Bourke Loses Motion For New Trial

Frederic Bourke on Thursday lost what may be his final bid to stay out of prison.

Just a day after a federal appeals court upheld Bourke's conviction in 2009 of conspiring to violate the Foreign Corrupt Practices Act, U.S. district court judge Shira Scheindlin denied Bourke's request for a new trial. He had argued that his first trial was tainted by perjury from Hans Bodmer, a key witness for the prosecution.

Bourke is facing a year and a day in prison and a million dollar fine. He's been out on bail while his appeal was pending. Judge Scheindlin hasn't said when Bourke must begin serving his jail sentence.

In arguing for a new trial, Bourke said some of Hans Bodmer's testimony was false, including the day on which Bodmer said he talked with Bourke about Viktor Kozeny's plans to bribe Azeri government officials to win a privatization deal. Bourke said prosecutors knew or should have known Bodmer would lie on the stand about a crucial date.

Bodmer, a Swiss lawyer who worked for Kozeny, is still waiting to be sentenced more than seven years after pleading guilty to conspiracy to launder money. His cooperation with prosecutors could earn him a lighter sentence.

Judge Scheindlin said Thursday in a 28-page order that prosecutors conceded that Bodmer was 'obviously mistaken in his recollection of the details of the walk and talk' he had with Bourke. But the jury could still credit Bodmer’s testimony about the substance of the conversation, she said.

'The flight records are difficult to read and interpret,' Judge Scheindlin said. She continued:

It is conceivable that the Government did not cross-check the details of Bodmer’s anticipated testimony against these difficult to decipher flight records. Moreover, the flight records do not contradict the substance of Bodmer’s testimony concerning his “walk and talk” with Bourke. Contrary to defendant’s position, the flight records do not prove that Bodmer fabricated the entire event. Rather, the flight records merely show that Bodmer was mistaken about the date and time of the “walk and talk.”

Bourke, 65, is co-founder of well-known handbag brand Dooney & Bourke. He was married to Eleanor Clay Ford, whose mother was Henry Ford's only granddaughter. 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 was also charged in the case but has been a fugitive living in the Bahamas for more than a decade. He beat back an attempt by the Bahamas attorney general to extradite him to the U.S. The Bahamas government has appealed his extradition to the U.K. Privy Council.

Download a copy of Judge Shira Scheindlin's December 15, 2011 opinion and order denying Frederic Bourke's motion for a new trial here.

Alba's Suit Against Alcoa Reopened

The Wall Street Journal's Joe Palazzolo reported Friday that Aluminum Bahrain BSC's civil suit against Alcoa has been reopened, and that Alcoa will ask that it be dismissed.

Alba, as state-owned Aluminum Bahrain BSC is known, filed the suit in 2008 in federal court in Alcoa's hometown, Pittsburgh. The suit accused Alcoa of a 15-year conspiracy of overcharging, fraud, and bribery. The suit alleged that more than $2 billion in Alba's payments under raw-material supply contracts passed from Bahrain to tiny companies in Singapore, Switzerland and the Isle of Guernsey, and that some of the money was then used to bribe Bahraini officials involved in granting the contracts.

Alba's federal lawsuit was based not on the FCPA but on common law fraud and RICO -- the Racketeer Influenced & Corrupt Organizations Act found at 18 U.S.C. §§1961-68. Private parties have no right of action under the FCPA; only the DOJ and SEC can enforce it.

Three weeks after Alba filed the suit, the judged stayed it at the request of the DOJ. Prosecutors said the United States had a "direct and substantial interest" in Alba's allegations and that the civil suit could threaten the DOJ's criminal investigation.

At the time, a spokesperson for Alcoa said, "We will cooperate fully with the DOJ and believe this will help bring this matter to a speedy conclusion."

The DOJ said it was investigating whether Alcoa, its executives, and agents "have engaged in conduct with respect to their commercial relationship with Alba in alleged violation of various criminal laws, including the FCPA, and the mail and wire fraud statutes. . . . The Alba complaint alleges numerous facts which, if true, could be relevant to the government's criminal investigation and a potential criminal trial."

Bahrain's own investigation, according to 2008 reports, centered on Sheikh Isa bin Ali al-Khalifa, the country's former minister of petroleum and chairman of Alba, and on Jordan-born Canadian businessman Victor Dahdaleh, who acted as Alcoa's agent in Bahrain.

Last month, Dahdaleh, who lives in London, was arrested there and charged under U.K. law for bribing officials at Alba. The alleged payments were made in 2001 to 2005, the Serious Fraud Office said, in connection with contracts between Alcoa and Alba for supplies of alumina shipped to Bahrain from Australia.

According to the Wall Street Journal, Alcoa asked for the civil suit in the U.S. to be reopened so that it can make a motion to dismiss it.

New Money-Laundering Allegations Against Bodmer

Bloomberg's David Glovin, who provided outstanding daily coverage of Frederic Bourke's 2009 FCPA-related trial, filed a story yesterday about new money laundering allegations against a key government witness, Hans Bodmer.

The Swiss lawyer was accused in August by Russian billionaire Oleg Deripaska of 'masterminding a scheme last year to loot OJSC MMC Norilsk Nickel, a nickel producer in which Deripaska invests.' The complaint alleged that Bodmer 'orchestrated a $1 billion money-laundering scheme.'

In October 2004, Bodmer pleaded guilty in the U.S. to conspiracy to launder money for Viktor Kozeny. Although facing up to ten years in prison, Bodmer hasn't been sentenced and was allowed to return to Switzerland. In June he was appointed to the board of Hyposwiss Private Bank Zurich.

Bodmer, 56, helped FCPA fugitive Kozeny move money that was used to bribe Azeri officials. Bodmer's testimony supported the DOJ's claim that Bourke invested in Kozeny's Azeri deal while knowing Kozeny planned to bribe officials there.

A jury convicted Bourke in July 2009 of conspiracy to violate the FCPA and lying to FBI agents. He was sentenced to a year and a day in prison. He's free on bail while he appeals his conviction.

Bourke's lawyers have charged that Bodmer lied in his testimony. They said prosecutors knew some of Bodmer's testimony would be false but put him on the stand anyway. Bourke's motion for a new trial will be heard November 10.

Kozeny is a fugitive living in the Bahamas. He won court decisions there blocking his extradition to the U.S. The Bahamas attorney general has appealed to the Privy Council in London, where arguments will be heard on November 23.

Bloomberg's Glovin said the 'new allegations against Bodmer came in an August complaint to Swiss prosecutors by Deripaska and a unit of United Co. Rusal, the world’s largest aluminum producer. Swiss authorities haven't open a criminal case and declined to comment, Glovin said.

Lewis Sentencing: Not This Year

Clayton Lewis -- who pleaded guilty in 2005 to conspiracy to violate the FCPA and launder money -- will wait until at least next February to be sentenced.

Lewis was a partner in Omega Advisors, Inc., a hedge fund that invested and lost about $126 million in Viktor Kozeny’s Azeri privatization scheme. Prosecutors said he knew Kozeny planned to pay bribes but went ahead with the investment anyway.

The DOJ asked Judge Naomi Reice Buchwald for a delay until February 6, 2012. Sentencing had been set for August 4.

In an August 3 letter to the judge, the DOJ said the government would need Lewis' testimony if Kozeny is ever brought to trial. 

Kozeny is still a fugitive in the Bahamas. A court there decided in January last year to block his extradition to the U.S. The Bahamas government is appealing to the U.K. Privy Council -- the final court of appeal for some Commonwealth members. The Privy Council, the DOJ said, has accepted the appeal but hasn't yet scheduled a hearing.

Lewis appeared as a cooperating witness for the government in Frederic Bourke's 2009 trial. Bourke was convicted of conspiracy to violate the FCPA and sentenced to a year-and-a-day in prison. He's appealing to the Second Circuit and separately asking the trial court for a new trial.

Download a copy of the DOJ's August 3, 2011 letter requesting the latest delay in Lewis' sentencing here.

The case is U.S. v. Clayton Lewis, criminal docket #: 1:03-cr-00930-NRB-1 (U.S. District Court, Southern District of New York (Foley Square)), filed July 31, 2003, assigned to Judge Naomi Reice Buchwald.

Bodmer Appointed To Board Of Swiss Bank

Hans Bodmer. Photo courtesy of Hyposwiss Private Bank. Bloomberg's David Glovin reported this month that Viktor Kozeny's Swiss lawyer who pleaded guilty in the U.S. to conspiracy to launder money was appointed to the board of "a Swiss bank that the government said he used in the criminal scheme."

Hans Bodmer, 56, helped FCPA fugitive Kozeny move money that was used to bribe Azeri officials. He later provided key testimony against Kozeny's co-defendant Frederic Bourke.

Seven years after pleading guilty to a money-laundering conspiracy, Bodmer is still waiting to be sentenced.

Kozeny is a fugitive living in the Bahamas. He won court decisions there blocking his extradition to the U.S. The Bahamas attorney general has appealed to the Privy Council in London, where Kozeny's extradition is now pending.

According to Bloomberg's Glovin, "Hyposwiss Private Bank Zurich announced Hans Bodmer’s appointment in a June 6 press release that didn’t mention his 2004 guilty plea in Manhattan federal court or his testimony at the 2009 bribery trial."

“Mr. Bodmer’s case, dating back nearly 10 years, did not involve any violations of Swiss law,” Bodmer’s U.S. lawyer, Saul Pilchen, told Bloomberg. “The appointment by Hyposwiss shows the bank’s well-placed confidence in his integrity as well as his business judgment.”

A bio on the bank's site says:

Hans Bodmer is a founding partner of Zurich-based law firm BodmerFischer Ltd. and his principal speciality is International Commercial Law. After studying at the University of St.Gallen as well as at the University of San Diego (Master of Law) he worked in various law firms at home and abroad. Apart from working as an attorney, he occupies various leadership roles in the field of sports. Since 2011 he has been a member of the Board of Directors of Hyposwiss Private Bank Geneva.

A New York federal grand jury indicted Bodmer in 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 Bodmer, who was "a non-U.S.-resident foreign national who served as an agent of a domestic concern." After the judge dismissed the FCPA conspiracy charge, Bodmer pleaded guilty in October 2004 to conspiracy to launder money.

He was released on bail of $1.5 million and allowed to return to Switzerland.

Bodmer's detailed testimony helped a jury convict Bourke in July 2009 of conspiracy to violate the FCPA and lying to FBI agents. Bourke was sentenced to a year and a day in prison. He's free on bail while he appeals his conviction.

Bourke's lawyers have charged that prosecutors knew some of Bodmer's testimony would be false but put him on the stand anyway. In a filing asking for a new trial, Bourke's attorneys said:

The recent oral argument in [Bourke's appeal in the] Second Circuit revealed a startling fact, previously unknown to the defense: The prosecution knew before key government witness Hans Bodmer testified that flight records from Viktor Kozeny's plane refuted Bodmer's account of the February 6, 1998 "walk talk" with defendant Frederic A. Bourke, Jr. Despite this knowledge, the prosecution presented Bodmer's false testimony, buttressed it with his time records and Rolf Schmid's redacted memorandum, and built its theory of the case around a chronology it knew to be wrong.

The judge hasn't ruled on Bourke's request for a new trial.

Bodmer faces ten years in prison on the money-laundering conspiracy charge. Because of his guilty plea and cooperation with the DOJ in Bourke's prosecution, his sentence will likely be much lighter. He's expected to be a key witness if Kozeny is extradited and tried in the U.S.