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FCPA Blog Daily News

Entries in Clayton Lewis (21)


Enforcement Report for Q2 '13

It was blockbuster quarter for FCPA enforcement, and April was one of the busiest months on record.

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Lewis given time served for Kozeny conspiracy

The former hedge fund executive who pleaded guilty nine years ago to conspiracy to violate the FCPA was sentenced Wednesday to time he aleady served in jail.

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Time served for Bodmer

The Swiss lawyer who pleaded guilty in 2004 to helping move money used to bribe officials in Viktor Kozeny's Azeri privatization scheme was sentenced in New York on Wednesday to the time he already served in jail.

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Judge delays Lewis sentencing to April 

Clayton Lewis, the hedge fund partner who invested and lost $126 million in Viktor Kozeny's Azeri privatization scheme, won't be sentenced until at least April, according to an order issued this month by the judge hearing his case.

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Lewis Sentencing Moves Forward

A hedge fund partner who pleaded guilty to conspiracy to violate the FCPA in connection with Viktor Kozeny's Azeri privatization scheme is now scheduled to be sentenced next year on February 27.

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Kozeny Wins In Privy Council

The U.K. Privy Council ruled yesterday that Viktor Kozeny, the accused mastermind in a huge 1990's bribery scheme in Azerbaijan, can't be extradited from the Bahamas to the United States to face FCPA charges.

Kozeny, 48, a Czech citizen who fled to the Bahamas in 1999 and hasn't left since then, told Bloomberg's David Glovin: “We have prevailed on all points.”

He was arrested in the Bahamas at the request of the U.S. government in October 2005 and held in prison until granted bail in April 2007.

In 2010, he won an appellate decision to block his extradition. The Bahamas government appealed that decision to the London-based Privy Council.

The Privy Council's unanimous ruling said Kozeny's alleged bribery didn't break any laws in the Bahamas. Therefore the courts there had no jurisdiction to order his extradition.

For some British Commonwealth members including the Bahamas, the Privy Council is the final court of appeal.

Kozeny was indicted by a federal grand jury in Manhattan 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 2009 of conspiracy to violate the FCPA and lying to FBI agents. Bourke was sentenced to a year and a day in prison.

Bourke lost his first appeal to overturn his conviction and separately was denied a new trial. He asked a fuller panel of the appeals court to rehear his argument. He's out on bail while the appeal is pending.

Two potential witnesses against Kozeny who pleaded guilty in the case were waiting for his extradition.

Clayton Lewis was a partner in Omega Advisors, Inc., a hedge fund that invested and lost about $126 million in Kozeny’s Azeri privatization scheme. Lewis, prosecutors said, knew Kozeny planned to pay bribes but went ahead with the investment anyway. He was arrested in 2003 and two years later pleaded guilty to conspiracy to violate the FCPA.

Hans Bodmer -- a Swiss lawyer who worked for Kozeny and was another potential witness against him -- pleaded guilty in October 2004 to conspiracy to launder money.

The DOJ repeatedly asked the court to delay their sentencing until Kozeny could be brought to trial in federal court in New York City. Bodmer and Lewis would have earned sentencing credit for their testimony. Both appeared as cooperating witnesses for the prosecution at Frederic Bourke's trial.

Lewis faces up to five years in prison. Bodmer could be jailed for up to ten years. The DOJ allowed him to live in Switzerland after his guilty plea and cooperation deal.

Kozeny still faces other charges and could be arrested if he leaves the Bahamas.

Bloomberg's Glovin said: 'New York State prosecutors separately have accused Kozeny of stealing hundreds of millions of dollars from his U.S. investors in the Azerbaijan deal. Czech prosecutors have presented evidence to a court trying Kozeny in absentia on charges of embezzling $1.1 billion from mutual funds he established in the Czech Republic in the early 1990s.'

Kozeny told Glovin 'he will leave it to his lawyers to seek resolution of the charges.'


Lewis Sentencing: Not This Year

Clayton Lewis -- who pleaded guilty in 2005 to conspiracy to violate the FCPA and launder money -- will wait until at least next February to be sentenced.

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DOJ Looks For Kozeny Decision 'This Year'

The DOJ said the Bahamas government is hopeful that the Privy Council will hear and decide Viktor Kozeny's extradition case this year.

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Bodmer, Like Lewis, Waits For Sentencing

The Swiss lawyer who helped FCPA fugitive Viktor Kozeny move money and provided key testimony against Frederic Bourke is still waiting to be sentenced more than six years after pleading guilty.

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Waiting For Viktor

More than five years after pleading guilty, Clayton Lewis is still waiting to be sentenced. And that's the way the government wants it.

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Sentencing Watch List

Let's update the list of individuals waiting to be sentenced for violating or conspiring to violate the Foreign Corrupt Practices Act. Since October, Frederic Bourke and William Jefferson have been sentenced and come off the list. Charles Jumet, Paul Novak, and Fernando Maya Basurto have entered guilty pleas are are added to it. Juan Diaz was to be sentenced on November 13 but the court reset his date. A reader also let us know that Si Chan Wooh, the former head of Schnitzer Steel's international subsidiary, who pleaded guilty in June 2007 to conspiracy to violate the FCPA, is scheduled to be sentenced next year in federal court in Oregon. So the list now stands at 18. 

Here they are:

Fernando Maya Basurto -- no date given.

Jim Bob Brown -- January 28, 2010

Joshua Cantor -- no date given.

Mario Covino -- January 25, 2010

Juan Diaz -- January 29, 2010

Thomas Farrell -- no date given.

Gerald and Patricia Green -- December 17, 2009

Charles Paul Edward Jumet -- February 12, 2010

Clayton Lewis -- no date given.

Joseph T. Lukas -- April 6, 2010

Richard Morlok -- January 25, 2010

Paul G. Novak -- February 19, 2010

Antonio Perez -- October 6, 2009. [No sentencing reported and no resetting of the sentencing date shown in the court docket.]

Si Chan Wooh -- April 26, 2010

 Leo Winston Smith -- December 18, 2009

Albert "Jack" Stanley -- February 24, 2010

Jason Edward Steph -- January 28, 2010

Let us know if we're still missing anyone or if other sentencing dates have changed.

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Words we like.  From Abraham Lincoln, October 1858:

It is the eternal struggle between these two principles — right and wrong — throughout the world. They are the two principles that have stood face to face from the beginning of time; and will ever continue to struggle. The one is the common right of humanity, and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, "You toil and work and earn bread, and I'll eat it." No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.


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).