American Eurocopter has pleaded guilty in a US federal district court to charges of fraud and making false statements to the US Government in connection with commissions paid to an Israeli businessman which related to the sale of helicopters to Israel.
The Israeli individual represents US defence contractors in connection with sales to the Israeli Government. An indictment handed down by a federal grand jury charged that he and two others, including American Eurocopter president David Smith, conspired to defraud the US Government by illegally obtaining foreign-military- financing (FMF) funds.
The matter relates to a $50 million 1993 deal to supply eight Eurocopter AS365N Dauphin helicopters to the Israeli navy for anti-submarine operations. The USA paid part of the cost under the FMF programme.
To settle the dispute, Eurocopter agreed to pay $24.4 million in criminal and civil penalties: a $11.7 million fine for violating contracting regulations and $12.7 million in restitution.
Eurocopter says that the guilty plea has helped to avoid "lengthy litigation". American Eurocopter adds that the agreement required American Eurocopter "-to plead guilty to two counts related to certifications to the Government regarding commissions to a foreign national".
The company adds that the company "-deeply regrets these violations and is instituting a strict internal compliance programme to prevent any future violations".
Smith, who stepped down as president to prepare for his day in court on 11 February, had initially called the charges "baseless" before the guilty plea was entered.
Source: Flight International