Haiti Telco Official Pleads Guilty

A former director of state-owned Telecommunications D’Haiti accused of accepting bribes has pleaded guilty in Miami to conspiracy to launder money.

Patrick Joseph, 46, agreed to cooperate with the DOJ in exchange for consideration of a lighter sentence. He faces up to twenty years in prison and already agreed to forfeit $955,000 as part of his plea.

No sentencing date was set.

He appeared Wednesday in federal court before Judge Jose E. Martinez.

In October last year, Judge Martinez sentenced two other defendants in the massive case to long jail terms. Joel Esquenazi, 52, the former president of Terra Telecommunications Corp., received a fifteen year prison term. Carlos Rodriguez, 55, the former executive vice president of Terra, was given an 84-month sentence. They were convicted of multiple FCPA and money laundering counts.

Download a copy of the plea agreement in US v. Patrick Joseph here.

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Four other individuals have been convicted and sentenced for their roles in the Haiti telco case.

In 2009, Antonio Perez, a former controller at Terra, and Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. Last year Perez was sentenced to 24 months in prison and Diaz to 57 months. Both are now serving their jail terms.

In February last year, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty in the case to one count of money laundering for receiving and transmitting bribes. He was sentenced to six months in prison.

Also last year, Robert Antoine, a former director of international affairs for Haiti Telco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted taking more than $1 million in bribes from Miami-based telecommunications companies. He was sentenced to 48 months in prison, which he's now serving.

Other defendants indicted in the case are Washington Vasconez Cruz, Amadeus Richers, Cinergy Telecommunications Inc., Patrick Joseph, Jean Rene Duperval, and Marguerite Grandison. They're charged in a related scheme to commit foreign bribery and money laundering from 2001 through 2006.

Measuring Naaman's Jail Time

How does the thirty-month prison term Ousama Naaman received last week compare with other FCPA sentences?

It's near the middle.

Here are some shorter sentences:

In January this year, Antonio Perez received two years in prison in the Haiti Telco case. He admitted paying $36,375 in bribes.

Leo Winston Smith was given just six months jail time in December 2010. The former salesman for Pacific Consolidated Industries was 75 and in poor health.

In October 2010, Bobby Jay Elkin Jr., a country manager in Kyrgyzstan for tobacco company Dimon Inc, copped just three years probation. The judge called him a hero for helping his subordinates during local rioting.

In September 2010, Nam Nguyen was sentenced to sixteen months in prison. His brother, An Nguyen, received nine months, and their sister, Kim Nguyen, was sentenced to two years probation.

Joseph Lukas, a co-defendant with the Nguyens, was let off with two years probation.

In August 2010, Hollywood couple Gerald and Patricia Green got six months in jail. Gerald Green, 78, was suffering from emphysema.

Frederic Bourke was sentenced in 2009 to a year and a day in prison. The judge said, “After years of supervising this case, it’s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both.”

In all those cases, as in Naaman's, the DOJ had asked for more jail time.

Some longer FCPA-related prison terms are shown below. Five of those defendants, including Joel Esquenazi, were sentenced in the U.S. District Court for the Southern District of Florida (Miami), known as a tough sentencing venue.

In October, Esquenazi received a fifteen-year prison term -- the longest in an FCPA-related case. A jury convicted him on multiple related charges -- one count of conspiracy to violate the FCPA and commit wire fraud, seven substantive FCPA counts, one count of money laundering conspiracy, and twelve counts of money laundering. Each money laundering-related count carried a maximum twenty-year sentence.

Chart courtesy of Michael Volkov of Mayer Brown LLP in Washington, D.C. Volkov is the primary contributor to the Corruption, Crime & Compliance Blog.

Feds Drop Green Appeal; Siriwan Facing Prosecution At Home

The government on Tuesday ended efforts to put a Hollywood producer and his wife back in prison.

Gerald Green, 79, and his wife Patricia, 56, were released from federal custody in May after serving six-month jail terms for FCPA and money-laundering violations.

An LA jury convicted them in 2009 of paying $1.8 million in bribes to Juthamas Siriwan, left, then-governor of the Tourism Authority of Thailand, in exchange for $13.5 million in contracts to produce the Bangkok film festival.

In October last year, the government filed a notice of appeal against the Greens' short jail sentences.

Prosecutors had pushed for prison terms of at least ten years. But Judge George Wu gave them each six-months behind bars, followed by three years of supervised release. 

The Justice Department won a forfeiture count, leaving the Greens indigent and needing court-appointed lawyers.

The DOJ's appeal made our list of the worst FCPA prosecution decisions ever.

In Bangkok Tuesday, Thailand's National Anti-Corruption Commission (NACC) ruled against the former tourism official.

The Bangkok Post said Juthamas Siriwan can now be prosecuted in Thailand for accepting bribes from the Greens.

Siriwan, 64, and her daughter, Jittisopa Siriwan, 32, are fugitives from a U.S. indictment. In January last year, a federal grand jury in Los Angeles charged them with eight counts of conspiracy to launder money, transporting funds to promote unlawful activity, and aiding and abetting. The DOJ is also seeking criminal forfeiture against them.

They didn't appear in U.S. court to answer the charges.

Siriwan was found by the NACC to have  'committed criminal offences as a former state official in connection with the case.' Her daughter was found to be complicit. The finding means they can now be prosecuted in a Thai court.

The Bangkok Post said Siriwan was invited to testify at the NACC hearing but didn't appear.

Thailand and the United States have an extradition treaty. But according to the Bangkok Post, the Thai attorney general's office hasn't received any extradition request from the U.S. for Siriwan and her daughter.

Download a copy of the government's August 23, 2011 voluntary dismissal of the appeal against the Greens' sentences here.

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Our thanks to the reader in D.C. who sent the link to the Bangkok Post story about Juthamas Siriwan.

New Indictment In Old Haiti Bribe Case

The DOJ said today that a superseding indictment has charged six defendants, including four newly named defendants and two former Haitian government officials, in a bribery and money-laundering scheme that started ten years ago.

Cinergy Telecommunications Inc., Cinergy’s president and director, the president of Florida-based Telecom Consulting Services Corp. and two former Haitian government officials were charged with being part of a bribery and money-laundering scheme from 2001 through 2006.

The indictment alleges that Cinergy and its related company, Uniplex Telecommunications Inc., paid more than $1.4 million to shell companies to be used for bribes to foreign officials of the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco).

To conceal the bribes, the defendants allegedly used shell companies to receive and forward the payments, including J.D. Locator Services, Fourcand Enterprises, and Telecom Consulting Services. 

The six defendants are:

• Washington Vasconez Cruz, 63, of Miami, the president of Cinergy and Uniplex. He's charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering.

• Amadeus Richers, 60, of Pembroke Pines, Fla., and Brazil, the then-director of Cinergy and Uniplex. He's charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering.

• Cinergy Telecommunications Inc., a privately-held telecommunications company incorporated in Florida. It's charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering, and 19 counts of money laundering.

• Patrick Joseph, 49, of Miami and Haiti, a former general director for telecommunications at Haiti Teleco. He's charged with one count of conspiracy to commit money laundering.

• Jean Rene Duperval, 44, of Miramar, Fla., and Haiti, a former director of international relations for telecommunications at Haiti Teleco, who's charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering.

• Marguerite Grandison, 42, of Miramar, the former president of Telecom Consulting Services Corp., and Duperval’s sister, is charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering.

The superseding indictment also charged Duperval and Grandison with laundering corrupt payments authorized by Joel Esquenazi and Carlos Rodriguez on behalf of another Florida telecommunications company.

Duperval was first charged in 2009 with one count of conspiracy to commit money laundering and 12 counts of money laundering. Grandison was originally charged with one count of conspiracy to violate the FCPA and to commit wire fraud, seven counts of FCPA violations, one count of conspiracy to commit money laundering, and 12 counts of money laundering.

Esquenazi and Rodriguez were charged in the initial December 2009 indictment and aren't affected by the superseding indictment. Their trial is set to start in Miami on July 18.

In 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted receiving more than $1 million in bribe money from telecommunications companies. In July last year, he was sentenced to 57 months in prison.

In 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme.  In May last year, he was sentenced to six months in prison.

Also in 2010, Robert Antoine, the former director of international affairs for Haiti Telco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. He was sentenced in June last year to 48 months in prison.

Conspiracy to violate the FCPA and substantive FCPA counts carry a maximum penalty of five years in prison, as do wire-fraud counts. Money laundering counts each carry a maximum penalty of 20 years in prison. The DOJ also included a criminal forfeiture count in the superseding indictment.

As the DOJ says, an indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.

View the DOJ's July 13, 2011 release here.

ICE, DOJ Trade Arguments In First FCPA 'Victims' Case

Just three directors and three employees out of 16,000 personnel at Costa Rica's Instituto Costarricense de Electricidad, S.A. (ICE) benefited from Alcatel-Lucent's bribery, ICE said in a filing this weekend.

That makes ICE a victim and entitled to restitution under U.S. federal law, it said.

Last week the DOJ argued that ICE isn't a real victim but a corrupt institution ineligible for the benefits it's asking for.

This is the first time a U.S. court has been asked to grant victim's status to an overseas government-linked institution in an FCPA enforcement action.

ICE is trying to block Alcatel-Lucent's FCPA settlement with the DOJ and SEC until the court orders restitution, which is mandatory under 18 U.S.C. § 3663A, ICE said.

What about ICE's own corruption? "Every commercial bribery episode," ICE noted, "has dishonest individuals who dishonor and violate the trust accorded to them by their employers so they can channel business in return for payments."

Taking a bribe isn't the same as paying one, ICE said. Alcatel-Lucent benefited by obtaining or retaining business. That's why its employee's criminal actions should be imputed to it. But the bribery hurt ICE, so the bribe-taking of its personnel shouldn't be used to block restitution.

Granting victim's status and rights of restitution to overseas state-owned enterprises and others would likely complicate FCPA enforcement actions.

Last week, the DOJ said in a court filing that even if ICE is a victim, restitution is limited to the victim’s "provable actual loss." ICE's loss can't be established within a reasonable time, if at all, the DOJ said.

In its response filed Friday evening, ICE argued that its losses aren't that hard to establish. But even if doing the math causes some delays to the Alcatel-Lucent settlement, that's okay if justice is served, ICE said.

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Download ICE's May 27, 2011 reply to the DOJ's opposition to ICE's petition for relief and restitution here.

Download a copy of the DOJ's brief here, and Alcatel-Lucent's brief here.

Download a copy of ICE's May 2, 2011 petition for relief pursuant to 18 U.S.C. §3771(d)(3) and objection to plea agreements and deferred prosecution agreement in U.S. v. Alcatel-Lucent S.A. here.