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Enforcement Action Dataset

 

Initiation Date:    06/22/1994  Information

Prosecuting Agency:    U.S. Department of Justice

Name of Prosecuting Attorneys:   

  • Gerrilyn G. Brill, First Assistant U.S. Attorney
  • Martin J. Weinstein, Assistant United States Attorney
  • Janet F. King, First Assistant U.S. Attorney
  • Nicolette Templer, Assistant United States Attorney
  • Polly A. Dammann, Assistant Director, Commercial Litigation Branch, Civil Division
  • Daniel A. Caldwell, Assistant United States Attorney

Assisting Agencies:    Defense Contract Audit Agency , Swiss Ministry of Justice , Egyptian Ministry of Justice , Office of the Egyptian Judge Advocate General for the Cairo District

Type of Action:    DOJ Criminal Proceeding

Docket or Case Number:    94-cr-226

Court:    N.D. Georgia

Origin of the Proceeding:    DCAA Audit

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Lockheed Corporation was a Delaware corporation based in Calabasas, California. Lockheed Corporation manufactured and marketed a wide range of aircraft and armaments, primarily for use in the defense industry.

Lockheed Aeronautical Systems Company, based in Marietta, Georgia, was an unincorporated division of Lockheed Corporation. The primary business of Lockheed Aeronautical was the manufacture of aircraft and associated components primarily for sale to the United States Department of Defense and to foreign governments.

Lockheed Corporation International, S.A. was a Belgian corporation based in Brussels, Belgium, with offices also in Geneva, Switzerland, and Cairo, Egypt, and was a wholly owned subsidiary of Lockheed Corporation. Lockheed International handled Lockheed Corporation's business interests overseas, including oversight of foreign in-country consultants.

Lockheed Corporation, Lockheed Aeronautical Systems Corporation, and Lockheed Corporation International S.A. will be collectively referred to as "Lockheed."

Suleiman A. Nassar was the Regional Vice President of Lockheed International. Nassar's responsibilities included oversight of international consultants promoting the sale of Lockheed's products in certain areas of the world, including Egypt.

Allen R. Love was the Director of Middle East and North Africa Sales at Lockheed Aeronautical. Love's responsibilities included supervising Lockheed Aeronautical's marketing efforts in Egypt, which included working with Lockheed's in-country consultant in Egypt from 1980-1990, and working with Lockheed Aeronautical's Finance Department in arriving at a sales package that both Lockheed Aeronautical and the Government of Egypt would accept.

Between about April 20, 1987 and November 8, 1990, Lockheed made multiple payments to its in-country consultant in Egypt, Dr. Leila I. Takla, a member of the People's Assembly of Egypt, so that she would use her position to influence Egypt to purchase aircraft from Lockheed. The payments were initially made directly to Dr. Takla, but starting sometime in 1987, the payments were made to Dr. Leila Takla, Incorporated, a company set up specifically to facilitate Dr. Takla's status as a consultant to Lockheed while simultaneously serving in the People's Assembly. As part of their agreement, Lockheed paid Dr. Takla a monthly retainer fee, which between April 1987 and August 1990 totaled $129,000. Separately, Lockheed agreed to pay Takla $600,000 in commission for each Hercules aircraft sold to Egypt. On April 15, 1989, Lockheed entered into a contract with Egypt to sell the country three Hercules aircraft at an aggregate sales price of $78,983,575. However, this contract price was later reduced by $1.8 million because of a contract clause prohibiting the payment of commissions on the contract. Though by the terms of their agreement, Dr. Takla was owed $1.8 million in commission payments based on the purchase of the Hercules aircraft, the subsequent discovery of the commission payments led Lockheed to seek a termination of its agreement with Dr. Takla. Their agreement was thus renegotiated, and Lockheed paid Dr. Takla $1 million as a termination payment.

On June 22, 1994, the DOJ filed a nine count Indictment in the Northern District of Georgia against Lockheed, Nassar, and Love alleging (1) conspiracy to violate the anti-bribery and books & records provisions of the FCPA and conspiracy to commit wire fraud, (2-8) direct violations of the anti-bribery provisions of the FCPA, and (9) direct violations of the books & records provisions of the FCPA. On January 20, 1995, the DOJ filed a one count superseding Information against Lockheed alleging conspiracy to violate the anti-bribery and books & records provisions of the FCPA. On the same date, the DOJ filed a one count superseding Information against Love alleging making and aiding and abetting the making of false statements.

On January 20, 1995, Love entered into a Plea Agreement with the DOJ. Under the terms of the agreement, Love pleaded guilty to the false statements charge and agreed to pay a fine of $20,000 and serve 3 years of probation. On January 27, 1995, Lockheed entered into a Plea Agreement with the DOJ. Under the terms of the agreement, Lockheed pleaded guilty to the single count of conspiracy to violate the anti-bribery and books & records provisions of the FCPA and to pay a criminal fine of $21.8 million plus a civil fine of $3 million plus a mandatory assessment of $200. On September 12, 1995, Nassar entered into a Plea Agreement with the DOJ. Under the terms of the agreement, Nassar agreed to plead guilty to count 2 of the original Indictment (a direct violation of the anti-bribery provisions of the FCPA), to pay a criminal fine of $125,000, and to serve whatever time the court deemed appropriate in prison. On October 5, 1995, the court sentenced Nassar to 18 months in prison plus 2 years of unsupervised release following his imprisonment and a fine of $125,000 plus a mandatory assessment of $50. The court also credited Nassar 153 days against his imprisonment for time spent in Syrian prisons in 1994.

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