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No Hollywood Ending

An LA jury needed not days but hours to convict the husband-and-wife movie producers of violating the Foreign Corrupt Practices Act. They were also found guilty on related charges, including conspiracy, money laundering, and tax cheating. Now they're facing what amounts to life in prison. Gerald Green is 77 and Patricia is 52, so ten or more years behind bars, which is likely, could mean game over.

The tragic trial result shouldn't have surprised anyone. There hasn't been an acquittal in an FCPA case since 1991. Not one. That's why comments from Patricia Green's lawyer are hard to understand. Marilyn Bednarski told the LA Times here, "To me it?s a case of circumstantial evidence . . . the people of Thailand were not victimized in any way" because the Greens provided "top notch services." Really?

Gerald Green's lawyer, Jerome Mooney, was more in touch. The DOJ used the case, he said, partly to send a warning to the entertainment industry: clean up the way you deal with "community relations" in foreign countries, or else. "We understand the government taking a shot across the bow of Hollywood," Mooney said. "We just wish the shell hadn't landed on our clients' boat."

From the convictions this year of the Greens, Frederic Bourke and William Jefferson, and those from prior years of David Kay, Douglas Murphy and David Mead, and all the prosecutions and guilty pleas in between, here are some things that every FCPA defendant should keep in mind before the trial starts:

Juries hate graft. Every FCPA case involves lurid stories about bribery abroad. About sophisticated and often wealthy people trying to take shortcuts. Wheeling and dealing in exotic foreign cities. Flashing cash and pulling strings. Juries lap it up. As we've said before, even if the government's evidence isn't rock solid on all the elements of an FCPA offense, the jury will still get the picture that people stepped over the line of acceptable business behavior. And they'll convict.

There are clouds of witnesses. Forget lone wolves and rogue employees. Foreign bribery generally needs a team effort. When the government gets a whiff of the plot, it hauls in everyone -- from those who might have had a hand in it to anyone who could have heard talk at the water cooler. If it's early in the investigation, the bit players can be persuaded to turn, to become the government's confidential witnesses. Supporting actors are given immunity or promised lighter sentences. So they sing about their bosses, colleagues, friends. Especially if they blame the aforementioned for dragging them into the criminal activity.

Evidence is everywhere. Bribes have to be planned, funded, paid, and covered up. There's always someone on the receiving end, so the complications multiply. It all takes a lot of work and usually leaves behind a trail that's easy to find and follow. Phony contracts and invoices, swirling money with multiple bank transfers, fake agents and distributors, shell companies, two sets of books, and so on.

Show and tell. These days the government rarely shows up for trial without tapes of the accused discussing the bribes or actually handing over some cash. Wearing a wire used to mean strapping on to your body an awkward piece of electronic gear the size of a croissant. Not any more. A cell phone laying on the table can be an open mic. A pen in the breast pocket can capture or broadcast sound and pictures. Scary stuff. And once the feds have tapes, they don't even need the confidential witnesses at the trial.

Related charges a-plenty. In foreign bribery cases, the government might start with FCPA charges. But remember: bribes to foreign officials need to be planned, funded, paid, and covered up. So there's usually a conspiracy, money laundering, traveling to commit the offense, fraud and obstruction in the cover-up, and tax-cheating to boot. What a mess. The government can throw a lot of mud at the wall. If some doesn't stick, so what? Prosecutors can drop some charges later and plow ahead with the rest.

Bourke was convicted of conspiracy to violate the FCPA and a Travel Act offense, but not the FCPA itself. William Jefferson was acquitted of a substantive FCPA charge but found guilty of conspiracy to violate the FCPA, soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes. Gerald Green beat the obstruction rap -- the government ended up dropping the charge -- but he and his wife were convicted of conspiracy to violate the FCPA, eight violations of the FCPA and seven counts of money laundering. Mrs. Green was also found guilty of two counts of falsely subscribing a U.S. tax return.
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We're not saying everyone accused of violating the FCPA is guilty. And certainly those accused and awaiting trial are presumed innocent unless and until found guilty in a court of law. But with no acquittals in an FCPA trial since 1991, defendants and their counsel should have their eyes wide open about their chances in court.

View prior posts about the Greens here.
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Full post as published by The FCPA Blog on September 14, 2009 (boomark / email).