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Harry Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

FCPA Blog Daily News

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Monday
Oct032011

Enforcement Report For Q-3 '11

During the calendar quarter just ended, there were three corporate enforcement actions and two individual convictions. A defendant received one of the FCPA's longest jail sentences, the DOJ released three new FCPA-related indictments, and prosecutors dropped the appeal of a short FCPA prison term.

But the biggest news was the mistrial in the first Africa sting case. It's not an outright win for the defendants -- the government said it will retry them. Meanwhile, the trial of the second group of sting defendants started during the quarter.

Here's a complete rundown for Q-3:

DOJ / SEC Enforcement Resolutions

Armor Holdings Inc. (July 13) a military and law enforcement equipment company formerly listed on the NYSE and now owned by BAE Systems agreed to pay $16 million to resolve FCPA violations arising from bribes to secure U.N. contracts and covering up the payments. Armor will pay the DOJ a criminal penalty of $10.3 million and will disgorge $5.7 million to the SEC. Former Armor executive Jonathan Spiller was indicted with the 22 Africa sting defendants. He pleaded guilty earlier this year to conspiracy to violate the FCPA. He hasn't been sentenced.

Diageo plc (July 27) agreed to pay the SEC $16.4 million to resolve FCPA offenses that stretched over six years and involved bribes to foreign officials in India, Thailand, and South Korea. The London-based maker of many top liquor brands -- including Johnnie Walker and Windsor Scotch whiskeys -- paid $2.7 million in bribes through subsidiaries for sales and tax benefits.

Bridgestone Corporation (September 15) agreed to plead guilty and pay a $28 million criminal fine for its role in conspiracies to rig bids and make corrupt payments to foreign government officials in Latin America. The Tokyo-based maker of marine hose and other industrial products was charged with conspiring to violate the Sherman Act and the Foreign Corrupt Practices Act. 

Convicted

Joel Esquenazi (August 4), 52, of Miami, Florida was convicted in the Haiti Telco case of 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. Esquenazi was the president of Miami-based Terra Telecommunications Corp. Sentencing is pending.

Carlos Rodriguez (August 4), 55, of Davie, Florida, was tried and convicted on the same counts with Joel Esquenazi in the Haiti Telco case (see above). Rodriguez was the executive vice president of Terra Telecommunications Corp. Sentencing is pending.

Mistrial Declared

Pankesh Patel, Andrew Bigelow, John Benson Weir, and Lee Allen Tolleson (July 7) The judge in the first Africa sting trial declared a mistrial after the jury deliberated five days without reaching a verdict. The defendants were charged with conspiracy to violate the FCPA, violating the FCPA, conspiracy to commit money laundering, and aiding and abetting. They also faced a forfeiture count. The government said it will retry them.

Indicted

Cinergy Telecommunications Inc. (July 13), a privately-held telecommunications company incorporated in Florida, was 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, in connection with alleged bribes to Haitian government officials.

Washington Vasconez Cruz (July 13), 63, of Miami, the president of Cinergy, was 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
(July 13), 60, of Pembroke Pines, Florida and Brazil, a former director of Cinergy, was 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.

Sentenced

Jorge Granados (September 7), 55, former CEO of Florida-based telecommunications company Latin Node Inc., was sentenced in federal court in Miami to 46 months in prison for bribing government officials in Honduras. He pleaded guilty in May to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act by paying more than $500,000 in bribes.

Appeal Dropped

Gerald and Patricia Green (August 24) The government dropped its appeal of the six-month prison sentences already served by the Hollywood producer and his wife. Gerald Green, 79, and his wife Patricia, 56, were released from federal custody in May. An LA jury convicted them in 2009 of FCPA and money laundering. The Greens paid $1.8 million in bribes to Juthamas Siriwan, then-governor of the Tourism Authority of Thailand, in exchange for $13.5 million in contracts to produce the Bangkok film festival.

Trial Commenced

Patrick Caldwell, John Mushriqui, Jeana Mushriqui, Stephen Giordanella, John Godsey, and Marc Morales (September 28), the second batch of Africa sting defendants to go on trial face one count of conspiracy to violate the FCPA. Except for Giordanella, they also face multiple substantive FCPA counts. The government has included a forfeiture count against all of them.

_______________

Our Enforcement Report for Q-1 '11 is here and for Q-2 '11 is here.

Our 2010 FCPA Enforcement Index is here, the 2009 Index can be found here, and our 2008 Index here.

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