The Green FCPA Case: A Continuing Saga
In the FCPA case against film makers Gerald and Patricia Green, the Ninth Circuit Court of Appeals handed down a ruling last week which is virtually guaranteed not to end anything. In its decision the Court rejected a claim regarding the manner in which the restitution order was entered while all but invited a petition for rehearing en banc. U.S. v. Green, No. 10-50519 (9th Cir. Opinion Filed July 11, 2013).
The case centered on the work of Mr. and Mrs. Green in connection with the Bangkock International Film Festival. The couple had a number of contracts from the Tourism Authority of Thailand to run the Festival and related promotions. Under their direction the enterprise was hugely successful, generating profits of as much as $140 million. Over 1,600 journalists attended the events in 2006. Some thought the event would become the next Cannes Film Festival.
The difficulty was the manner in which Mr. and Mrs. Green secured the contacts. About $1.8 million was paid to the governor of Thailand’s Tourism Authority. The amount paid equaled about 13% of the value of the contracts.
An FCPA action was filed. A jury trial followed in which the couple was convicted. They were sentenced to serve six months imprisonment and three years supervised release. The court also ordered the payment of $250,000 in restitution. To enter this part of the sentencing order the court had to find under the applicable statute that there was an identifiable victim who either suffered a physical injury or pecuniary loss. The court concluded that these statutory requirements were met, finding there was a victim and a loss in terms of the “bribery figure amount.”
On appeal the Greens challenged the Court’s findings which are the predicate for the restitution order. Specifically, they argued that the jury, and not the court, should have made the requisite findings. The Ninth Circuit rejected this claim, for now.
The issue is an outgrowth of the Supreme Court’s decision in Apprendi v. New Jersey, 120 S. Ct. 2348 (2000) and its recent application of that case in Southern Union Co. v. U.S., 132 S. Ct. 2344 (2012). Apprendi held that “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” The ruling has been applied to the fact-finding needed to trigger capital punishment and, in Southern Union, to criminal fines. It does not apply to fact-finding regarding whether sentences are consecutive or concurrent.
Following the Supreme Court’s ruling in Apprendi the Ninth Circuit rejected the contention that the ruling applied to restitution as Mr. and Mrs. Green now argue. Those decisions were handed down before Southern Union however. Thus Judge Kozinski stated that “Our precedents are clear that Apprendi doesn’t apply to restitution, but that doesn’t mean our case law’s well-harmonized with Southern Union. Had Southern Union come down before our cases, those cases might have come out differently.” Presently, those cases control the Court held. The panel could not overrule the circuit decisions since they were not clearly in conflict with Southern Union. The next step for Mr. and Mrs. Green seems quite clear.