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The Tally, Part 2

Following yesterday's post, several readers suggested that we mention any other FCPA-related cases, appeals, sentencings and enforcement actions during the past year involving individuals. It's a good idea, and our thanks go out to Marc and our other correspondents.

Our post Kozeny's Co-Defendant Wins Appeal (September 1, 2008) discusses Victor Kozeny, Frederic Bourke and David Pinkerton. They were indicted in May 2005 under the FCPA over an alleged plan to bribe officials from Azerbaijan. In June 2007 the trial court dismissed the charges, saying the government failed to indict within the FCPA's five-year statute of limitations. In October 2007, the Bahamas Supreme Court refused to order Kozeny's return to the U.S. to face trial. Pinkerton was dropped from the U.S. case in July 2008 after the government withdrew all charges against him. The Second Circuit then affirmed Bourke's dismissal because of the statute of limitations.

On May 15, 2008, Jason Edward Steph consented to entry of a permanent injunction with the SEC with a possible civil penalty to be determined. Gerald Jansen, another former Willbros executive in Nigeria, received a permanent injunction and a civil fine of $30,000, while Lloyd Biggers, a former Willbros employee in Nigeria, received a permanent injunction. Our post Willbros Resolves FCPA Offenses (May 15, 2008) said, "Also named in the SEC's complaint were Gerald Jansen, a former administrative supervisor in Nigeria; Lloyd Biggers, a former employee in Nigeria; and Carlos Galvez, a former accounting employee in Bolivia. The allegations included a scheme to pay $300,000 to officials of an Ecuadorean state-owned oil and gas company and to avoid paying taxes in Bolivia."

On January 10, 2008, the United States Court of Appeals for the Fifth Circuit denied a petition for rehearing en banc from David Kay and Douglas Murphy. The former executives of American Rice, Inc., were indicted under the FCPA in 2002 for bribing Haitian officials. The U.S. District Court in Houston dismissed the indictments, finding that the FCPA did not apply to their conduct -- i.e., paying bribes to reduce their company's taxes. In 2004, the Fifth Circuit held that the bribes alleged in the indictment could fall within the scope of the FCPA and remanded. At trial, Kay and Murphy were convicted of violating the FCPA. Kay was sentenced to 37 months in prison and Murphy to 63 months. They appealed, and in October 2007 the Fifth Circuit affirmed their convictions. They then filed a petition for rehearing en banc, which the Fifth Circuit denied. See our post U.S. v. Kay: Once More To The Courts (February 28, 2008).

On April 9, 2008, Kay and Murphy filed a petition for cert with the U.S. Supreme Court (available at scotusblog.com here). They're arguing among other things that the text, structure, and legislative history of the FCPA are all ambiguous with respect to the criminalization of the type of payments involved in the case. Therefore, they should have the benefit of the rule of lenity -- i.e., that any ambiguity in the FCPA should be construed against the government and in favor of the accused.

On October 1, 2007, Oscar Wyatt Jr., 83, pleaded guilty to one count of conspiracy to commit wire fraud in connection with the U.N. oil-for-food program. The U.S. Government accused him of paying millions in illegal surcharges directly to Iraqi officials in return for oil allocations from 2000 to 2002. He faces 18 to 24 months in prison under a plea agreement and will forfeit $11 million. He founded and ran Coastal Corporation, which he sold to El Paso Corporation in 2001. Though he wasn't charged under the FCPA, in February 2007, El Paso settled FCPA allegations related to illegal surcharges it paid to Iraqi officials under the oil-for-food program. See our post Oscar Wyatt, Founder Of Coastal Corporation, Pleads Guilty To Iraq Bribes (October 2, 2007).

On September 28, 2007, Steven Head, the former president of Titan Corporation?s Africa business, was sentenced to six months? in prison, three years? supervised release, and a fine of $5,000. He pleaded guilty in June 2006 to one count of falsifying a financial document. He was originally charged with paying $3.5 million in bribes to foreign officials in Benin. Titan pleaded guilty in March 2005 to violating the FCPA and aiding and abetting the filing of a false tax return.

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Full post as published by The FCPA Blog on September 18, 2008 (boomark / email).