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Entries in William Jefferson (41)

Tuesday
Aug252009

Indicted: Taking Aim At Individuals

It's not just about corporations anymore. FCPA enforcement is now about individuals too -- and in a big way. Here's this year's FCPA roll call of real people: Gerald and Patricia Green, whose Foreign Corrupt Practices Act trial opened in LA this week. Frederic Bourke and William Jefferson went on trial in June; both were convicted of conspiracy to violate the FCPA.

Awaiting trial in California are six former employees of Control Components Inc. -- Stuart Carson and his wife Hong (Rose) Carson, along with Paul Cosgrove, David Edmonds, Flavio Ricotti and Han Yong Kim. Earlier this year, two other former CCI executives pleaded guilty to conspiring to violate the FCPA. Mario Covino and Richard Morlok are scheduled to be sentenced in January 2010.

FCPA prosecutions are also pending against former employees of Philadelphia-based Nexus Technologies Inc. -- Nam Nguyen, Kim Nguyen and An Nguyen. Joseph T. Lukas, also from Nexus, pleaded guilty in June to violating the FCPA. His sentencing is scheduled for April next year.

Juan Diaz and Antonio Perez of Miami pleaded guilty in April to a one-count criminal information charging them with conspiracy to violate the FCPA. They arranged bribes to Haitian officials in exchange for telecommunications contracts. They're waiting to be sentenced.

Jeffrey Tesler and Wojciech Chodan were arrested in March in the U.K. on U.S. indictments in connection with KBR's Nigerian bribery. And Ousama Naaman was arrested in July in Frankfurt, Germany, charged in a U.S. indictment with violating the FCPA under the oil-for-food program. All three are facing extradition to the U.S.

An indictment isn't evidence or proof of guilt, of course, and every accused individual is presumed innocent. But beyond being an "enforcement action," an indictment is a full-blown personal tragedy -- with emotional damage, family stresses, economic hardship, and professional wreckage. It takes a Scott Turow to imagine and describe the awful consequences.

* * *
Aside from the human cost, what happens when someone is indicted? First they're arrested and they formally become a defendant, and their indictment is (usually) unsealed and made public. Federal criminal cases can also begin without an indictment when the lead investigator swears out a criminal complaint called an "information."

Within hours of arrest, the defendant makes an initial court appearance. He hears the charges against him, the judge tells him his rights, and counsel is appointed if he can't afford to hire one. Stuart Carson's April 9, 2009 statement of constitutional rights can be downloaded here.

After the hearing, the defendant is remanded to the custody of the U.S. Marshals Service or released on conditions set by the court -- such as requiring a secured bond, forfeiture of a passport, electronic monitoring, home confinement, etc.* Stuart Carson's April 11, 2009 amended conditions of release can be downloaded here.

The last of the early hearings is arraignment, when the defendant's counsel is asked three questions:

Does the defendant waive a formal arraignment, at which the indictment would be read in its entirety? He usually does.

How does the defendant plead, guilty or not guilty?

Does the defendant request a trial by jury? He usually does. If not, the case will be decided by the judge in what's known as a bench trial.

If formal arraignment is waived the hearing might be over in five minutes.

Under the Speedy Trial Act, criminal defendants are entitled to a trial that begins no later than 70 days from the date the indictment or information was filed, or from the date the defendant appears before a judge, whichever is later. White-collar defendants usually waive the right to a speedy trial; the judge can also waive the speedy-trial requirements in the interests of justice.

Then it's time for pre-trial motions. Common defense motions include change of venue, exclusion of certain pieces of evidence, and requests for access to evidence held by the prosecution.

What about the trial? Well, more than 90 percent of federal criminal defendants don't have one. They plead guilty during the pretrial phase as part of a plea bargain, in exchange for the prosecutors' dropping some charges or recommending a more lenient sentence.
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* The Bail Reform Act of 1984 presumes the defendant should be released on personal recognizance or unsecured personal bond unless it will "not reasonably assure the appearance of the person as required or will endanger the safety of any other person or the community."

This description of federal criminal procedure is adapted from information provided by the Administrative Office of the U.S. Courts here.
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Wednesday
Aug122009

Juiced Up Enforcement

For those who missed any of the FCPA enforcement news during the recent hyper-active stretch, here's what happened:

July 28 -- Label-maker Avery Dennison Corporation resolved civil and administrative charges brought by the Securities and Exchange Commission. The SEC filed settled enforcement actions in the United States District Court for the Central District of California charging Avery with violating the FCPA's books and records and internal controls provisions. In the administrative action, the SEC ordered Avery to disgorge $273,213 plus $45,257 in prejudgment interest. In the federal civil action, Avery will pay a civil penalty of $200,000.

July 30 -- Oil and gas driller Helmerich & Payne Inc. was hit with a $1 million criminal penalty by the Justice Department to settle Foreign Corrupt Practices Act violations related to improper payments to government officials in Argentina and Venezuela. The SEC ordered the Tulsa, Oklahoma-based firm to disgorge $320,604 plus prejudgment interest of $55,077.22.

July 31 -- The Justice Department announced that valve-maker Control Components Inc. (CCI) of Rancho Santa Margarita, California pleaded guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act (15 U.S.C. §78dd-2) and the Travel Act (18 U.S. C. §1952). CCI admitted bribing foreign officials and private parties in a decade-long scheme to secure contracts in about 36 countries. CCI's plea agreement requires it to pay a criminal fine of $18.2 million, implement an anti-bribery compliance program, retain a compliance monitor for three years, serve a three-year term of organizational probation, and cooperate with ongoing investigations.

July 31 -- The SEC filed a settled enforcement action against Nature's Sunshine Products Inc. (NSP), its Chief Executive Officer Douglas Faggioli. 54, and its former Chief Financial Officer Craig D. Huff, 53. According to the SEC, the charges relate to cash payments made in 2000 and 2001 by the Brazilian subsidiary of NSP, a manufacturer of nutritional and personal care products, to import unregistered products into Brazil and the subsequent falsification of its books and records to conceal the payments.

July 31 -- The Justice Department said a Canadian citizen has been indicted for his alleged role in an eight-year conspiracy to defraud the United Nations Oil for Food Program and to bribe Iraqi government officials in connection with the sale of a chemical additive used in refining leaded fuel. Ousama Naaman, 60, of Abu Dhabi, United Arab Emirates, was indicted on Aug. 7, 2008, in U.S. District Court for the District of Columbia. The indictment charges Naaman, who's in Germany, with one count of conspiracy to commit wire fraud and to violate the Foreign Corrupt Practices Act and two counts of violating the FCPA.

August 4 -- The year's third Foreign Corrupt Practices Act trial started when the husband-and-wife movie producers arrested in 2007 faced a federal jury in Los Angeles. Prosecutors allege that Gerald and Patricia Green paid more than $1.8 million in bribes to a former governor of the Tourism Authority of Thailand in return for $14 million in contracts to stage the Bangkok Film Festival. In July this year, Frederic Bourke was convicted of conspiracy to violate the FCPA. And . . .

August 5 -- William Jefferson, the former nine-term congressman from Louisiana, was found guilty of 11 of 16 corruption charges by a federal jury, including conspiracy to violate the Foreign Corrupt Practices Act. He was acquitted of a substantive charge of violating the FCPA. He was also found guilty of soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes.

* * *
Another day, another lesson. Concerning state-law violations underlying federal Travel Act charges, a reader has pointed out that the CCI indictments weren't the first. He or she cited U.S. v. David H. Mead and Frerik Pluimers, (Cr. 98-240-01) D.N.J., Trenton Div. 1998, where defendant Mead was convicted following a jury trial of conspiracy to violate the FCPA and the Travel Act (incorporating New Jersey's commercial bribery statute) and two counts each of substantive violations of the FCPA and the Travel Act. The reader said there have been other similar cases. For us (and others we've heard from), it's been a prosecutorial tactic hidden in plain sight. Our eyes are now open. And we say again: Compliance programs shouldn't overlook the dangers of bribes to private parties overseas.

* * *
We remember laying on our back as a kid, outdoors on clear nights in New Hampshire, mesmerized by the annual Perseid meteor shower. This week we were city-bound and missed the show. Maybe next year.

* * *
We're outta here for a three-day weekend. Thanks to everyone who helped make this another great week. See you Monday.
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Wednesday
Aug052009

Jefferson Convicted of Conspiracy to Violate the FCPA

William Jefferson, the former nine-term congressman from Louisiana, was found guilty of 11 of 16 corruption charges on Wednesday by a federal jury, including conspiracy to violate the Foreign Corrupt Practices Act. He was also found guilty of soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes. He was acquitted of a substantive charge of violating the FCPA.

A chart showing the charges and the verdict can be downloaded from the Times Picayune here.

Jefferson's case started in 2005 when the FBI raided his congressional office. He then became the first elected U.S. official to be charged under the Foreign Corrupt Practices Act. A 16-count indictment alleged among other things that he conspired to bribe the then Nigerian vice president, Atiku Abubakar, and later paid or promised to pay him bribes to steer telecommunications contracts to companies controlled by Jefferson's family.

The jury convicted Jefferson on Count 1 of the indictment that charged him with conspiracy to solicit bribes, deprive citizens of honest services, and violate the FCPA. The Times Picayune reported that the law only required the jury to find Jefferson guilty on two out of three of those charges -- conspiring to solicit bribes, deprive honest services, or violate the FCPA. The jury's verdict form did not require it to specify which conspiracy charges the panel agreed on. "It may or may not have included conspiracy to violate the Foreign Corrupt Practices Act," the paper said. Nevertheless, a guilty verdict will be recorded for the FCPA conspiracy charge under Count 1 of the indictment.

The jury acquitted Jefferson on Count 11 of the indictment -- the substantive FCPA charge.

Jefferson's case is best known for the FBI's discovery in August 2005 of $90,000 cash in the freezer of his Washington home. The money was given to Jefferson by Lori Mody, the government's cooperating witness who didn't testify at his trial. Prosecutors said Jefferson planned to use the cash to bribe Abubakar; Jefferson's lawyers said the cash in the freezer proved the ex-lawmaker didn't use the money as a bribe.

The jury deliberated five days before reaching a decision. Jefferson is now free pending his October 30 sentencing. He faces a maximum penalty of 150 years in prison. The jury will reconvene Thursday to decide whether he will also face forfeiture of up to $456,000 plus stock certificates.

His alleged co-conspirators were Vernon L. Jackson, a Louisville, Ky., businessman, and Brett M. Pfeffer, a former Jefferson congressional staff member. Jackson was sentenced to 87 months in prison after pleading guilty to conspiracy to commit bribery and paying bribes to a public official. Pfeffer was sentenced to 96 months in prison after pleading guilty to conspiracy to commit bribery and aiding and abetting the solicitation of bribes by a member of Congress.

Jefferson's lawyers are planning to appeal.

Read all our posts about William Jefferson here.
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Monday
Jul272009

Jefferson's Case Heads To The Jury

His defense took just two hours to present. Now, according to the Times Picayune, the jury will hear closing arguments Wednesday and begin deliberating William Jefferson's fate. Here's how the paper began its report of the final day of testimony:

In a moment of courtroom drama Thursday, the prosecutors in the corruption trial of William Jefferson withdrew their objections and let the former New Orleans congressman's attorneys play nearly 90 minutes of secretly taped recordings that the defense team said was crucial to his case.

"Play them all Mr. Trout, play them all," Judge T.S. Ellis III said to lead defense attorney Robert Trout after the government legal team relented under pressure from Ellis, who had promised jurors they would be done by 1 p.m. and promised his mother he would pick her up in advance of a long weekend, and "I'm not going to be late."

After more than five weeks of prosecution witnesses, the defense presented its entire case in about two hours.

Jefferson, 62, is the first member of congress to have been indicted under the Foreign Corrupt Practices Act. He's accused of violating the FCPA by arranging bribes to the vice president of Nigeria, Atiku Abubakar, in exchange for contracts for his family's companies, and with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. He faces up to 20 years in prison. He lost an election last year for a 10th term in the House of Representatives from a district that includes New Orleans.

Jefferson's case is best known for the cash found in his freezer. The FBI had given its cooperating witness, Lori Mody, $100,000 in marked bills to pass to him after he allegedly told her about his plan to bribe the Nigerian vice president. The money was supposed to be a down payment. The FBI later found $90,000 of that cash in Jefferson's freezer.

Read all our posts about William Jefferson here.
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Tuesday
Jul072009

A Russian Crusader Dies

One of Russia's leading anti-corruption journalists died last week from head wounds received two months ago in an attack outside his home. Vyacheslav Yaroshenko, 63, ran the paper Korruptsia i Prestupnost (Corruption and Crime) in Rostov-on-Don. The local media had reported that he either was in a brawl or fell down the stairs. He's pictured left.

A colleague from Yaroshenko's newspaper said it "has eight pages, seven of them were dedicated to corruption in the law enforcement agencies." He didn't "have the slightest doubt" Yaroshenko was attacked for his work. Korruptsiya i Prestupnost had been publishing articles on corruption in the Rostov regional government, police, and the prosecutor's office.

The New York-based Committee to Protect Journalists (CPJ) said in a June 29, 2009 statement that Yaroshenko was found unconscious with a head wound in the entrance of his apartment building early on the morning of April 30. Police did not investigate what happened to Yaroshenko in April, but said they had immediately ruled out criminality.

The CPJ said, "We call on Russian federal authorities to open an independent, thorough, and transparent investigation into the circumstances of the editor's death. The possibility that Yaroshenko may have been targeted because of his newspaper's coverage of alleged corruption in Rostov law enforcement agencies calls for the assignment of outside, independent investigators to this case."

Russia is the third deadliest country in the world for journalists and the ninth worst in solving reporters' killings, according to the CPJ. It wrote to President Obama two weeks ago to urge him to raise the issue of "impunity in violent crimes against the press" in his meetings this week with Russian President Dmitry Medvedev in Moscow.

* * *
From William Jefferson's Trial. We asked two days ago if the government will introduce evidence that the former congressman violated the Foreign Corrupt Practices Act as alleged in the indictment. The answer is yes.

The Times Picayune reports here that prosecutors played tapes Monday in which "Jefferson said that Vice President Atiku Abubakar of Nigeria had agreed to grease the skids for a telecommunications venture the congressman was promoting in Nigeria in exchange for a piece of the action." The report from Bruce Alpert said written transcripts of the tapes were provided to jurors but not to the news media and others.

The taped conversation about Abubakar took place during a car ride Jefferson went on with Lori Mody, the government's confidential witness. An undercover FBI agent drove. Mody wore a wire then and to several other meetings with Jefferson. His lawyers said before the trial that he wasn't really planning to pay any bribes but he made the statements about Abubakar to keep Mody happy.

Read all our posts about William Jefferson here.

* * *
From Frederic Bourke's Trial. The arguments are finished. David Glovin has a nice account here of the prosecution's close delivered Monday. "Connecticut entrepreneur Frederic Bourke stuck 'his head in the sand' to avoid learning whether his partner [Viktor Kozeny] paid bribes to government leaders in Azerbaijan in a 1998 deal to buy the state oil company, a prosecutor charged."

The Litigation Daily's report from Andrew Longstreth is here. He says,

The task [of delivering the closing for the government] fell to assistant U.S. attorney Iris Lan. Lan explained to the jury--which consists of eight women and six men--that in the 1990s Bourke had become close with his Aspen, Colo., neighbor Viktor Kozeny, a Czech national whom Fortune magazine dubbed one of the "Pirates of Prague" in 1996 for his investment activities in his native country as it was transitioning from communism to capitalism. Lan told the jury that Bourke was eager to participate in a plan with Kozeny to invest in Azerbaijan because of his previous success in Czechoslovakia. "This is a story about a few rich men who wanted to become even richer," said Lan.
And Adam Klasfeld at the Courthouse News Service said,
Lan's daylong summation involved extensive use of PowerPoint. Lan projected large portions of court records onto a screen, generously excerpting transcripts of government witness testimony. She flashed images of charts, letters, emails and photographs that prosecutors submitted as evidence.
Bourke's lawyer John Cline closed for the defense. David Glovin says jurors will be instructed that they can convict Bourke on two theories. Either that he learned about the bribes after asking two of the government's witnesses about the payments. Or that he “consciously avoided” learning about the bribes by not asking questions about them. Cline said in his close, “It just doesn’t make sense." The government is simply “throwing something up against the wall and hoping some of it will stick.”

The prosecution has already rebutted. After instructions, the case goes to the jury. A verdict by Friday? Maybe.

Read David Glovin's reports on the trial here.

Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.
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Sunday
Jul052009

In Jefferson's Case, What Gives?

Here's the question: Is William Jefferson still on trial for violating the Foreign Corrupt Practices Act? His indictment included an FCPA count and the cash found in his freezer was supposed to be evidence of an antibribery offense. But the ex-congressman's trial has been going on for a few weeks now and we haven't heard anything about the FCPA. So we're wondering if it's still part of the case.

The FCPA allegations against Jefferson were based on things he said to the feds' confidential witness -- called "CW" in the indictment. That's Lori Mody, a Virginia businesswoman who invested in his deals. According to the government, she soon realized he was crooked and decided to blow the whistle. She went to the FBI and they convinced her to wear a wire to her next meeting with Jefferson and some that followed.

When the trial came around, she was all set to be the government's star witness. Her job, the way we understand it, was to tell her story and narrate the secret tapes she'd made, which in turn would corroborate her testimony. But then she changed her mind and said she wouldn't testify after all. The prosecutors went ahead without her. They played excerpts from her tapes to the jury and an FBI agent provided "authentication" testimony.

The indictment had said that in July 2005 she and Jefferson talked about his plan to bribe "Nigerian Official A." That was about three months after Mody started wearing a wire. But if her tapes didn't record their specific chats about Nigerian Official A, the government might have no way to tell that part of the story without her live testimony.

According to a Louisiana news site, there are problems with most of the tapes:

Jefferson could not be heard on a majority of the tapes played in the courtroom. Clanging and chatter in the restaurants drowned out most of his responses, which he also mumbled. Jurors were given headphones and transcripts of the discussions.
The government had made big deal about the FCPA count before the trial started. The FBI had given Mody $100,000 in marked bills to pass to Jefferson after he allegedly told her about his plan to bribe Nigerian Official A. The money was supposed to be a down payment to the foreign official. It was that cash -- $90,000 of it at least -- that the FBI later found in Jefferson's freezer. (So what? his lawyers said before the trial. If the cash was still in the freezer, it proved he didn't use it to bribe anyone.)

We aren't in the courtroom and haven't heard the tapes or seen any transcripts. We could have missed reports about the prosecution's FCPA-related evidence. But there's another possibility. That Lori Mody's absence blew some serious holes in the government's case, and one of those holes is where the FCPA count used to be.
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Tuesday
Jun302009

Enforcement Report For Q2 '09

During the second quarter there were, by our count, eleven Foreign Corrupt Practices Act enforcement actions. They involved four companies -- three firms resolved criminal or civil charges, or both, and one disclosed an investigation -- and 13 individuals who were either indicted, put on trial, pleaded guilty or sentenced. Here's the rundown:

Joseph T. Lukas (June 29, 2009) Guilty plea to a two-count criminal indictment.

Lukas, 60, a partner in Nexus Technologies Inc. until 2005, was indicted in September 2008 on one count of conspiracy to bribe Vietnamese public officials in violation of the Foreign Corrupt Practices Act and one substantive count of violating the FCPA. He admitted in his guilty plea that from 1999 to 2005, he and other Nexus employees agreed to pay, and knowingly paid, bribes to Vietnamese government officials in exchange for contracts with the officials' agencies. At his sentencing scheduled for April 2010, he faces up to 10 years in prison and a possible $350,000 fine.

The 2008 indictment also charged Nexus and alleged co-conspirators Nam Nguyen, Kim Nguyen and An Nguyen, all U.S. citizens, with similar violations. Their cases are still pending.

William Jefferson (June 9, 2009) The start of his federal criminal trial in Alexandria, Virginia.

It's the first time a former member of congress has been prosecuted under the Foreign Corrupt Practices Act. Jefferson, 62, faces up to 20 years in prison. He's accused of violating the FCPA by arranging bribes to African officials to win contracts for his family's companies, and with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. He lost an election last year for a 10th term in the House of Representatives from a district that includes New Orleans.

Frederic Bourke (June 1, 2009) The start of his federal criminal trial in Manhattan.

The co-founder of luxury handbag brand Dooney & Bourke is accused of investing in a deal in Azerbaijan in 1998 that he knew involved paying bribes to officials there. He faces up to 30 years in jail for conspiring to violate the FCPA, money laundering and lying to federal investigators. Bourke says he didn't know about the bribery. His co-defendant Viktor Kozeny is a fugitive in the Bahamas.

United Industrial Corporation (UIC) (May 29, 2009) Civil enforcement action resolved.

The Securities and Exchange Commission filed a settled enforcement action against UIC, an aerospace and defense systems contractor. UIC agreed to pay $337,679.42 in disgorgement and prejudgment interest. (See also Thomas Wurzel below.)

Thomas Wurzel (May 29, 2009) Civil enforcement action resolved.

The SEC filed a settled enforcement action against Thomas Wurzel, the former president of UIC's one-time subsidiary, ACL Technologies, Inc.. He agreed to pay a $35,000 civil penalty. The SEC said Wurzel authorized illegal payments to Egyptian Air Force officials in 2001 and 2002 through an agent in return for business related to a military aircraft depot in Cairo.

Wurzel and UIC were charged with violating the antibribery, books and records and internal controls provisions of the Foreign Corrupt Practices Act; Wurzel also faced aiding and abetting violations.

Novo Nordisk A/S (May 11, 2009) Criminal and civil enforcement actions resolved.

Denmark-based Novo Nordisk agreed to pay a $9 million criminal penalty and enter into a deferred prosecution agreement with the DOJ for illegal kickbacks paid to the former Iraqi government under the U.N. oil-for-food program. It also agreed to pay $3,025,066 in civil penalties and $6,005,079 in disgorgement of profits, including pre-judgment interest, to the SEC.

The DOJ charged Novo with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the FCPA. In the civil enforcement action, the SEC charged Novo with violating the FCPA's books and records and internal controls provisions.

Sun Microsystems (May 7, 2009) Investigation disclosed.

Sun said in an SEC filing that it may have violated the FCPA. It didn't reveal where the payments might have occurred or how much the bribes amounted to. But it said the potential offenses, which it has reported to U.S. and other authorities, "could possibly have a material effect on our business."

Juan Diaz and Antonio Perez (April 27, 2009) Guilty pleas to a one-count criminal information.

Diaz and Perez, both 51 of Miami, pleaded guilty to a one-count criminal information. They were charged with conspiracy to violate the FCPA by making corrupt payments to officials from Telecommunications D'Haiti. Diaz paid and concealed $1,028,851 in bribes while acting as an intermediary for three private telecommunications companies. Perez arranged bribes of $674,193 to the Haitian officials while he worked as a controller at one of the companies from March 1998 to January 2002.

Stuart Carson, Hong (Rose) Carson, Paul Cosgrove, David Edmonds, Flavio Ricotti, and Han Yong Kim (April 9, 2009) Indicted by a federal grand jury.

The six former executives of Control Components Inc., an Orange County, Calif.-based valve company, were charged with conspiracy to violate the FCPA and the Travel Act, violating the FCPA, and as to Hong (Rose) Carson, one count of obstruction. It was the biggest multi-party indictment of individuals yet under the FCPA.

Earlier this year, two other former executives from Control Components admitted paying bribes to foreign officials and have been cooperating with authorities. Richard Morlok, 55, the former finance director, and Mario Covino, 44, the company's former director of worldwide factory sales, pleaded guilty to one count of conspiracy to violate the FCPA. They're sentencing is set for July 20, 2009.

Shu Quan-Sheng (April 7, 2009) Sentenced to prison.

The Virginia-based physicist who sold controlled space-launch technology to China by bribing government officials there was sentenced to 51 months in prison. Shu, 68, a native of China and naturalized U.S. citizen, pleaded guilty in November 2008 to one count of violating the FCPA and two counts of violating the Arms Export Control Act. Shu had already forfeited $386,740 to the federal government before being sentenced to prison.

Latin Node Inc. (April 7, 2009) Criminal enforcement action resolved.

The former privately held Florida telecommunications company pleaded guilty to a one-count criminal information and agreed to pay a fine of $2 million over the next three years. It was charged with violating the FCPA's antibribery provisions by making improper payments in Honduras and Yemen.
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Click on the party names for the original posts, with links to the charging documents, plea agreements, and news and litigation releases.

View our enforcement report for Q1 '09 here.

View our 2008 enforcement index here.
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Tuesday
Jun232009

More Journalists Murdered In The Philippines

Anti-corruption journalists in the Philippines are under siege. Two were killed in the same week this month. The latest victim was newspaper commentator Antonio Castillo. He was shot on June 12 by two gunmen on a motorcycle in the central Philippines town of Uson, according to the Center for Media Freedom and Responsibility.

A few days earlier, Crispin Perez Jr., a lawyer and part-time radio commentator at a government-owned station in San Jose City in the central Philippines, was shot to death outside his home. He hosted a weekly public affairs broadcast. His criticism of deals between a local power company and suppliers had earned him enemies.

Last week, gunmen also attacked the offices of another Philippines media group in Bangued, the capital of Abra province. The target appeared to be a Catholic-run community weekly newspaper and two affiliated radio stations. No one was hurt in the drive-by shooting. A priest who runs the paper said he thought the attack was related to articles and editorials about corruption involving another local power company. A journalist working on that story was the target of an earlier drive-by shooting at her family's home last month. No one was harmed.

Five journalists in the Philippines have been murdered this year because of their work. Last year the death toll was six. And since 1986, the total is 80, with 22 of those deaths coming since 2000. The New York-based Committee to Protect Journalists (CPJ) has said the Philippines government isn't doing enough to shield journalist or to bring their attackers to justice.

On the CPJ's Impunity Index -- a list of countries where journalists are killed regularly and governments fail to solve the crimes -- the Philippines ranks as the sixth most dangerous place. The years measured are 1999 through 2008. Other countries among the most dangerous are Iraq, Sierra Leone, Somalia, Sri Lanka, Colombia, Afghanistan, Nepal, Russia and Pakistan.

* * *
From William Jefferson's Trial. Judge T.S. Ellis III is unhappy about the slow going in the federal corruption and FCPA trial of the former congressman from Louisiana.

According to the Times Picayune, "The judge expressed some impatience Monday with the pace of the proceedings, as former iGate CEO Vernon Jackson began his fourth day of testimony in the case. Jefferson, a Democrat, is facing a 16-count indictment that accuses him of seeking and sometimes receiving bribes in exchange for his help in brokering deals in West Africa. 'If this case lasts six weeks it will certainly be contrary to my intentions,' said Ellis, who admonished both sides against getting bogged down in 'minutiae."

Read all our posts about William Jefferson here.
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Thursday
Jun182009

The Friday Round Up

Reports from the BBC and the Straits Times say the Chinese Communist Party (CCP) is trying once again to get rid of secret accounts held by local officials. Known as "little coffers," the money is skimmed from public funds. The CCP directed party and government officials to disclose the accounts or face severe punishment. China often imposes the death penalty in major corruption cases.

"The illegal phenomenon has resulted in inaccuracy in accounting, disturbance in market order, losses in state income and property and corruption," the party said in a document titled "Directions on Deepening the Crackdown of Small Exchequers."

The "little coffers" have become a big problem lately as government budgets at all levels have grown, increasing opportunities to skim funds. The BBC said "audit reports have often found money that has been spent on apartments, cars and trips abroad for staff, and sometimes disappeared in outright embezzlement."

* * *
Bourke's Big Gun. Bloomberg's David Glovin leads his latest dispatch from the federal courthouse in Manhattan with this: George Mitchell, the ex-Democratic Senate majority leader and President Barack Obama’s envoy to the Middle East, is set to testify [Friday] as part of Connecticut entrepreneur Frederic Bourke’s defense to charges that he helped bribe government leaders in Azerbaijan.

Glovin says Mitchell’s name has come up throughout the trial. He writes, "On the recommendation of Bourke, Mitchell put up $200,000 and became a director of a U.S. company formed by Kozeny. Mitchell, a Maine Democrat who left Congress in 1995, was friends with Bourke, who has a home in Maine."

Read David Glovin's reports on the trial for Bloomberg here.

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

* * *
Jefferson's #%@&!. The BLT's Jordan Weissmann filed this report yesterday from William Jefferson's trial in Alexandria, Virginia:

Jurors listened to a profanity-laced phone call in which Jefferson said he and iGate CEO Vernon Jackson would "end up in the goddamned pokey" if they angered one of the company's chief investors. During the call, Jackson had suggested replacing Virginia businesswoman Lori Mody, with whom he had a strained relationship. Jackson said he had found a new backer willing to step into her place. Jefferson called the idea "crazy," adding, "Lori's going to be filing suits."
Read all our posts about William Jefferson here.

* * *
We never get tired of spending time with E.B. White. He's so cheerful, without being chirpy and irritating. Like this passage from his 1971 essay, "The Winter of the Great Snows:"

"For a while, the barnyard fence was buried under a magnificent drift. This delighted the geese, who promptly walked to freedom on their orange-colored snowshoes. They then took off into the air, snowshoes and all, freedom having gone to their heads, and visited the trout pond, where they spent an enjoyable morning on the ice. On several occasions this winter, we had to shovel a path for the geese, to make it possible for them to get from their pen in the barn to their favorite loitering spot in the barn cellar. Imagine a man's shoveling a path for a goose! So the goose can loiter!"

From the Essays of E.B. White.
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Wednesday
Jun172009

Witnesses Hit Bourke And Jefferson

From Frederic Bourke's Trial. Outstanding coverage on the testimony this week of Hans Bodmer, Viktor Kozeny's Swiss lawyer, from the Courthouse News Service here and Bloomberg's David Glovin here.

From Glovin's account:

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.

And from the Courthouse News Service, which described Bodmer as "the gaunt-faced but handsome witness,"
After receiving permission from Kozeny to reveal the details, Bodmer said he took Bourke on a 15- to 20-minute walk outside the hotel [in Baku, Azerbaijan], fearing that the lobby and the rooms may have been bugged. Bodmer testified that at the time he suspected that Bourke already knew about the scheme.
Frederic Bourke is on trial in Manhattan federal court on charges that he invested $8 million with Viktor Kozeny, knowing about the plan to bribe Azeri leaders in a bid to buy the state oil company. Bourke, 63, denies that he knew about Kozeny's bribery, and says he is among the victims who lost a total of $350 million in the scheme.

Bourke is co-founder of luxury handbag brand Dooney & Bourke. He faces up to 30 years in prison if convicted on all counts, including conspiring to violate the Foreign Corrupt Practices Act, money laundering, and lying to federal investigators. Kozeny, a Czech national who was also charged with violating the FCPA, is a fugitive living in the Bahamas.

Read David Glovin's reports on the trial for Bloomberg here.

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

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From William Jefferson's Trial. The AP's Matthew Barakat reports on the testimony of the government's first witness here. Vernon Jackson, a Kentucky businessman who already pleaded guilty in the case and was sentenced to 87 months in prison, said he paid hundreds of thousands of dollars in "consulting fees" to Jefferson's wife that were nothing but thinly veiled bribes. Barakat writes,

Jackson is also one of the trial's most important witnesses. Out of numerous bribery schemes that prosecutors allege Jefferson orchestrated, the one involving Jackson was the most advanced and involved the largest payments. . . . He stands to receive a reduction in his sentence in exchange for his testimony against Jefferson.
Jefferson, 62, served nine terms in congress from Louisiana before losing his seat last year. He is charged with soliciting bribes, racketeering, money laundering and violating the Foreign Corrupt Practices Act. Testimony in his trial in federal court in Alexandria, Virginia started this week. He faces up to 20 years in jail.

Jackson sought business help from Jefferson to land army contracts for his company, iGate. Although the relationship was legitimate at first, Jackson said, Jefferson later told Jackson to hire his wife, Andrea, as a consultant. Jackson said he agreed to pay her $90,000 a year in consulting fees, plus a percentage of profits, but she didn't do any work. "I was paying [Jefferson] to use his office on behalf of iGate," Jackson said.

Read all our posts about William Jefferson here.