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Entries in Jurisdiction (78)

Wednesday
May192010

A Prince Of Persia

Iran has all the ingredients to be an FCPA minefield. It's big -- 66 million people in an area about the size of Alaska -- and it's the world's 6th largest oil producer. On top of that, it has a corruption problem, ranking near the bottom of the latest Corruption Perception Index -- 168th, tied with Burundi, Equatorial Guinea, Haiti, and Turkmenistan.

But although the country routinely makes world headlines, it's hardly mentioned on the FCPA Blog. Why not?

Iran has been off limits to U.S. companies from around the time the FCPA became law in 1977. The U.S. first imposed sanctions on Iran in 1979. After the takeover of the American embassy in Teheran, President Carter banned  imports of Iranian oil and blocked all transfers of property in the U.S. owned by the Central Bank and Government of Iran. In 1980, he embargoed all U.S. exports to and imports from Iran, and stopped U.S. citizens from traveling or conducting financial transactions there.

Some of those sanctions were loosened after the U.S. hostages were released. But in 1987, President Reagan imposed a new embargo on Iranian-origin goods and services. And in 1995, after Iran was labelled a sponsor of international terrorism, President Clinton again banned U.S. involvement with Iran's oil and gas development. He later confirmed that "virtually all trade and investment activities with Iran by U.S. persons, wherever located, are prohibited," according to the Treasury Department. With some small adjustments, that's how things stand today.

Criminal penalties for violating the U.S. sanctions are stiff -- fines up to $1,000,000 and prison for up to 20 years, four times harsher than the FCPA's penalties.

Even without America's business, Iran was the focus of an important FCPA case. In 2006 the Norwegian company Statoil was hit with DOJ and SEC enforcement actions for bribery and books and records violations. Statoil in 2002 had paid $5.2 million in bribes to a modern-day prince of Persia -- the son of a former president of Iran, and promised to pay $20 million more for access to the giant Pars oil field. The company eventually self-disclosed the payments and paid $3 million to Norwegian prosecutors and $21 million in penalties and disgorgement to the DOJ and SEC (with credit for the $3 million it paid back home).

That was the first FCPA criminal enforcement action against a foreign company -- Statoil is an "issuer," trading on the NYSE under the symbol STO. Its three-year deferred prosecution agreement with the DOJ expired in November 2009.

We could be hearing more FCPA news involving Iran. Last week the Wall Street Journal said the SEC's enforcement and corporation finance divisions have sent letters to several pharmaceutical and energy companies that work in Iran, as well as in Cuba, Sudan, and Syria -- which all appear on the State Department's list of countries that sponsor terrorism. (Some medicines and medical devices are licensed for export from the U.S. to Iran.) The letters reportedly asked the companies, which haven't been named, what they are doing in the four countries to ensure compliance with the FCPA.

Thursday
Apr152010

The Bribery Bill's Wash Up

The news last week from the U.K. that the Bribery Bill had become the Bribery Act seemed important. But we didn't understand why it still wasn't law.

So we asked London lawyer Kelly Hagedorn about it. Here's what she said:

Dear FCPA Blog,

The U.K.’s Bribery Act received Royal Assent on April 8 and passed onto the statute book.

Britain's been trying to pass a new law to deal with overseas bribery and corruption for a long time -- the predecessor Corruption Bill went back and forth between the Houses of Commons and Lords several times before final rejection in 2003. The Bribery Act nearly ended up with the same fate.

The General Election, however, was called on April 6, requiring Parliament to be dissolved on April 12. That left less than a week for “wash up” -- a process whereby the Government seeks to rush through unfinished legislative business before dissolution. It worked.

But the law isn't yet in force. The statutory instruments needed to implement the Act still have to be released. The “general offences” part should come into force in June 2010. The corporate offence of failing to prevent bribery (section 7) should come into force in October 2010, after the Government issues guidance on “adequate procedures” by July 2010.

The Bribery Act has a broader scope than the FCPA and a wide reach, particularly for the offence of failing to prevent corruption within an organisation. This applies to organisations incorporated anywhere, if they undertake a business or part of a business in the U.K. The defence to this charge is that the organisation had “adequate procedures” in place to attempt to prevent bribery.

Companies should start preparing now, if they haven't already, for implementation of the Bribery Act. 

More about the Bribery Act can be found here.

Monday
Mar222010

That's Right, Follow The Money

It's hard to bribe a foreign official without someone laundering the money. That's why money-laundering charges are part of most FCPA cases. Each shot-show defendant, for example, was charged with conspiracy to launder money. And it's why the DOJ uses the same law against corrupt foreign officials, as in the recent Haiti telco case. (The FCPA doesn't reach bribe takers, only bribe payers.)

The U.S. anti-money laundering law is 18 U.S.C. §1956. It packs a wallop -- a fine of a half million dollars or more, and up to 20 years in prison. (Jail terms for FCPA anti-bribery violations are five years maximum.)

What's a money-laundering offense? Knowingly using money that comes from an illegal activity; trying to conceal or disguise the nature, location, source, ownership, or control of the proceeds of unlawful activity; or trying to avoid reporting a transaction that has to be reported under state or federal law.

Foreigners are subject to the U.S. anti-money laundering law if any part of their transaction happens in the U.S., if they use property in which the U.S. has an interest (through a judgment, lien, or court order), or if they maintain a bank account at a financial institution in the U.S.

Just as bribery usually involves money laundering, money laundering usually involves tax evasion. Again in the Haiti telco case, it was the IRS's Miami field office that investigated Robert Antoine, the former director of international affairs for Haiti telco, who lived in both Miami and Haiti. He pleaded guilty last week to a money-laundering conspiracy (same statute; same potential penalties).

Evidence of money laundering often leads to discovery of other crimes. On its extensive AML website, the University of Exeter says:

Although money laundering is a threat to the good functioning of a financial system, it can also be the Achilles heel of criminal activity. In law enforcement investigations of organised criminal activity, it is frequently the connections made through financial transaction records that allow hidden assets to be located and that establish the identity of the criminals and the criminal organisation involved.

The DOJ hasn't said how often it finds FCPA offenses through money-laundering investigations.  

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.

Sunday
Jan102010

Non-Public Issuer Discloses Investigation

In what may be the first case of its kind, a U.S. company that has no securities traded on an exchange but files periodic reports with the Securities and Exchange Commission has disclosed an internal investigation into possible Foreign Corrupt Practices Act violations.

In a December 30, 2009 SEC filing (here), Tampa-based PBSJ Corporation said it will miss the filing deadline for its Annual Report on Form 10-K for the year ended September 30, 2009 "due to an internal investigation being conducted by the Audit Committee of the Board of Directors." The company said the purpose of the internal investigation "is to determine whether any laws have been violated, including the Foreign Corrupt Practices Act, in connection with certain projects undertaken by PBS&J International, Inc., one of the Company’s subsidiaries, in certain foreign countries."

The FCPA's antibribery provisions apply to "domestic concerns," which include all U.S. companies; the books and records and internal controls provisions apply only to "issuers" -- corporations that have issued securities that have been registered in the United States or who are required to file periodic reports with the SEC. See 15 U.S.C. §§ 78c(a)(8), 78dd-1(a) and our post here.

PBSJ Corporation is a "domestic concern" subject to the anti-bribery provisions. It has no publicly traded securities. But because it has so many shareholders -- about 4,000 mainly current and former employees  -- it must file periodic reports with the SEC. That makes it an "issuer" subject to the books and records and internal controls provisions.

The Company said it self-reported to the SEC and Justice Department "the circumstances surrounding this internal investigation. Should the SEC or DOJ decide to conduct its own investigation, the Company will cooperate fully."

PBSJ provides engineering and construction management for government agencies worldwide, usually for road-building projects. It has 80 offices and 3,900 employees.

The company has had other compliance problems and internal controls lapses. The Tampa Business Journal said in March 2005 PBSJ discovered "what eventually was determined to be a $36.6 million embezzlement scheme by the former CFO and two other workers. Discovery of the scheme triggered a series of events, including repayments to clients that had been overbilled in an effort to cover the missing funds and a restatement of financial information for several years."

The company was also investigated by the Federal Election Commission. The FEC said for years PBSJ hid  campaign contributions to political candidates. It also encouraged employees to contribute to campaigns, then secretly reimbursed them for their payments, which violates the law.

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).

Wednesday
Dec022009

Tesler Fights Extradition; Jefferson Appeals

The London lawyer accused by the U.S. of being a middleman in KBR's bribery of Nigerian officials appeared in court last week to fight extradition. Jeffrey Tesler, 61, a U.K. citizen, was indicted in February by a federal grand jury in Houston. He was charged with one count of conspiring to violate the Foreign Corrupt Practices Act and ten substantive FCPA offenses. If convicted on all counts, he faces up to 55 years in prison. U.K. police, acting at the request of U.S. authorities, arrested Tesler in March.

According to a Press Association report, Tesler argued in the City of Westminster Magistrates' Court that his case is already under investigation by the U.K.'s Serious Fraud Office and shouldn't be duplicated by American prosecutors.

Tesler's lawyer, Bill Clegg QC, also said Tesler's case isn't linked to the U.S. "No person who was alleged to have received a bribe was promised a bribe in the U.S.A. No money to pay any bribes originated from any U.S. bank account. Mr Tesler, who it is alleged arranged the bribes, had never visited the U.S. in relation to the alleged conspiracy." The alleged bribes, Clegg said, were handled by a Gibraltar company and paid through Swiss bank accounts.

The U.S. indictment charged Tesler with using his Gibraltar company, Tri-Star Investments, to funnel about $132 million in bribes to Nigerian officials. The payments were intended to secure contracts worth more than $6 billion to build liquefied natural gas facilities on Nigeria's Bonny Island. The DOJ said Tesler was acting for a joint venture known as TSKJ, equally owned by KBR, Technip, SA of France, Snamprogetti Netherlands B.V. (a subsidiary of Saipem SpA of Italy) and JGC of Japan.

The Crown's lawyer, David Perry QC, said U.S.-based companies were involved and money had been channelled through U.S. bank accounts. According to a report in the Guardian, Perry said the allegations against Tesler could be criminal offenses "in Britain as well as the U.S., so extradition could take place under normal legal rules."

In the indictment, the U.S. made this claim of jurisdiction:

At all times relevant to this Indictment, Tesler was an "agent" of an "issuer" within the meaning of the FCPA, Title 15, United States Code, Section 78dd- 1, an "agent" of a "domestic concern" within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2, and an "agent" of a "person" within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.

The London court continued Tesler's extradiction hearing.

 *   *   *

Down But Not Out. Former congressman William Jefferson, sentenced last month to 13 years in prison for corruption and conspiring to violate the Foreign Corrupt Practices Act, managed to file his notice of appeal on time. It was touch-and-go after Jefferson, 62, filed for bankruptcy in August, saying he owes his criminal defense lawyers more than $5.7 million. But two of the lawyers are sticking with him.

The Times Picayune reported that attorneys Robert Trout and Amy Jackson received approval last week from the trial judge, T.S. Ellis III, for the court to pay Jefferson's legal fees for the appeal. The lawyers won't get their full rates but a lower amount equivalent to court-appointed public defenders. Ellis also approved their request for the court to pay for a transcript of the six-week trial, probably about $26,000.

Jefferson is free on bail pending his appeal. It's expected to take at least a year. Judge Ellis said he released Jefferson because his defense raised an argument that's untested in the appellate courts. Jefferson says he was acting as a private citizen, while a corruption statute he was convicted under applies only to public acts by elected officials. The judge also said he regretted not making the jury's verdict form more specific. (See our post here.)

Jefferson was convicted on 11 charges -- conspiracy, soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering. He was acquitted of five charges, including Count 11 of the indictment -- the only substantive FCPA charge he faced.

Sunday
Sep272009

The Statecraft Of Enforcement

Should the Foreign Corrupt Practices Act be used to punish nations that don't behave the way the United States wants them to? Michael Jacobson (left) from the Washington Institute thinks so. In the September 24 issue of Policy Watch, he proposes targeted enforcement of the FCPA against non-U.S. companies that do business with Iran (U.S. companies aren't allowed there under current law). The purpose is to sanction the country and its leaders on the nuclear issue.

Jacobson's thinking goes like this: Tehran deserves punishment. The U.N. can't do it because China and Russia won't get behind effective sanctions. But the FCPA reaches all foreign companies that have securities registered in the U.S. Some of those foreign companies are doing business with Iran. That country's leaders are corrupt and most deals they do probably violate the FCPA's anti-bribery provisions. Therefore, the Justice Department and Securities and Exchange Commission should target FCPA enforcement against foreign companies doing business with the regime. That will discourage trade with Iran and ultimately inflict real damage on the leadership there. While unilateral U.S. action will work, Jacobson says, the best scenario is for other OECD countries to adopt the same approach under their respective anti-corruption laws.

Is this a serious idea?

Well, the Washington Institute where Michael Jacobson works is a serious think tank. On its board of advisers are five former Secretaries of State -- Warren Christopher, Lawrence Eagleburger, Alexander Haig, Henry Kissinger and George Shultz. Among the other board members are Martin Peretz, editor in chief of the New Republic, Richard Perle, a former Assistant Secretary of Defense, James Woolsey, a former director of the CIA, and Mort Zuckerman, publisher of U.S. News and World Report. That's a lot of horsepower.

Jacobson's bio says he specializes in counterterrorism and intelligence -- particularly "sanctions and financial measures to combat national security threats." Before joining the Washington Institute, he was a senior advisor in the Treasury Department's Office of Terrorism and Financial Intelligence and counsel on the 9-11 Commission. He also worked for the FBI, first as an intelligence analyst, then as assistant general counsel. He holds "a bachelor's degree in psychology from Brandeis University, a master's degree in international relations from Tufts University, and a law degree from Boston College Law School."

So yes, this looks like a serious proposal. But is it a good idea?

We're against corruption and the spread of nuclear weapons. Who isn't? And we know dealing with Iran is frustrating; carrots don't work and there aren't many sticks to reach for. Still, the cost of using the FCPA as a sanction would be high, and it probably wouldn't work.

Today the Foreign Corrupt Practices Act is admired around the world. Called "one of Congress's finer moments" by the Wall Street Journal, it's a hopeful statute that stands for ethics in business and government. Once politicized, however, it'll be just another symbol of heavy-handed and overreaching American diplomacy that's resented overseas. At home, injecting the DOJ and SEC so deep into U.S. foreign policy would compromise their integrity as crime-fighting agencies, with implications far beyond FCPA enforcement.

What's more, using the FCPA to sanction Iran (or any country) is likely to backfire. Targeted enforcement might keep clean money out. But as we heard from Andy Spalding earlier this year, that would open the door for investors from countries "not committed to effectively enforcing anti-bribery measures," like Russia and China, making it even easier for crooked leaders to skim funds from military and civilian projects. End result: more corruption and no less nuclear development.

* * *
RIP William Safire. From Time magazine: "Not for Safire the clodden metaphors, arch constructions, one-sentence paragraphs and dreary wonkery that are the stock in trade of too many modern American columnists. He was of that generation of inky-fingered wretches who remembered that it is not a sin for journalism to entertain — indeed, that one way you can get across a point about which you feel passionately is to make people smile while they are absorbing it."
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Tuesday
Sep222009

The Fugitive Files, Part III

When Suleiman A. Nassar was indicted in 1994 for violating the Foreign Corrupt Practices Act, he was a regional vice president of Lockheed International living near Geneva, Switzerland. His territory for Lockheed included Egypt, and in the late 1980s he landed a nice sale there -- three C-130 military cargo planes worth $79 million. But he won the business, the Justice Department said, by bribing a member of the Egyptian parliament with a million dollars. The DOJ indicted him, along with a co-worker and Lockheed itself.

Before issuing the indictment, the Justice Department spoke with Nassar, a Syrian-born, naturalized U.S. citizen. He assured prosecutors he would appear voluntarily in Atlanta, where the case would be filed. They in turn agreed not to have him arrested in Europe, which would have triggered a long extradition process. It was a gentlemanly arrangement but Nassar had other intentions. He never showed up in Atlanta and instead did his best to vanish.

He fled to his birthplace, Syria, a country with no extradition treaty or law-enforcement agreements with the U.S. Prosecutors said later they were "disappointed and frustrated" by Nassar's escape. But they didn't give up.

They tracked him to Damascus after Swiss police noticed that his wife was receiving mail from an address there. But how to get him back? As the prosecutors said, the relationship between America and Syria was, at best, "notoriously tenuous."

One thing the Justice Department could do was make his life difficult. When he sold two condos in Washington, D.C., prosecutors used the Federal Debt Collection Procedures Act ( 28 U.S.C. § 3001, et seq.) to block the international transfer of the sale proceeds. Then they used the ancient All Writs Act (28 U.S.C. § 1651)* to freeze Nassar’s worldwide assets -- including pension payments that eventually amounted to about $750,000. Prosecutors even threatened to freeze an inheritance his wife was about to receive, on the grounds that she might use the money to help her husband evade arrest.

The Syrians, meanwhile, did their part too. They arrested Nassar in late September 1994 under an Interpol warrant circulated by the U.S. They held him in jail until he made bail two months later. Once released, he stayed in Damascus -- the local police had impounded his passport -- and nothing further happened. The Americans couldn't extradite him, the Syrians wouldn't keep him locked up, and everyone assumed the case was stuck. But they were wrong.

In January 1995, Lockheed pleaded guilty to violating the Foreign Corrupt Practices Act. That generated global headlines, leading the Syrian government to take a new interest in their now-notorious FCPA fugitive. In March 1995, DOJ prosecutors were meeting with the Syrian justice minister. He chose that moment to deliver some dramatic news: Nassar had just been arrested "on charges of violating the Foreign Corrupt Practices Act, and that under the doctrine of extraterritoriality, the Syrian Government intended to try him in Damascus." As U.S. prosecutors said later, it wasn't exactly the trial they had in mind.

But by then Nassar was exhausted and scared. The global freeze on his family's assets, two arrests, a looming Syrian criminal trial, the prospect of years in a local prison -- he'd had enough. According to the DOJ's account, in July 1995 their man was "released from Adra Prison in Syria and escorted to the Damascus Airport where he boarded a plane for Frankfurt, Germany. There he was met by Special Agent Chris Amato of the Defense Criminal Investigation Service, taken to Atlanta, and placed under arrest."

Nassar agreed to plead guilty to violating the FCPA. By prior arrangement, he was sentenced to 18 months in prison and fined $125,000, to be paid from his frozen funds before they were released. His co-worker Allen Love pleaded guilty to lying to investigators and was fined $20,000. Lockheed's guilty plea to conspiracy to violate the FCPA's antibribery provisions resulted in penalties of $24.8 million.

A final note: Suleiman A. Nassar -- who almost became the first person to be tried outside the United States for violating the Foreign Corrupt Practices Act -- was the first person ever imprisoned in the U.S. for an FCPA offense.

* * *
This post is adapted in part from an article called "The International Fugitive," by Martin J. Weinstein and Daniel A. Caldwell of the U.S. Attorneys' Office for the Northern District of Georgia. The article appeared in the USA Bulletin for December 1996, Volume 44, Number 6, which can be downloaded here.

Parts I and II of the Fugitive Files can be found here and here.

We're grateful to Cody Worthington, whose outstanding research was the basis for our series on FCPA fugitives.
___________

*The All Writs Act (28 U.S.C. § 1651) provides: (a) The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law. (b) An alternative writ or rule nisi may be issued by a justice or judge of a court which has jurisdiction.
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