Subscribe for notification

Swiss court sentenced Israeli tycoon Steinmetz to 5 years in prison for corruption

A Geneva court on Friday convicted Israeli diamond and minerals magnate Beny Steinmetz on charges of corruption of foreign agents and forging documents, in a trial over a bid to reap lavish iron ore resources in Guinea.

Steinmetz, one of Israel’s richest men, was sentenced to five years in prison.

Steinmetz was also ordered to pay a $56 million fine. His defense lawyer, Marc Bonnant, said he would appeal the court ruling on Saturday.

Steinmetz, 64, denied the charges. The plot, dating to the mid-2000s, involved Steinmetz’s BSGR Group squeezing out a rival for mining rights for vast iron ore deposits in Guinea’s southeastern Simandou region.

The case centered on alleged payouts of millions to a former wife of late Guinea president Lansana Conte, and exposed the shady and complex world of deal-making and cutthroat competition in the lucrative mining business.

Wearing a mask and flanked by his lawyers, Steinmetz — who has French and Israeli citizenship — calmly listened and jotted down notes as the judge, Alexandra Banna, read the facts of the case and the verdict over two hours. Attendance in the Geneva courtroom was limited due to COVID-19 concerns.

“It is clear from what has been presented… that the rights were obtained through corruption and that Steinmetz cooperated with others” to obtain them, said Banna.

The court, she said, had therefore sentenced him “to a deprivation of liberty for five years”, in line with the prosecutors’ request.

The court also granted the prosecution’s call for Steinmetz to pay 50 million Swiss francs ($56 million, 46 million euros) in compensation to the state of Geneva.

Steinmetz, who throughout the trial has maintained his innocence, called the verdict a “big injustice”.

‘Main beneficiary’

Steinmetz was tried along with two associates, who received lesser sentences.

Steinmetz was “the main beneficiary of the crime,” Banna ruled, adding that “the court does not recognize any mitigating circumstances.”

The case was the culmination of a drawn-out international investigation that kicked off in Switzerland in 2013.

Swiss prosecutors accused Steinmetz and two partners of bribing a wife of former Guinean president Conte and others in order to win mining rights in the southeastern Simandou region.

The prosecutors said Steinmetz obtained the rights shortly before Conte died in 2008 after about $10 million (8.2 million euros) was paid in bribes over a number of years, some through Swiss bank accounts.

Conte’s military dictatorship ordered global mining giant Rio Tinto to relinquish two concessions to BSGR for around $170 million in 2008.

Just 18 months later, BSGR sold 51 percent of its stake in the concession to Brazilian mining giant Vale for $2.5 billion.

But in 2013, Guinea’s first democratically elected president Alpha Conde launched a review of permits allotted under Conte and later stripped the VBG consortium formed by BSGR and Vale of its permit.

To secure the initial deal, prosecutors claimed Steinmetz and representatives in Guinea entered a “pact of corruption” with Conte and his fourth wife Mamadie Toure.

Toure, who has admitted to having received payments, has protected status in the United States as a state witness.

She and a number of other key witnesses in the case failed to appear.

During the trial, Steinmetz insisted he “never” asked anyone to pay Toure, insisting she “told a lot of lies”.

The defense also charged that Toure was not in fact Conte’s wife, but merely a mistress with no influence, who under Swiss law did not fall within the scope of a corruptible official.

Multiple investigations

The Geneva prosecutor’s office alleged that Steinmetz and the two other defendants engaged in corruption of foreign officials and falsification of documents to hide the paying of bribes from authorities and banks. Some of the funds allegedly transited through Switzerland — and the case has been investigated in Europe, Africa and the United States.

Swiss transparency group Public Eye said Steinmetz employed “opaque structures” to hide the allegedly corrupt schemes that were managed from Geneva, where he lived until 2016.

The group said the case showed how tax havens can be used to conceal questionable, “even illegal” activities in countries with weak governance and regulation.

 

This website uses cookies.

Read More