THE FCPA: TARGETING INDIVIDUALS MEANS MORE TRIALS
Last Friday, the jury in an FCPA case returned a verdict of guilty on all but two of the 21 counts in the superseding indictment which named Gerald and Patricia Green as defendants. U.S. v. Green, Case No. 2:08-cr-00059 (C.D. Cal. Filed Jan. 16, 2008). See also DOJ Press Release, Film Executive and Spouse Found Guilty of Paying Pribes to senior Thai Tourism Official to Obtain Lucrative Contracts (Sept. 14, 2009) (available here). This is the third FCPA case tried to verdict this year. The government has prevailed in each case.
Mr. and Mrs. Green are the owners of Film Festival Management, Inc., a film company based in Los Angeles. Initially, they were indicted on one count of conspiracy to bribe a foreign public official and six substantive counts of violating the FCPA. The superseding indictment alleged conspiracy to violate the FCPA in Count 1, individual acts in violation of the Act in Counts 2-10 and additional counts of money laundering, obstruction and falsely subscribing a U.S. Income Tax Return. The jury found the couple guilty of all the FCPA charges.
The superseding indictment claimed that Mr. and Mrs. Green paid about $1.8 million in bribes to the former governor of the Tourism Authority of Thailand. In turn, the defendants received contracts to manage and operate Thailand’s yearly Bangkok International Film Festival and others to provide an elite tourism privilege card marketed to wealthy foreigners.
To facilitate the scheme, Mr. and Mrs. Green used a variety of business entities. Some had dummy business addresses and phone numbers. The payments were disguised as sales commissions and were channeled through foreign bank accounts of intermediaries, including those of the former governor’s daughter and friend.
Green is the latest illustration of the government’s emphasis on FCPA enforcement and the targeting of individuals. It follows the August 2009 conviction of former Congressman William Jefferson after a one-month trial for soliciting bribes, honest services wire fraud, money laundering, racketeering and conspiracy. Mr. Jefferson was acquitted on five other counts including one based on the FCPA. U.S. v. Jefferson, Case No. 1:07-cr-00209 (E.D. Va. Filed June 4, 2007).
Jefferson was based on allegations that the former Congressman performed a wide range of official acts in return for things of value, including leading official business delegations to Africa, corresponding with U.S. and foreign government officials and utilizing congressional staff members to promote businesses and business persons. The business ventures that the former Congressman sought to promote included telecommunications deals in Nigeria, Ghana and elsewhere, oil concessions in Equatorial Guinea, satellite transmission contracts in Botswana Equatorial Guinea and the Republic of Congo and the development of different plants and facilities in Nigeria.
Earlier this year the government also prevailed in a criminal FCPA case which named Frederic Bourke as a defendant. U.S. v. Kozeny, Case No. 1:05-cr-00518 (S.D.N.Y. Filed May 12, 2005). Mr. Bourke is the co-founder of handbag maker Dooney & Bourke. The case is based on claims that Mr. Bourke conspired with Czech expatriate Viktor Kozeny to bribe Azerbaijan’s former president and other leaders. The claims centered on allegations that Mr. Bourke invested with Mr. Kozeny knowing that he gave Azeri leaders millions of dollars in cash and a secret two thirds interest in a venture formed to buy the state oil company, Socar. That oil company was never sold. Mr. Bourke, through an investment vehicle, put up $8 million in the deal. Mr. Kozeny is a fugitive.
The increase in FCPA trials is likely to continue in view of the significant enforcement efforts of DOJ and the SEC. At present DOJ reportedly has over 120 open FCPA investigations. While most companies settle FCPA charges, the continuing focus on individuals is likely to result in an increasing number of trials.