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Bribery Newsflash - Company executives jailed over corrupt payments

23/02/2011

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United Kingdom

Bribery Newsflash - Company executives jailed over corrupt payments

UPDATE: The Bribery Act  2010 is now in force. Read more in our dedicated section about how this will impact  your business.

Read more about the Bribery Act >

The former directors and a sales manager of engineering firm Mabey & Johnson Ltd have been sentenced today for providing kickbacks to the Iraqi government of Saddam Hussein. Charles Forsyth, David Mabey and Richard Gledhill inflated the contract price for the supply of steel bridges and disguised illegal payments that were channelled through Jordanian banks.
 
The company, Mabey & Johnson Ltd, entered into a contract under the UN Oil-For-Food Programme to supply 13 steel modular bridges to Iraq. The illegal payments of over €420,000 that secured the contract with the Iraqi government represented 10% of the total contract value.
 
On 10 February 2011, a Southwark Crown Court jury found Charles Forsyth and David Mabey guilty of making illegal payments to Iraq during 2001/02 in breach of United Nations sanctions. Richard Gledhill, who was sales manager for contracts in Iraq, pleaded guilty to sanctions offences at an earlier hearing and gave evidence for the Prosecution. The sentences announced today are:

  • Richard Charles Edward Forsyth, 63, former managing director was sentenced to 21 months imprisonment, disqualified from acting as a company director for five years and was ordered to pay prosecution costs of £75,000.
  • David Mabey, 49, former sales director, to eight months imprisonment, disqualified from acting as a company director for two years and was ordered to pay prosecution costs of £125,000.
  • Richard Gledhill, 64, former sales manager, to eight months imprisonment, suspended for two years. 

In passing sentence today HHJ Rivlin QC said "The bare truth of this case is that Mr Forsyth bears the most culpability". In relation to David Mabey, HHJ Rivlin QC said "When a director of a major company plays even a small part, he can expect to receive a custodial sentence".
 
This development follows the sentencing of bridge builders Mabey & Johnson Ltd in September 2009 when the company pleaded guilty to ten charges of corruption and breaching UN sanctions in relation to contracts in Iraq, Jamaica and Ghana. The company was ordered to pay fines, reparations and costs totalling £6.5m. The Maybe & Johnson case was the first successful prosecution in the UK brought by the UK Serious Fraud Office against a company for overseas corruption, and heralded a more aggressive approach by the SFO to prosecuting corruption cases.

Comment 
 
Today's sentence illustrates the continued determination of the SFO to prosecute senior executives who break anti-corruption laws. While the prosecution of the former Mabey & Johnson executives was brought under the old law, section 14 of the new Bribery Act 2010 will give the SFO a clearer statutory basis to prosecute senior officers who have consented or connived in an act of bribery. Under the Bribery Act, which is expected to come into force this summer, the maximum prison sentence for a bribery offence increases from 7 years to 10 years and the courts will be able to impose unlimited fines on individuals as well as companies.

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