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Bourke Gets A Year In Prison

Frederic Bourke, the American entrepreneur who led a charmed life and whose prosecution brought new prominence to the Foreign Corrupt Practices Act, has been sentenced to a year and a day in prison and fined $1 million for investing in a bribe-tainted deal in Azerbaijan and then lying to FBI agents about it.

The co-founder of luxury handbag-maker Dooney & Bourke was convicted in July in a Manhattan federal court of conspiracy to violate the FCPA and making false statements in a federal investigation. He was acquitted of money-laundering charges. Bourke could have been jailed for up to ten years following his conviction.

The government indicted Bourke, 63, in 2005, along with Czech-born fugitive Viktor Kozeny, for bribing government officials in Azerbaijan in a failed attempt to take over the state oil company known as Socar. Kozeny, 46, has been a fugitive for about a decade. From the Bahamas, he's been fighting extradition to the United States. He's also accused in New York of stealing $180 million from his investors, including Bourke, and he's wanted by the Czech Republic for allegedly looting a national pension fund.

Bourke claimed he was a victim of Kozeny's fraud and didn't know about his scheme to bribe Azeri officials.

As reported by Bloomberg's David Glovin -- whose in-depth coverage of Bourke's prosecution and trial brought new international attention to the FCPA -- witnesses described "plane flights into Azerbaijan with millions of dollars stuffed into suitcases, of shakedowns in government offices, and of lavish spending by a flamboyant Kozeny who saw himself as a new oligarch. Kozeny told his investors they might control half of Azerbaijan?s economy if they captured Socar."

Bourke's prosecutor, assistant U.S. attorney Harry Chernoff, said, ?This prosecution has served notice to potential violators of the FCPA, including passive investors, as Bourke inaccurately styles himself. They will not evade prosecution just because they have left most of the dirty work to foreigners.?

But Judge Shira Scheindlin summed it up differently. ?After years of supervising this case," she said, "it?s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both."

Bourke's lawyers plan to appeal his conviction.

A copy of the 2005 indictment against Kozeny and Bourke can be downloaded in two parts here and here.

Read prior posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.
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Full post as published by The FCPA Blog on November 10, 2009 (boomark / email).