NEW YORK (Reuters) – The U.S. Department of Justice has launched a criminal investigation into whether Alcoa Inc, one of its subsidiaries and people connected with the unit committed fraud, corruption and bribery in its relations with customer Aluminum Bahrain B.S.C. (Alba).
In a motion filed Thursday with the U.S. District Court in Pittsburgh, the Justice Department asked the court to put a temporary hold on an Alba’s civil suit against Alcoa, the world’s largest supplier of alumina, the principal raw material used in making aluminum.
The suit also names affiliate Alcoa World Alumina LLC, former Alcoa World Alumina Vice President of Marketing William Rice and Victor Dahdaleh, an agent of Alcoa and Alcoa World Alumina, as defendants.
“The Alba complaint alleges numerous facts which, if true, could be relevant to the government’s criminal investigation and a potential criminal trial,” the department wrote in its motion.
Last month, Alba, one of the worlds largest smelting firms, filed suit seeking more than $1 billion from Alcoa, accusing the firm of participating in a 15-year conspiracy involving overcharging, fraud and bribery.
In the suit, Alba accused the defendants of steering payments for alumina to companies abroad in order to pay kickbacks to a Bahraini government official.
Alba, which is 77 percent owned by the government of Bahrain, also accuses the defendants of overcharging it for alumina. It did not name the official to whom bribes were allegedly paid.
According to the suit, the bribes were sent through a series of shell companies controlled by Alcoa and resulted in hundreds of millions of dollars in overpayments.
Alcoa supplied the alumina from its Australian unit to a Singapore-based company controlled by Dahdaleh, a Canadian citizen who lives in Britain and who, according to the lawsuit, facilitated the bribes that caused Alba to overpay for the material starting in 1993.
Rice is an Alcoa employee, Dahdaleh is not, Alcoa spokesman Kevin Lowery said.
Alcoa first learned of the Department of Justice’s investigation when the department notified Alcoa that it would ask for the stay a couple of days ago.
“We did not object, and we also told them we would be cooperating fully, partly because we see this as opportunity to get speedy resolution to the entire matter,” Lowery said.
“We have continued to look into the matter and have yet to find that Alcoa hasn’t lived up to its values,” Lowery said.
Dahdaleh is overseas and has not been served with the complaint, according to the motion.