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« Dirty Diamonds And The FCPA | Main | Catching Corrupt Lawyers, Part I »
Tuesday
Apr282009

Catching Corrupt Lawyers, Part II

A lawyer with his briefcase can steal more than a hundred men with guns. -- Mario Puzo

With that street-smart aphorism in mind, we went looking for Foreign Corrupt Practices Act-related cases where lawyers were alleged to be on the wrong side of the law.

Turns out there aren't many. Here's the rundown:

Jeffrey Tesler -- indicted by a Houston grand jury in February. Prosecutors say he was a middleman who handled or arranged corrupt payments from KBR to Nigerian officials. The London lawyer was arrested by British police in March at the request of American authorities, who are trying to extradite him to stand trial in the U.S.

Two American law firms were mentioned in November 2008 during an anti--corruption sweep in China. Avon had disclosed possible FCPA violations involving payments to Chinese regulators. Authorities there were reported to be reviewing foreign investment cases in which the two U.S. firms with offices in Hong Kong and Beijing played a role. The firms (and their lawyers) haven't been named.

J. Bryan Williams, a lawyer in Virginia, was an executive at Mobil Oil. He was also a friend of James H. Giffen, an American businessman arrested in New York in 2003 for paying $78 million in bribes to an adviser of Kazakhstan's president and former oil and gas minister. Williams took a $2 million kickback from Giffen for helping negotiate a deal involving Kazakhstan's Tengiz oil field. Williams pleaded guilty in September 2003 to tax charges and was sentenced to 46 months in prison. Giffen is awaiting trial.

Hans Bodmer, a Swiss lawyer, represented Viktor Kozeny, the Czech-born fugitive charged with Frederic Bourke with bribing government officials in Azerbaijan. Bodmer was indicted by a New York federal grand jury in August 2003 on single counts of conspiracy to violate the FCPA and to launder money. The court dismissed the FCPA charge, ruling that before being amended in 1998, the FCPA didn't apply to non-U.S.-resident foreign nationals who served as agents of domestic concerns. Bodmer then pleaded guilty to conspiracy to launder money. He's never been sentenced.

Attorney Philippe S.E. Schreiber represented Saybolt Inc. It's president, David Mead, said during his 1998 trial that he paid a $50,000 bribe to government officials in Panama only after Schreiber said it wouldn't violate the FCPA. That advice was wrong. Saybolt and Mead were charged with violating the FCPA. Mead was convicted and sentenced to four months in prison, home detention and probation, and a $20,000 fine; Saybolt's FCPA offenses resulted in five-years probation and a $1,500,000 fine. And Schreiber? Saybolt's shareholders sued him for legal malpractice (the case was settled in 2005); and the government never indicted him.

Alfredo Duran, a Miami lawyer, was charged in 1989 with arranging a bribe to officials in the Dominican Republic. The government said a $20,000 to $30,000 payment was intended to secure release of an airplane confiscated in a drug case. Duran's co-defendant jumped bail and returned to the Dominican Republic. At Duran's federal trial in Florida on FCPA charges, the court excluded evidence concerning the fugitive co-defendant, resulting in Duran's acquittal.

In 1994, attorney Harold Katz was indicted for bribing an Israeli Air Force officer to induce the purchase and maintenance of GE aircraft engines worth $300 million. The bribes, paid into Swiss bank accounts, totaled $7.8 million. A co-defendant was charged under the FCPA, while Katz faced mail and wire fraud and money laundering charges. He was never apprehended and remains a fugitive.

* * *
That's it, then. Pretty thin record, isn't it? So the verdict on Mr. Puzo's wisdom about that briefcase? Well, either he's wrong when it comes to the FCPA and lawyers aren't the culprits after all. Or he's right and they don't get caught.
.

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