6 more are charged with paying bribes
A investigation into the bribing of foreign officials that had netted the guilty pleas of two former top executives at an Orange County valve company has widened into charges to include many of the company’s former leaders, the U.S. attorney’s office announced Thursday.
Six former executives of the company were charged with conspiring to bribe foreign officials and others in return for lucrative contracts that resulted in about $46.5 million in net profit, the U.S. attorney’s office said in a statement.
Combining that sum with the profit resulting from bribes by the two former executives who pleaded guilty earlier this year, the U.S. attorney’s office alleges that Control Components Inc. of Rancho Santa Margarita paid out about $8.6 million to foreign officials, which brought the company about $55 million in net profit between 2003 and 2007.
The briberies noted in this week’s indictment of the six former executives allegedly took place from 1998 to 2007, with about $6.85 million spread over about 236 illegal payments to officials in more than 30 countries taking place between 2003 and 2007, the statement said.
In January and February, two former executives of the company pleaded guilty in related cases in which more than $1.6 million was paid to foreign officials, resulting in $8.5 million in profit for Control Components.
The six former executives charged Wednesday are Stuart Carson, 70, former chief executive, and his wife, Hong Carson, 45, the former director of sales for China and Taiwan; Paul Cosgrove, 61, former director of worldwide sales; David Edmonds, 56, the former vice president of worldwide sales; Flavio Ricotti, 47, of Italy, the former vice-president and head of sales for Europe, Africa and the Middle East; and Han Yong Kim, 47, who was the president of the company’s South Korean office, the statement said.
Control Components did not respond to requests for comment Thursday, but a January statement from its parent company, Imperial Metal Industries, said Control Components initiated an investigation in 2007 after discovering “irregular payments” involving trading contracts and it hoped to resolve the matter with the U.S. Justice Department.
The company designs and manufactures service control valves for use in nuclear, oil and gas and power-generation industries worldwide, the statement said.
On Jan. 8, Mario Covino, the former director of worldwide factory sales, admitted to conspiring to bribe foreign government officials with more than $1 million to secure contracts for the valve company.
Richard Morlok, the company’s former finance director, pleaded guilty Feb. 3 to conspiring to bribe officials and causing the payment of about $628,000 in bribes to several foreign state-owned companies, which produced about $3.5 million in profit.
As part of their plea agreements, Morlok and Covino agreed to cooperate with FBI investigators. Covino and Morlok are scheduled to be sentenced July 20, the statement said.
The illegal payments ordered by Covino and Morlok and allegedly the six other former executives were made to officials at state-owned companies including Petrobras in Brazil, China National Offshore Oil Co., the Maharashtra State Electricity Board in India and Abu Dhabi Co. for Oil Operations in the United Arab Emirates, the statement said.
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nathan.olivarezgiles@latimes.com
