IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ROANOKE DIVISION
UNITED STATES OF AMERICA )
)
v. ) Criminal Number 7:07-cr-00022 )
ITT CORPORATION )
PLEA AGREEMENT
--------------
Pursuant to Rule 11 (c)(1)(C) of the Federal Rules of Criminal Procedure,
the United States of America, represented by the United States Attorney for the
Western District of Virginia and the Assistant Attorney General, National
Security Division (hereinafter collectively referred to as "the United States"
or "the Government"), and ITT Corporation (hereinafter referred to as "ITT"), by
its undersigned Chairman and Chief Executive Officer, pursuant to authority
vested in him by its board of directors, enter into the following Plea
Agreement:
THE CHARGES, THE PLEA AND THE MAXIMUM PUNISHMENT
------------------------------------------------
1. ITT agrees that the United States will file a criminal information
(hereinafter "the Information") in the United States District Court for the
Western District of Virginia, Roanoke Division, charging ITT with the
following three counts:
Count One: Willful Export of Defense Articles Without A License
(On or between March 2001 and August 2001), in violation
of Title 22, United States Code, Sections 2778(b)(2) and
2778(c), Title 18 United States Code, Section 2, and
Title 22, Code of Federal Regulations, Sections 127.1(a)
and 127.3.
Count Two: Willful Omission of Statements of Material Fact in Arms
Exports Reports (On or between April 2000 and
October 2004), in violation of Title 22, United States
Code, Section 2778(c) and Title 18 United
States Code, Section 2.
Count Three: Willful Export of Defense Articles Without A License
(On or between January 1996 and May 2006), in violation
of Title 22, United States Code, Sections 2778(b)(2) and
2778(c), Title 18 United States Code, Section 2, and
Title 22, Code of Federal Regulations, Sections 127.1(a)
and 127.3.
2. ITT agrees to enter a plea of guilty to Counts One and Two of the
Information. In agreeing to enter a plea of guilty to Counts One and Two of
the Information, ITT understands that the maximum punishment that may be
imposed is as follows:
Count One: $1,000,000.00 Fine, Five Years Probation, $400.00
Special Assessment
Count Two: $1,000,000.00 Fine, Five Years Probation, $400.00
Special Assessment
ACKNOWLEDGMENT AND WAIVER OF RIGHTS
-----------------------------------
3. ITT agrees that it is represented in this matter by Richard Cullen, Esquire
and Howard C. Vick, Jr., Esquire. ITT further agrees that its attorneys
have informed ITT of the nature of the charges and the elements of the
charges set forth in the Information that must be proved by the United
States beyond a reasonable doubt before ITT could be found guilty as
charged. ITT acknowledges that it has reviewed the charges set forth in the
Information and has discussed with its attorneys their understanding of the
evidence in the government's possession. ITT acknowledges that its
attorneys have explained all of ITT's rights and ITT expressly acknowledges
that it has the following constitutional rights and, that by voluntarily
pleading guilty, ITT knowingly waives and gives up these valuable
constitutional rights:
a. The right to be indicted by a grand jury.
b. The right to plead not guilty and persist in that plea.
c. The right to a speedy and public jury trial.
d. The right to assistance of counsel at that trial and in any
subsequent appeal.
e. The right to remain silent at trial.
f. The right to testify at trial. g. The right to confront and
cross-examine government witnesses.
h. The right to present evidence and witnesses on ITT's own behalf.
2
i. The right to compulsory process of the court.
j. The right to be presumed innocent.
k. The right to a unanimous guilty verdict.
l. The right to appeal a guilty verdict.
ITT agrees that it is pleading guilty as described above because ITT is in
fact guilty and because it is in ITT's best interest to do so and not
because of any threats or promises.
WAIVER OF STATUTE OF LIMITATIONS
--------------------------------
4. ITT agrees to waive its right to raise the defense of statute of
limitations with regard to the charges set forth in the Information.
FACTUAL PROFFER
---------------
5. ITT agrees that the Statement of Facts attached to the Deferred Prosecution
Agreement ("Appendix A") is true and accurate to the best of its knowledge
and belief and establishes an adequate factual basis for ITT's plea to
Counts One and Two of the Information.
THE AGREED SENTENCE
-------------------
6. ITT and the government agree that the following maximum financial sentence
should be imposed by the Court pursuant to Rule 11(c)(1)(C) of the Federal
Rules of Criminal Procedure:
Count One: $1,000,000.00 Fine, $400.00 Special Assessment
Count Two: $1,000,000.00 Fine, $400.00 Special Assessment
ITT agrees that it will pay the fines and special assessments
($2,000,800.00) on the date of the sentencing.
IMMEDIATE SENTENCING
--------------------
7. ITT agrees to waive a pre-sentence investigation and report and consents to
the District Court conducting a sentencing hearing and imposing sentence on
the same date as the entry of the guilty plea.
3
DISPOSITION OF REMAINING COUNT
------------------------------
8. In exchange for ITT's pleas of guilty to Counts One and Two of the
Information, the United States will move to defer the prosecution of Count
Three of the Information pursuant to the terms and conditions set forth in
the attached Deferred Prosecution Agreement. ITT agrees that the United
States has probable cause to bring all the counts in the Information, and
that these charges are not frivolous, vexatious or in bad faith. ITT also
agrees that if at a future time the government should move to dismiss Count
Three of the Information pursuant to the terms of the attached Deferred
Prosecution Agreement, ITT is not a "prevailing party" with regard that
charge. ITT further waives any possible claim for attorney's fees and other
litigation expenses arising out of the investigation or prosecution of this
case.
FORFEITURE OF PROCEEDS
----------------------
9. As part of this plea agreement, ITT agrees to the following:
a. ITT agrees to a forfeiture monetary judgment in the sum of twenty eight
million dollars ($28,000,000.00) as a consequence of its guilty plea to
Counts One and Two of the Information. Since it is not possible to
specifically quantify what proceeds ITT has received as a result of the
actions for which it will enter a plea of guilty, ITT agrees that for the
purposes of this Plea Agreement the twenty eight million dollars
($28,000,000.00) referenced above will be considered proceeds of illegal
actions traceable to violations of 22 U.S.C. ss. 2778, the violations to
which ITT is pleading guilty. ITT also agrees that forfeiture of this sum
of money to the United States is appropriate pursuant to 18 U.S.C. ss.
981(a)(1)(C) as authorized by 28 U.S.C. ss. 2461.
b. ITT agrees to remit by March 30, 2007, untainted funds in the sum of
twenty eight million dollars ($28,000,000.00) to the United States in full
satisfaction of the forfeiture monetary judgment. ITT understands that
these funds must be remitted in the form of certified funds made payable to
the U.S. Immigration and Customs Enforcement. These funds are forfeited to
the United States in full satisfaction of the twenty eight million dollar
($28,000,000.00) forfeiture judgment and shall be deposited into the U.S.
Department of Treasury Forfeiture Fund for disposition in accordance with
law.
c. ITT agrees to cooperate fully in the forfeiture of this property. ITT
agrees to execute all documents, stipulations, consent judgments, court
orders, bills of sale, deeds, affidavits of title, and the like, which are
reasonably necessary to
4
pass clear title to the United States or otherwise effectuate forfeiture of
the property. ITT further agrees to fully cooperate and testify truthfully
on behalf of the United States in any legal action necessary to perfect the
United States' interest, including but not limited to any ancillary hearing
in this criminal action or in any civil litigation.
d. ITT understands and agrees that forfeiture of this property is
proportionate to the degree and nature of the offenses committed by ITT,
and does not raise any of the concerns raised in United States v. Austin,
113 S.Ct. 2801 (1993). To the extent that such concerns are raised, ITT
freely and knowingly waives any and all right ITT may have to raise a
defense of "excessive fines" under the Eighth Amendment to this forfeiture.
ITT further understand and agrees that this forfeiture is separate and
distinct from, and is not in the nature of, or in lieu of, any penalty that
may be imposed by the court.
e. ITT hereby releases and forever discharges the United States, its
officers, agents, servants and employees, its heirs, successors, or
assigns, from any and all actions, causes of action, suits, proceedings,
debts, dues, contracts, judgments, damages, claims, and/or demands
whatsoever in law or equity which ITT ever had, now have, or may have in
the future in connection with the forfeiture of the described assets.
f. ITT further agrees to hold and save the United States, its servants,
employees, heirs, successors, or assigns harmless from claims, including
costs and expenses for or on account of any and all lawsuits inclusive of
torts and Bivens, or claims of any character whatsoever, in connection with
the forfeiture of the described assets.
g. ITT understands that a breach of any of the provisions of this section
is a material breach of the plea agreement.
COLLATERAL CONSEQUENCES
-----------------------
10. ITT acknowledges that nothing in this plea agreement limits the rights of
any department or agency of the United States government to seek and take
civil or administrative action against ITT, including but not limited to
any action relating to suspension, debarment or listing.
GENERAL TERMS
-------------
11. This Plea Agreement and attachments as well as the attached Deferred
Prosecution Agreement and its appendices set forth the entire understanding
5
between ITT and the United States. No other additional terms or agreements
shall be entered except and unless those other terms or agreements are in
writing and signed by appropriate representatives of ITT and the United
States.
6
ON BEHALF OF THE UNITED STATES
United States Attorney's Office
Western District of Virginia
/s/ John L. Brownlee 3-26-2007
- -------------------------------------------- ------------------------
John L. Brownlee Date
United States Attorney
/s/ Stephen J. Pfleger 3-26-2007
- -------------------------------------------- ------------------------
Assistant United States Attorney Date
United States Department of Justice
National Security Division
/s/ Kenneth Wainstein 3-22-2007
- -------------------------------------------- -------------------------
Kenneth Wainstein Date
Assistant Attorney General
7
ON BEHALF OF ITT CORPORATION
/s/ Steven R. Loranger 3-26-2007
- -------------------------------------------- -----------------------
Steven R. Loranger Date
Chairman, President and Chief Executive Officer
ITT Corporation
/s/ Vincent A. Maffeo, Esq. 3-26-2007
- -------------------------------------------- -----------------------
Vincent A. Maffeo, Esq. Date
Senior Vice President and General Counsel
ITT Corporation
REVIEWED AND APPROVED:
/s/ Richard Cullen 3-27-2007
- -------------------------------------------- -----------------------
Richard Cullen, Esq. Date
McGuire Woods LLP
Attorneys for ITT Corporation
/s/ Howard C. Vick, Jr., Esq. 3-26-2007
- -------------------------------------------- -----------------------
Howard C. Vick, Jr., Esq. Date
McGuire Woods LLP
Attorneys for ITT Corporation
8