Frederic Bourke was convicted on Friday of conspiring to violate the Foreign Corrupt Practices Act and the Travel Act, and lying to FBI agents. He was acquitted of money laundering. The judge has already said she will impose less than the 10-year maximum sentence prosecutors have asked for.
Bourke, 63, is co-founder of well-known handbag brand Dooney & Bourke. The jury found that he invested in Czech-born promoter Viktor Kozeny's unsuccessful attempt in 1998 to gain control of Azerbaijan's state oil company, Socar, despite knowing Kozeny planned to bribe Azeri leaders. Kozeny has also been charged in the case but is a fugitive living in the Bahamas.
Sentencing is scheduled for Oct. 13, 2009. Bourke faces a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss resulting from the alleged violations on each of the two counts on which he was convicted.
Bourke, formerly married to a member of the Ford family, met Kozeny when the two were neighbors in Aspen, Colorado. His trial in federal court in Manhattan was overseen by Judge Shira Scheindlin. Her rulings generally gave Bourke latitude to present his defense and also restricted the prosecution.
Bloomberg's David Glovin was in the courtroom for the month-long trial. After the verdict he said:
Testimony at times appeared to come from a novel. Witnesses told of plane flights into Azerbaijan with millions of dollars stuffed into suitcases, of shakedowns in government offices, and of dealings with Chechen mobsters that provided protection to Kozeny’s operation. Kozeny said his investors might control about half of the Azeri economy if they captured Socar. Others believed their investment might grow tenfold, witnesses said.Glovin reported that the jury foreman, David Murphy, 52, "said the panel believed Bourke learned of the bribes after investing and then should have gotten out. By then Kozeny was known as the 'Pirate of Prague' for allegedly stealing money from investors in his native Czech Republic. 'It was Kozeny, it was Azerbaijan, it was a foreign country,' Murphy, an electrician, said in an interview after the verdict. 'We thought he knew and definitely could have known. He’s an investor. It’s his job to know.'”
Bourke's lawyer John Cline said his client is likely to appeal.
The DOJ's July 10, 2009 release is here.
Read David Glovin's reports on the trial here.
Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.