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FCPA Blog Daily News

Entries in David Edmonds (14)


DOJ recommends no jail for three CCI execs

In Marc Alain Bohn's FCPA Docket yesterday, there was important news about three individuals facing sentencing in the Control Components Inc. case.

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CCI's Edmonds sentenced to four months in prison

David Edmonds, a former vice president of California-based Control Components Inc., was jailed for four months at his sentencing Monday for violating the FCPA, followed by four months of home confinement.

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DOJ recommends leniency for China-born defendant

In a court filing late last week, the DOJ said Hong Rose Carson, the former sales director for Control Components Inc. in China and Taiwan, should be sentenced to just six months of home confinement and fined $20,000.

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Enforcement Report For Q2 '12

Here's what happened during the second quarter of 2012.

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CCI's Edmonds Pleads Guilty

David Edmonds is the seventh former CCI executive to plead guilty to FCPA charges.

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Cosgrove In 15-Month Plea Deal  

The former head of worldwide sales for Control Components Inc., Paul Cosgrove, pleaded guilty on Tuesday to violating the Foreign Corrupt Practices Act.

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WSJ: CCI Exec To Change Plea

Chris Matthews of the Wall Street Journal reported today that Paul Cosgrove will appear in federal court Tuesday and plead guilty to charges stemming from a global bribery scheme at Control Components Inc.

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U.S. v. Carson and 'Foreign Officials'

In U.S. v. Carson, the defendants submitted a sixty-one page argument on the issue of who's a 'foreign official,' along with a declaration by Mike Koehler about the FCPA's legislative history that stretched to one hundred fifty pages.

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'Foreign Official' Challenge Fails Again

Judge James V. Selna yesterday denied the Carson defendants motion to dismiss ten FCPA-related counts in the indictment against them based on the definition of "foreign official" in the Foreign Corrupt Practices Act.

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Italian Citizen Pleads Guilty

Former fugitive Flavio Ricotti pleaded guilty yesterday in federal court in Santa Ana, California to a single count of conspiracy to violate the Foreign Corrupt Practices Act and the Travel Act.

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You're Grounded

An Italian citizen extradited in July last year to face FCPA charges was released from jail two weeks after his arraignment in California. But he can't leave home.

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Rose Carson's Big Flush

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?