Among other things, General Electric Company was in the business of developing, manufacturing, and selling aircraft engines and related products and services.
Herbert B. Steindler was an international sales manager for General Electric at the company's aircraft engines facility in Evendale, Ohio. His responsibilities included negotiating and supervising sales to Israel.
Rami Dotan was an Israeli Air Force ("IAF") officer who at various relevant times held the ranks of Lieutenant Colonel, Colonel, and Brigadier General. Among other duties, he oversaw the purchase and maintenance of the IAF's aircraft engines.
Harold Katz was an attorney in private practice in Israel.
According to the allegations in the charging documents, on May 31, 1988, General Electric and Israel entered into the F110 contract, under which General Electric was to provide seventy-five F110-GE-100 engines for IAF F-16 jet fighters, or, at Israel's option, a new engine model then under development, the F110-GE-100A. The total value of the F110 contract (including the option to acquire the F110-GE-100A engine) exceeded $200 million. On July 11, 1988, Israel exercised its option to acquire the F110-GE-100A engine. Steindler and Dotan formulated a plan to divert funds from the F110 contract which entailed the following: (a) fabricating a sham agreement under which General Electric would provide funding for the IAF's flight tests of the engine to be sold under that contract, while, unknown to Steindler's fellow General Electric employees, the IAF would flight test the engine without financial assistance from General Electric; (b) arranging for General Electric to pay the flight test funds to GSK Management Consultants, Inc. ("GSK"), a New Jersey corporation which was controlled by Gary S. Klein, a friend and business associate of Steindler; and (c) instructing Klein to transmit substantially all of these funds to European bank accounts set up for the personal benefit of Steindler and Dotan. A total of $7.875 million was diverted.
On March 17, 1994, the DOJ filed an 89 count Indictment in the Southern District of Ohio against Steindler, Dotan, and Katz alleging (1) conspiracy to commit mail and wire fraud and conspircy to launder money, (2-17) mail fraud, (18-23) wire fraud, (24-80) money laundering, (81-86) violations of the anti-bribery provisions of the FCPA, (87) violations of the books & records provisions of the FCPA, (88) making false and fictitions statements, and (89) forfeiture allgations. Steindler was indicted on all counts; Dotan was indicted on counts 1-76, 87, and 89; Katz was indicted on counts 1, 24-76, and 89.
On July 18, 1994, Steindler entered into a Plea Agreement with the DOJ. Under the terms of the agreement, Steindler pleaded guilty to conspiracy, wire fraud, money laundering, and use of the mail in aid of racketeering (the last charge was pursuant to a separate information). Steindler was sentenced to 84 months in prison and ordered to pay $1,741,453 in forfeiture plus a mandatory assessment of $200. The court dismissed the remaining charges against Steindler later that year.
On February 23, 2016, the indictments against Dotan and Katz were dismissed.
Dotan, however, pleaded guilty in an Israeli court martial to charges of taking bribes and kickbacks worth more than $10 million in connection with the conduct alleged in this action. Dotan also pleaded guilty to charges that he tried to arrange the murder of the man who first exposed the bribery scandal. That murder did not happen. As part of his plea agreement in Israel, Dotan agreed to be imprisoned for 13 years, to pay back his ill gotten gains, to be demoted from the rank of brigadier general to private, and to be dishonorably discharged from the military.
After spending thirteen and a half years in prison, Dotan was released in 2002.
