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Julie DiMauro Contributing Editor

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Bill Waite Contributing Editor

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FCPA Blog Daily News

Entries in Bahamas (30)

Thursday
Nov032011

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.

Click to read more ...

Tuesday
Aug092011

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.

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Friday
Jul222011

Bodmer Appointed To Board Of Swiss 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 "reappointed to the board of a Swiss bank that the government said he used in the criminal scheme."

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Tuesday
May102011

Bourke Demands New Trial; Says Gov't Witness 'Lied'

Frederick Bourke said prosecutors in his 2009 trial knew a crucial government witness would give false testimony but they let him take the stand anyway. Now Bourke wants a new trial.

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Wednesday
Feb232011

DOJ Looks For Kozeny Decision 'This Year'

The DOJ said the Bahamas government is hopeful that the Privy Council will hear and decide Viktor Kozeny's extradition case this year.

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Monday
Jan312011

Bodmer, Like Lewis, Waits For Sentencing

The Swiss lawyer who helped FCPA fugitive Viktor Kozeny move money and provided key testimony against Frederic Bourke is still waiting to be sentenced more than six years after pleading guilty.

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Wednesday
Dec152010

Waiting For Viktor

More than five years after pleading guilty, Clayton Lewis is still waiting to be sentenced. And that's the way the government wants it.

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Tuesday
Feb232010

Bourke Witness Faces Sentencing

Hans Bodmer, a key witness against Frederic Bourke, faces sentencing today in federal court in Manhattan for conspiracy to launder money. Photo by edenpicturesHans Bodmer, the Swiss lawyer who once represented Viktor Kozeny and provided key testimony against Frederic Bourke, may learn his sentence today. He's scheduled to appear in U.S. federal district court in Manhattan before Judge Shira A. Scheindlin, who oversaw Bourke's trial last summer.

Bodmer was indicted by a New York federal grand jury in August 2003 on single counts of conspiracy to violate the Foreign Corrupt Practices Act and to launder money. A copy of the indictment can be downloaded here. 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 in October 2004 to conspiracy to launder money.

He was released on bail of $1.5 million, including $1.45 million in cash first held at the Royal Bank of Scotland in London and later transferred with Judge Scheindlin's consent to Thurgauer Kantonalbank in Switzerland.

Bodmer faces ten years in prison on the money-laundering conspiracy charge. Because of his guilty plea and cooperation with the DOJ in the prosecution of Frederick Bourke, his sentence will be much lighter.

Bloomberg's David Glovin gave this account of Bodmer's June 2009 appearance for the prosecution at Bourke's trial:

Bodmer, who is testifying for prosecutors in exchange for leniency and admits knowing of the bribery scheme, testified yesterday that he told Bourke about the payments. . . .

[S]peaking methodically through a thick German accent, [he] told jurors he was surprised when Bourke asked him about the “arrangement” [to pay Azeri officials bribes] because it was a “sensitive matter.” After getting permission from Kozeny, Bodmer said he outlined the scheme. Justice Department lawyer Robertson Park asked Bodmer how Bourke responded.

“No specific response,” Bodmer testified.

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

Bodmer's one-time client, Czech-born Victor Kozeny, is the best-known FCPA fugitive. Last month he won a decision in a Bahamas appellate court that continues to block his extradition to the U.S. He's lived in the Bahamas for about ten years. A federal grand jury in Manhattan indicted Kozeny in May 2005 for a plot to bribe Azeri leaders to gain control of the state oil company. His co-defendant Bourke was accused of investing in the scheme despite knowing Kozeny planned to use bribes.

[Editor's note: Bodmer's sentencing was postponed today until August 23, 2010.]

Wednesday
Jan272010

Kozeny's Extradition Blocked Again

Victor Kozeny: The most famous FCPA fugitive is wanted by U.S. authorites for conspiracy to bribe Azeri leaders.Victor Kozeny, the Czech-born fugitive wanted in the United States for conspiracy to violate the Foreign Corrupt Practices Act, won a decision this week in the Bahamas court of appeal that continues to block his extradition to the U.S.

Kozeny, 46, is the best known FCPA fugitive. He has lived in the Bahamas for about ten years. He was arrested there at the request of the U.S. government in October 2005 and held in prison until granted bail in April 2007. Although a judge ordered his extradition, his lawyers were able to convince another judge to block it (here). The U.S. then pushed the case to the court of appeals. The three-judge panel held hearings in December and issued a 26-page ruling Tuesday.

A federal grand jury in Manhattan indicted Kozeny in May 2005 for a plot to bribe Azeri leaders to gain control of the state oil company. His co-defendant, Frederic Bourke, was convicted in July of conspiracy to violate the FCPA and lying to FBI agents. Bourke was sentenced to a year and a day in prison. His appeal is pending.

Others involved in the Azeri scheme have pleaded guilty. Waiting to be sentenced are Thomas Farrell, a director of one of Kozeny's companies, Kozeny's Swiss lawyer Hans Bodmer, and Clayton Lewis, a partner in Omega Advisors, Inc., a hedge fund that invested and lost about $126 million in Kozeny's Azeri plot.

Kozeny was also indicted in 2003 in a New York state criminal case for stealing $182 million from investors, including Omega, AIG, and Bourke.

The Bahamas decision dismissed all six grounds of appeal by the U.S. government. A lower court judge found it had acted in bad faith in the extradition process by failing "to disclose certain pertinent information in law and fact." In letting that part of the lower court judgment stand, Justice Longley, writing for the appeal panel, said:

The extradition process, because it involves the depravation of liberty, requires the exercise of good faith on the part of the requesting state and that must mean that it has a duty to disclose in a timely manner and with its request if the information is known at that time, any information that would not only be adverse to its request but would inform a prudent court in the exercise of its function that might lead to a relevant trial of inquiry. Whether the failure to comply with its obligation in any particular case is bad faith depends on all circumstances of the case. There certainly was material before the learned judge to reach the conclusion which he did and I see no reason to interfere with that decision.

The Bahamas attorney general and the U.S. government can request a final appeal to London’s Privy Council. They haven't said what they plan to do.

Download a copy of the judgment by the Bahamas court of appeal in Government of the United States et al, Appellants and Victor Kozeny, Appellee (January 26, 2010) here.

Bloomberg's David Glovin, who has reported Kozeny's legal battles, filed a report here.

Thursday
Dec032009

Kozeny Keeps Fighting

Viktor Kozeny, left, the promoter of a failed 1998 plot to take control of the Azeri state oil company during its privatization by bribing the country's leaders, has again asked a court in the Bahamas to block his extradition to the United States. The Czech-born fugitive appeared this week at a hearing to consider an appeal on behalf of U.S. authorities. They want to bring him back to face trial for conspiracy to violate the Foreign Corrupt Practices Act. The appellate judges didn't say when they'll decide the case.

Kozeny, 46, has lived in the Bahamas for about ten years. He was arrested there at the request of the U.S. government in October 2005 and held in prison until granted bail in April 2007. Although a judge ordered his extradition, his lawyers were able to convince another judge to block it (here). The U.S. then pushed the case to the court of appeals.

Kozeny was indicted for the Azeri bribery plot by a federal grand jury in Manhattan in May 2005. His co-defendant, Frederic Bourke, was convicted in July of conspiracy to violate the FCPA and lying to FBI agents. Bourke was sentenced to a year and a day in prison. Others involved in the Azeri scheme have pleaded guilty. Waiting to be sentenced are Thomas Farrell, a director of one of Kozeny's companies, Kozeny's Swiss lawyer Hans Bodmer, and Clayton Lewis, a partner in Omega Advisors, Inc., a hedge fund that invested and lost about $126 million in the Azeri privatization. Kozeny was also indicted in 2003 in a New York state criminal case for stealing $182 million from investors, including Omega, AIG, and Bourke.

Kozeny's lawyer, Clive Nicholls QC, told the appellate court this week that his client shouldn't be extradited. The lawyer said Kozeny committed no crime under Bahamas law, which doesn't reach bribery between third-country nationals. According to a report in the local Tribune (here), Nicholls also said Kozeny was "not a U.S. resident or national at the time the alleged offences were committed and therefore is not subject to the U.S. jurisdiction. He further submitted that when the alleged offences were committed, the Bahamas had not signed onto the Organisation for Economic Co-operation and Development (OECD) anti-bribery convention and also that the alleged offences occurred before the [Inter-American Convention Against Corruption (IACAC)] came into force."

In Kozeny's indictment, the United States said he was subject to the Foreign Corrupt Practices Act because he acted as an agent for U.S.-based investors, known as "domestic concerns" in the FCPA, including Kozeny's own investment vehicle (15 U.S.C. § 78dd-2(h)(1)(A)).

Kozeny is the best-known FCPA fugitive. Bloomberg's David Glovin visited him last year in the Bahamas and wrote a great account of their meeting (here).

Thursday
Oct082009

Bourke's Big Day

Frederic Bourke, the wealthy entrepreneur convicted in July of conspiring to violate the Foreign Corrupt Practices Act and the Travel Act, and lying to FBI agents, is scheduled to be sentenced on Tuesday, October 13. At his trial, a federal jury in Manhattan 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.

Bourke, 63, the co-founder of handbag-maker Dooney & Bourke, faces up to five years in prison on each count. The judge has already said she'll impose less than the 10-year sentence prosecutors have asked for. Even so, any jail time will complete Bourke's fall from his "charmed life," as the American Lawyer's Andrew Longstreth calls it, to convicted felon.

In an October 9 feature in the American Lawyer (available at law.com here), Longstreth dives deep into the lives of Kozeny and Bourke and their run-in with the FCPA.

Here's an excerpt:

It's strange that Kozeny―the alleged mastermind behind the bribery scheme―is living in the Bahamas, while Bourke, an investor who merely knew of the bribes is preparing for a possible prison term. But what makes this story even stranger is that the government's FCPA investigation can be traced back to a civil suit filed by American investors against Kozeny in which Bourke was a witness for the plaintiffs. Kozeny's lawyers raised the bribes as a defense, and then alerted federal prosecutors about the bribes in the belief that Kozeny would not be charged with FCPA crimes. They were wrong. And Bourke is paying for it.

Before his disastrous investment with Kozeny, Ricky Bourke lived a charmed life. He grew up in the suburbs of Detroit, attended the University of Michigan, and married Eleanor Clay Ford, whose mother was Henry Ford's only granddaughter. Although Bourke married into money, he has made plenty on his own. In the seventies he teamed up with Peter Dooney, a talented designer at Coach, Inc., to start a leather goods manufacturing company called Dooney & Bourke, which originally sold belts and suspenders, but later became best known for its stylish handbags. (In 1996 Liz Claiborne, Inc., bought the company for an undisclosed amount.) In the nineties, Bourke became one of the first major investors in genome science.

By the time he reached his fifties, Bourke had collected all the material trophies of success: multiple homes, a private plane, and a yacht. But according to the prosecution's theory at his trial, Bourke wasn't satisfied. He wanted to be a billionaire. . . .

Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.

Sunday
May312009

Bourke's Trial Is The FCPA's Big Show

There have only been a few Foreign Corrupt Practices Act trials over the years, so Frederic Bourke's is unusual to start with. What's more, this case has plenty of special ingredients. Bourke, 63, is rich. He lives in the tony towns of Greenwich and Aspen. And he's famous -- or at least his name is famous. He co-founded the popular handbag brand Dooney & Bourke.

Prosecutors say he invested in a deal in Azerbaijan that he knew was tainted by bribery. He says he's not a crook but a victim of fraud perpetrated by mastermind Viktor Kozeny. Now he's facing what amounts to a life sentence in prison.

There's Kozeny himself -- a colorful and talkative fugitive. He's accused not only of bribery but also of stealing more than $180 million from his investors, including $8 million from Bourke. His chair will be empty but Kozeny will still be the most important person at the trial.

And there are the government's three "cooperating witnesses." Thomas Farrell, a director of one of Kozeny's companies, his Swiss lawyer Hans Bodmer, and Clayton Lewis, who steered $100 million of investment money his way. They've all pleaded guilty in related federal criminal cases and will be sentenced after they testify against Bourke -- a sure-fire recipe for all sorts of mixed-motives and mischief at the trial.

So there's no question about it. Frederic Bourke's turn in Judge Shira Scheindlin's courtroom will be the most watched FCPA trial ever.

* * *
Setting the stage for the Monday kick off in Manhattan is Bloomberg's David Glovin. His latest article about the case is another stunner. Among the revelations: the U.S. Attorney apparently has a tape "on which Bourke may have admitted he knew of wrongdoing by Kozeny."

Glovin also revealed that Kozeny has won an order from a Bahamas judge requiring the government there to pay him $2 million. It's to cover his legal fees for successfully challenging extradition. The U.S. wanted to bring back the Czech-born fugitive to face charges with Bourke. But the Bahamas court said the FCPA counts were not provable or prosecutable under local law. See our post here.

Here's how Glovin's story starts:

Viktor Kozeny, the central figure in an international bribery case over an Azerbaijan oil deal, plans to monitor the June 1 trial of Greenwich resident Frederic Bourke, one of his investors, from his Caribbean beachfront estate, 1,100 miles from the Manhattan courtroom.
Kozeny, the admitted ringleader of a plot to bribe leaders in Azerbaijan in the 1998 deal, won't be in Manhattan federal court as prosecutors offer evidence against Bourke. Since 2005, when he and Bourke were indicted by the U.S. government, Kozeny has avoided extradition. Now he says he hopes the trial will clear his name. . .

U.S. District Judge Shira Scheindlin will preside over the trial, which will center on a failed deal involving the state-owned oil company of Azerbaijan. The republic, which borders the Caspian Sea, has 7 billion barrels of proved oil reserves . . .

Read David Glovin's story here.

Read all posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.
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