Yahoo News How a Gun Exec Allegedly Conned Cops Into Funding His Swanky Lifestyle
When Indonesian security forces needed new weaponry, a high-level executive at America’s largest firearms exporter saw an opportunity to personally enrich himself using an international network of relatives and associates to launder millions in ill-gotten gains.
That’s according to a search warrant affidavit obtained by The Daily Beast, which reveals Amaro Goncalves, a vice president of global defense sales at Sig Sauer’s U.S. headquarters in Seabrook, New Hampshire, came under investigation for surreptitiously overbilling the Indonesian police, military, and intelligence services by up to 600 percent over several years.
The 36-page affidavit, which was filed in 2020 but quietly unsealed on Thursday, claims Goncalves used the illicit funds to pay for, among other things, one child’s tuition at Babson College, various relatives’ credit card bills, and his niece’s six-figure wedding at a swanky seaside resort in New Hampshire.
It does not specify how much money Goncalves, 61, is thought to have amassed and subsequently laundered, but cites U.S. government export data showing Sig Sauer reported 41 shipments from the U.S. to Indonesia between Jan. 1, 2016 and Dec. 31, 2017, for a total of $27 million. The affidavit unsealed Thursday includes the address—which The Daily Beast has redacted—of Goncalves’ $2 million home in Rye, New Hampshire.
It’s unclear whether Goncalves has been arrested and no related charges have been filed against him, according to a search of federal court records. Other court records reveal the investigation was ongoing as of June this year, and federal prosecutors in New Hampshire told a judge the brothers were still “unaware that they are considered suspects,” and didn’t want to tip them off for fear that they would “flee, destroy evidence, or change their patterns of behavior.”
Goncalves, who joined the company in 2012, did not respond to voicemails and text messages from The Daily Beast seeking comment. Sig Sauer representatives did not reply on Friday to The Daily Beast’s request for comment, which included an inquiry about Goncalves’ employment status at the company. However, in an FEC filing dated Oct. 13, 2022, Goncalves lists Sig Sauer as his employer, and his position as EVP, Global Defense Sales. (The filing shows an automatic deduction of $192.31 from each of Goncalves’ bi-weekly paychecks, going to the Sig Sauer Inc. Political Action Committee.)
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Sig Sauer has been the subject of scrutiny in recent years, given how the company’s flagship P320 pistol in 2017 replaced the Army’s previous go-to sidearm, the Beretta M9—only for the public to discover an undisclosed fatal flaw. Dozens of pistols have fired on their own across the country, sparking lawsuits by injured police officers and the family of a woman killed in Colorado—yet the company refused to issue a recall.
For more than a year, the feds say Goncalves took advantage of the intense international interest in the 9mm semi-automatic P320 to dupe his Indonesian buyers into vastly overpaying for the pistol. Each one was worth about $350, but Goncalves jacked up the price to $1,650 per handgun, according to the affidavit.
“Former employees of Sig Sauer with direct knowledge of sales practices there told me that [Goncalves] maintained control over all pricing decisions in transactions involving sales to Indonesia,” Sara Albert, a special agent at the Defense Criminal Investigative Service (DCIS) attests in the affidavit, which sought permission to search a Gmail account belonging to Goncalves’ brother, Antonio.
Goncalves justified the markup by lying to his Indonesian government customers, telling them the guns they were buying were “specially manufactured and tested to meet higher standards than civilian weapons manufactured by Sig Sauer,” the affidavit states. This gave Goncalves and his cronies “a basis to charge a higher price to the end user than what is ordinarily charged in commercial markets,” explains the affidavit.
However, the investigative arm of the Department of Defense (DoD) Office of Inspector General says these pistols were no different from the ones readily available on the shelves at retail gun shops across America.
“My investigation has not uncovered any indication that Sig Sauer used any special steels, different mechanical processes, or any further testing in producing the firearms in question,” Albert states in the filing. “In fact, the build date is so close to the ship date that it is unreasonable to think any special manufacturing and testing actually occurred.”
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DCIS investigators also couldn’t find “any reference to such unique qualities” anywhere on Sig Sauer’s website, the affidavit states.
Goncalves was thought to be funneling the dirty money through a series of shell companies stretching from Asia to the Americas, with a corporate bank account controlled by Antonio Goncalves, a frozen food distributor in Caracas, Venezuela, serving as the primary node, according to the affidavit.
Antonio maintained a commercial bank account in Miami, into which the affidavit says Goncalves deposited the money he skimmed from the Indonesians. Antonio would then transfer the funds into a personal account he controlled, which Goncalves used as his piggy bank, siphoning out nearly $1 million between 2017 and 2020 from that one account alone, the feds allege. (During the 2019 search of Goncalves’ home, DCIS agents found a checkbook in Antonio’s name, according to the affidavit, which says all the checks were blank, but had been signed by Antonio.)
Antonio’s bank records also raised red flags to investigators, who reviewed his company’s invoices and found them “indicative of fraudulent documents,” the affidavit states.
About half the $1.3 million in one of Antonio’s accounts came from “the Indonesian network” in 12 wire transfers, “10 of which were in round numbers ending in either an even thousand or five hundred dollars,” according to the affidavit. “All were for exact dollar amounts.”
Bank records showed suspiciously large outflows of cash from Antonio’s accounts to Goncalves, showing him to have given away half his supposed $80,000 per month income to his brother for two straight years, the affidavit says.
It is unclear if the investigation into Goncalves is ongoing but the long-running probe has delved deep. In 2018, federal agents at Los Angeles International Airport seized a phone from an unidentified Indonesian national and alleged co-conspirator who had been communicating with Goncalves on WhatsApp. The following year, the feds subpoenaed Goncalves’ phone records from Comcast containing WhatsApp messages between him and an alleged co-conspirator. A military investigator managed to get Antonio’s personal Gmail records in 2020.
Goncalves was also arrested in an FBI sting operation over accusations that he and 21 others bribed government officials in the Central African nation of Gabon in pursuit of a $15 million contract to outfit the country’s presidential guard with machine guns and body armor. (The cases against Goncalves and a handful of co-defendants were ultimately dismissed after two separate juries deadlocked on charges facing a related group of defendants.)
The newly unsealed warrant affidavit means Goncalves, a member of the Worcester Polytechnic Institute’s “Athletic Hall of Fame,” has now been accused of criminal wrongdoing at two of his previous three employers.
Prior to starting at Sig Sauer, Goncalves worked for gunmaker Smith & Wesson as the Springfield, Massachusetts company’s vice president of international and U.S. government law enforcement sales.
His “leadership, experience, and first-hand knowledge of international laws and customs will help us continue to deliver excellent service to our existing customers and capitalize on new opportunities as we expand our presence globally with military and law enforcement professionals,” the company said in a 2007 press release.
The press release also included a statement from Goncalves, who said he was “excited” about continuing to support Smith & Wesson’s “global reputation for delivering only top quality product and services.”
Prior to Smith & Wesson, he was the executive director of international sales and marketing during a 12-year stint at the Hartford, Connecticut-based Colt Manufacturing Company, creator of the Colt .45 handgun. Aside from being named in a 2003 lawsuit against Colt by a Middle East sales rep who said he hadn’t been paid, no criminal investigations involving Goncalves during his years at Colt have been made public.
Goncalves took great pains to keep his alleged scheme quiet, according to federal investigators.
The federal investigation into Goncalves provides a glimpse into the murky world of international arms sales, which are heavily regulated but largely kept hidden from the public.
The U.S. is one of the world’s largest producers of small arms, such as handguns and rifles. Sales are federally regulated to prevent American gun companies from fueling conflicts abroad, and laws specifically forbid firearm manufacturers from shipping them to unsavory types—especially if certain police agencies or militias have a history of human rights violations. The State Department and Defense Department rely on strict paperwork requirements to track those shipments down.
Allegations of fraudulent sales at Sig Sauer have been floating around since at least 2017, also involving Indonesia. Former employee Patricia Hall-Cloutier filed a lawsuit that year in New Hampshire state court describing how the foreign sales department—Goncalves’ team—was misidentifying the end-user, concealing the true destination of certain international shipments. In her lawsuit, she described catching a sales employee faking an end-user’s identity, only to have the person claim “that the new name of the end-user was the ‘Indonesian way of spelling Ministry of Defense.’”
Hall-Cloutier claims that she immediately reported it to Sig Sauer’s top lawyer, executive vice president Steven Shawver. Less than a week later, she was fired and security managers escorted her from the building, according to the lawsuit. Hall-Cloutier and the company moved the legal fight to private arbitration in 2018, and the case went silent. Her lawyer did not return a call seeking comment on Friday.
The warrant affidavit in Goncalves’ case accuses him and his brother of money laundering and wire fraud “by creating false invoices to justify kickback payments and by depriving… Sig Sauer of [Goncalves’] honest services.” The U.S Attorney’s Office in New Hampshire, which is overseeing the case, declined to comment.
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