Frederic Cilins, 51, a French citizen, pleaded guilty Monday in the Southern District of New York to obstructing a federal criminal investigation into whether a mining company paid bribes to win mining rights in the Republic of Guinea.
Entries in Obstruction (10)
Did someone say FCPA enforcement had slowed down? Look again.
The DOJ said Monday a French citizen has been arrested and charged with trying to obstruct a federal investigation into whether a mining company paid bribes to win mining rights in the Republic of Guinea.
How long is the statute of limitations for FCPA offenses?
The former associate general counsel of GlaxoSmithKline who won dismissal without prejudice of an obstruction and false statement indictment last month has been reindicted.
Two recent cases have focused attention on the hard choices faced by company counsel involved in criminal investigations and prosecutions.
The DOJ last week unilaterally dismissed the obstruction charge against Hong "Rose" Carson, one of the four defendants from Control Components Inc. now awaiting trial in federal court in California.
Here's a chilling warning to company lawyers who may become involved in FCPA investigations.
For allegedly flushing documents down a toilet before an interview with company lawyers, Rose Carson is facing 20 years in prison. Who's warning employees about the "federal" aspects of internal investigations?
On August 17, 2007, the government alleges, Hong "Rose" Carson learned that her employer, California-based Control Components Inc., had hired lawyers to conduct an internal investigation into corrupt payments overseas. Just prior to her interview, prosecutors say, she tore up documents relevant to the internal investigation and flushed them down a toilet in CCI's ladies room.
She goes on trial in November. With her will be her husband, Stuart Carson, and Paul Cosgrove, David Edmonds, Flavio Ricotti, and Han Yong Kim. They were all indicted in April 2009, charged with 15 counts of making corrupt payments to foreign officials and private parties to obtain or retain work for CCI. The charges include conspiracy, and violating the FCPA and the Travel Act.
But Rose Carson faces an additional count, one that carries a maximum penalty of 20 years in prison. The DOJ charged her "with obstructing an investigation within the jurisdiction of a federal agency when she destroyed documents relevant to CCI’s internal investigation of the corrupt payments by flushing them down the toilet of CCI’s ladies’ restroom."
Obstructing a federal investigation? That's right. Even though she allegedly flushed the documents before an interview that was part of CCI's internal investigation, she's charged with a federal crime.
The charge is based on Section 802 of the Sarbanes-Oxley Act of 2002 -- codified at 18 U.S.C.§ 1519 -- which says:
Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States . . . or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.
CCI had made a a voluntary disclosure to the government on August 15, 2007, two days before Carson allegedly flushed the documents down the toilet in the ladies room. Did the timing of CCI's disclosure matter?
Maybe not. In United States v. Ray, No. 2:08-cr–01443 (C.D. Cal. Dec. 15, 2008), the government charged Gary Ray, the former head of human resources at KB Homes, with obstruction under 18 U.S.C.§ 1519. The government said he tried to mislead his company's general counsel's internal investigation into stock-option grant practices before any federal investigation was pending or planned. The federal crime was lying to company counsel and it didn't matter what the government then knew or intended to do.
The lesson is clear. Company counsel investigating FCPA-related offenses are "deputized" by federal law. Lying to them, or destroying evidence to keep it from them, can be a federal crime punishable by 20 years in prison.
How many employees (or even directors and officers) know that?