The US government has dropped a case brought against 16 executives accused of bribing overseas officials, in a setback for its efforts to step up enforcement of the foreign bribery act.

Citing mistrials and acquittals of three individuals, the Department of Justice filed a motion on Tuesday seeking to drop charges against the defendants.

The decision was an abrupt reversal on a case the DoJ had heralded as the “largest single investigation and prosecution against individuals in the history” of the foreign bribery act.

It comes as the DoJ faces pressure to charge bank executives and companies for wrongdoing tied to the financial crisis.

The case began with a Federal Bureau of Investigation sting during which the defendants allegedly agreed to pay bribes to sales agents in order to win a $15m contract to provide the Gabon military with uniforms, grenades and other equipment.

In January 2010, the DoJ announced the arrests of 22 defendants for allegedly violating the Foreign Corrupt Practices Act, which makes it illegal to pay bribes to foreign officials to win business contracts.

Three individuals have pleaded guilty over their role in the alleged Gabon scheme. A fourth person tied to the group also pleaded guilty.

At the time, Lanny Breuer, chief of the DoJ’s criminal division, described the investigation as “the first large-scale use of undercover law enforcement techniques to uncover FCPA violations”.

Michael Madigan, a lawyer for one defendant, argued that the case was doomed from the start because several of the executives did not know that the payments were bribes. “The FBI sting was flawed because they didn’t make clear it was an illegal transaction,” Mr Madigan said.

The DoJ has faced few courtroom tests of its FCPA investigations, as most companies agree to settle and pay fines.

In recent years, the DoJ has increased its focus on individuals, as in the Gabon case.

Last year a judge threw out foreign bribery convictions against Lindsey Manufacturing and several individuals after finding evidence of prosecutorial misconduct. The DoJ said it would appeal against the ruling.

Last month a Houston judge dismissed bribery charges against an ABB executive, saying payments were explained by lawful motives. The executive faces other charges.

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