate and friend, as a subcontractor that would provide funding for the sham agreement. Dotan and his co-defendants arranged for payments related to all three of the above to be made to GSK, which would in turn retain a portion or substantially all of GE's payments to be transmitted to European bank accounts. The three defendants shared the proceeds of the diverted funds.

In an 89 count indictment, the grand jury charged Steindler with six counts of violating the FCPA bribery section. Steindler and Dotan were charged with one count of violating the books and records sections of the FCPA and one count of making false claims and statements. Sixteen counts addressed mail fraud, six alleged wire fraud, one alleged conspiracy to commit wire fraud, and 57 counts charged the three individuals with money laundering.

Steindler pled guilty to three counts of conspiracy, wire fraud, and money laundering and was sentenced to 84 months’ incarceration and a forfeiture of $1,741,453. Dotan was convicted before an Israeli Special Court Martial and sentenced to 18 years of imprisonment, reduced in rank from General to Private, and discharged from the Israeli Armed Forces. Katz remains a fugitive.

The criminal acts of the three defendants also resulted in a criminal and civil proceeding against GE. On July 22, 1992, GE waived indictment and pled guilty to four counts: (1) conspiracy to defraud the United States and to commit offenses against the United States, (2) submitting false claims against the United States, (3) engaging in monetary transactions in criminally derived property in violation of the Money Laundering Control Act, and (4) failure to keep accurate books and records in violation of the FCPA. It also agreed to pay a total of fine of $9,500,000 and a special assessment of $800. On the same day, GE settled the civil action filed by the the United States on behalf of Taxpayers Against Fraud alleging violation of the Civil False Claim Act, and agreed to pay $59,500,000 to the United States.
:
Books and records (Individual)
:
Conspiracy - Wire Fraud, Money Laundering, Wire Fraud
:
Fugitive
:
Dotan was sentenced to 18 years of imprisonment (13 months confinement) by the Israeli Special Court Martial, a reduction in rank from General to Private, and discharged from the military.
:
Not stated.
:
216
:
Other Person
:
Foreign
:
Contract Procurement/Retention
:
300,000,000
:
Wire/check
:
Direct
:
7,875,000
:
United States
:
Belgium, Germany, Netherlands, Switzerland
:
No
:
Israel