Archive for the ‘Carlos Rodriguez’ Category

Haiti Teleco “Foreign Official” Says He Was Not A “Foreign Official” – Files Appeal On This And Other Issues

Friday, February 8th, 2013

Some background is necessary to place in context an interesting development that is likewise relevant to the pending Eleventh Circuit “foreign official” appeal by Joel Esquenazi and Carlos Rodriguez (see here for the prior post linking to the full briefing in the case).

In terms of the number of individual criminal defendants (9), the Haiti Teleco enforcement actions are the largest in FCPA history (minus the manufactured Africa Sting case).  The FCPA charges in the enforcement actions were based on the theory that Haiti Teleco was a “instrumentality ” of the Haitian government, such that Haiti Teleco employees were “foreign officials” under the FCPA.  Seven of the defendants pleaded guilty and two of the defendants, Esquenazi and Rodriguez, exercised their constitutional right to a jury trial and were found guilty of FCPA and related charges.  As noted above, both defendants have appealed their convictions to the Eleventh Circuit.  [Disclosure - I am providing pro bono expert services to defendants' counsel, including my former law firm Foley & Lardner, relevant to the "foreign official" issue].

In addition to the FCPA (and related) charges brought against the above category of defendants, the DOJ also criminally charged three “foreign officials” in connection with the matter (see this prior post titled “Haiti Teleco Roundup” for additional details).  Two of the individuals pleaded guilty to non-FCPA offenses, and one “foreign official,” Jean Rene Duperval, was found guilty by a jury on various money laundering charges.

In short, 12 individuals were criminally charged, pleaded guilty, and/or were found guilty based, in whole or in part, on the theory that Haiti Teleco was an “instrumentality” of the Haitian government.

This prosecution theory of course is a main focus of the Esquenazi and Rodriguez appeal in the Eleventh Circuit.  As noted in this prior post, shortly after their convictions and before their current appeal, a stunning development occurred in the case as the Haitian Prime Minister (Jean Max Bellerive) authored a declaration, on behalf of the Haitian Ministry of Justice, concerning the “Legal Status of Teleco.”  (See here for the declaration).   The declaration asserted, among other things, that “Teleco has never been and until now is not a state enterprise.”  The declaration was dated ten days before the jury reached its verdict in the Esquenazi and Rodriguez trial and subsequent filings in the cases suggest that the origins of the declaration was in response to a letter sent by Paul Calli (Carlton Fields - then an attorney for Patrick Joseph (one of the “foreign officials” who pleaded guilty in the case)) inquiring about the status of Haiti Teleco and whether it was a private company or a government owned company.

In a further stunning development, and as noted in this prior post, after the Bellerive declaration surfaced, the DOJ contacted the Prime Minister and he filed a revised declaration (here), in which he backtracked from many of his prior declaration statements, and stated that he did not know his original declaration  “was going to be used in criminal legal proceedings in the United States or that it was going to be used in support of the argument that [...] Teleco was not part of the Public Administration of Haiti.”

The trial court judge in the Esquenazi and Rodriguez case denied defendants’ request for a new trial and this denial is among the issues on appeal in the Eleventh Circuit.

And now for the interesting and notable recent development alluded to in this Main Justice story.

Duperval, the key “foreign official” at the center of the Haiti Teleco prosecutions, filed an appeal (here) in the Eleventh Circuit earlier this week challenging his convictions.  One issue on appeal is stated as follows.  “The evidence was insufficient to prove beyond a reasonable doubt that Haiti Teleco was a government instrumentality and that Jean Rene Duperval was a foreign official as required to prove that a violation of the Foreign Corrupt Practices Act generated proceeds of a specified unlawful activity – a necessary predicate for the convictions on the money laundering conspiracy and substantive money laundering charges.”

Separately, Duperval’s brief discusses the Bellerive declarations in connection with his due process challenges.  Among other things, the brief notes that the DOJ’s “explanation and Bellerive’s statements in his second declaration, are nothing short of disingenuous, border on the nonsensical, and are expressly contradicted by the previous correspondence, which established that Bellerive signed the first declaration in response to an inquiry from an attorney representing Patrick Joseph …”.    The brief then asserts that “but for the government’s unjustified interference with Prime Minister Bellerive, Mr. Duperval could have availed himself of a favorable witness to demonstrate quite simply that Teleco was not a government instrumentality and he was not a foreign official.”

Duperval’s brief also challenges the sufficiency of the trial court evidence regarding “foreign official” and whether Duperval was a “foreign official as required to prove a charge of money laundering related to the proceeds of a violation of the FCPA.”  The substantive arguments on this issue largely mirror previous defense arguments in the Lindsey Manufacturing and Carson “foreign official” challenges as well as Esquenazi’s and Rodriguez’s arguments on appeal.  Duperval’s argument includes discussion and several citations to my “foreign official” declaration (see here).

Another interesting aspect of Duperval’s appeal is his challenge that the “trial court erred in not charging the jury in accordance with Duperval’s proffered theory of defense instruction.”  Specifically, Duperval argues that the trial court denied Duperval’s FCPA facilitation payments exception instruction.  The brief asserts that the “language in the instruction was extracted verbatim” from the FCPA and that there was “ample evidence in the record to support the giving of the instruction.”

In this regard, it is interesting to note that in Judge Keith Ellison’s (S.D. Tex.) December 2012 Jackson / Ruehlen decision (see here for the prior post regarding the SEC enforcement action) he concluded, in what is believed to be an issue of first impression, that the SEC must bear the burden of negating the facilitation payments exception.

Friday Roundup

Friday, October 5th, 2012

Briefing complete,  an isn’t it ironic follow-up, and going for the gold.  It’s all here in the Friday roundup.

Briefing Complete In Historic “Foreign Official” Challenge

This previous post highlighted the appeal of Carlos Rodriguez and Joel Esquenazi to the 11th Circuit on a host of issues, including whether the trial court erred as a matter of law in its jury instruction regarding what constitutes an “instrumentality” of a foreign government – and thus who are “foreign officials” under the FCPA.  As noted in the post, this is a historic appeal, the first time in the FCPA’s history that “foreign official” will be squarely before an appellate court.  This previous post highlighted the DOJ’s response brief.

Yesterday lawyers for Rodriguez and Esquenazi filed reply briefs here and here.

Among other things, Rodriguez’s brief argues as follows.  “This Court should reject the Government’s assertion that the OECD Anti-Bribery Convention requires that this Court affirm the jury instruction incorporating the government function interpretation.  [...] Before the United States adopted the OECD 1997 Convention on Combating Bribery in 1998, the United States had no obligation to prohibit foreign bribery.  Thus, the law of nations sheds no light on what Congress intended when it adopted the relevant definition of foreign official in 1977.   In 1998, when Congress amended the FCPA in light of the OECD’s Convention, Congress did not add “public enterprise” to the definition of foreign official.  This Court should not apply terms from the Convention that Congress chose not to adopt into the FCPA.”

Among other things, Esquenazi’s brief argues that the “government’s untethered definition of instrumentality cannot stand,” “the government engages in a selective and misleading reading of the FCPA’s legislative history,” and that the “government’s vehemence proves too much.”  As to the later point, the brief states as follows.  “The Government spends a significant part of its brief arguing that its broad (and fatally flawed) definition of “instrumentality” is crystal clear.  First, few statutory terms have received such extensive governmental resuscitation efforts. Second, there is a difficult-to-ignore, growing consensus among observers (including two former United States Attorneys General) that the Government is misreading “instrumentality.”

Regarding my “foreign official” declaration (here) that the DOJ is seeking to exclude from the record, the brief states as follows.  “The Government protests Esquenazi’s citation to Professor Michael J. Koehler’s declaration addressing the legislative history of the FCPA, which was filed in United States v. Carson.  Aside from the analysis contained in the Koehler declaration, the substance of the declaration is the legislative history of the FCPA. The Court can surely take notice of legislative history, and evaluate the utility and accuracy of Professor Koehler’s declaration for itself. But the Government’s claim that the declaration of a professor filed in another criminal proceeding and under penalty of perjury is somehow of lower status than a law review article reviewed by law students strains credulity.”

David Simon (Foley & Lardner – here) leads the appellate team for Rodriguez.  Markus Funk (Perkins Coie – here) leads the appellate team for Esquenazi.

Isn’t It Ironic Follow-Up

In this prior post, I asked isn’t it ironic, don’t you think, that while the U.S. is bringing enforcement actions against companies for conduct that includes providing $600 bottles of wine, Cartier watches, cameras, kitchen appliances, business suits, and executive education classes to individuals deemed “foreign officials,” the U.S. has legitimized corporate influence over government in this country?   I noted that this uncomfortable truth will be clear on display as the elections unfold.

Sure enough, earlier this week, the Wall Street Journal had a page one article “Movie Mogul’s Starring Role in Raising Funds for Obama” (here) detailing Jeffrey Katzenberg’s extensive political contributions and close ties to President Obama.  Hosting a dinner that raised $15 million for President Obama.  Check.  Writing a $2 million check to jump start a super PAC supporting President Obama.  Check.  A planned $40,000 per person dinner with President Obama.  Check.

The WSJ article notes that “Mr. Katzenberg’s fundraising prowess has earned him access and a role as the informal liaison between Hollywood and the White House, as the industry continues seeking government help against online piracy” among other issues.

If President Obama was a foreign official and expensive wine was served at the dinner, such allegations might very well find their way into an FCPA enforcement action … and have already.  If the super PAC was a charitable donation and President Obama a foreign official, such allegations might very well find their way into an FCPA enforcement action … and have already.

Isn’t it ironic don’t you think?

But the irony does not stop there.

As noted in the article, among the access that Katzenberg had was attending a State Department lunch during the recent U.S. visit of China’s presumed future leader Xi Jinping.  The lunch occurred in the context of Hollywood’s eagerness to tap into the lucrative Chinese market.

As noted in this previous post, it was widely reported this past spring that the SEC has sent letters of inquiry to several Hollywood studios, including Katzenberg’s DreamWorks Animation, seeking information about potential inappropriate payments and how the companies interact with certain government officials in China.

Isn’t it ironic don’t you think?

Going for the Gold

It’s interesting to witness the lengths FCPA Inc. will go to market its compliance services.  After dozens of London Olympic, Bribery Act, FCPA, are you prepared type pieces, up next is the Winter Olympics in Sochi, Russia, and with that a marketing opportunity.   This recent law firm piece states as follows.  “With the conclusion of the 2012 Summer Olympics in London, the world’s eyes will soon turn to Sochi, the Black Sea resort city in Russia, which will host the 2014 Winter Olympics. In addition to serving as the backdrop for the usual feats of athletic prowess and national pride, the Sochi games may also be fertile ground for prosecutions under the United States’ Foreign Corrupt Practices Act (FCPA). The U.S. government’s actions in this setting will serve as a signal to any company doing business abroad that it must be proactive in ensuring compliance with the FCPA.”

As Above the Law recently observed here, the FCPA “freak-out session is entertaining to watch.”

*****

A good weekend to all.

DOJ Files Response Brief In Historic 11th Circuit “Foreign Official” Appeal

Tuesday, August 21st, 2012

This previous post detailed the appeal of Carlos Rodriguez and Joel Esquenazi to the 11th Circuit on a host of issues, including whether the trial court erred as a matter of law in its jury instruction regarding what constitutes an “instrumentality” of a foreign government – and thus who are “foreign officials” under the FCPA.  As noted in the post, this is a historic appeal, the first time in the FCPA’s history that “foreign official” will be squarely before an appellate court.  Certain of the appellant’s arguments are based on my “foreign official” declaration – see here.

Earlier today, the DOJ filed its response brief – here.

In summary, the DOJ states as follows as directly relevant to “foreign official.”

“The district court’s instructions on the meaning of ‘instrumentality of a foreign government’ were correct. The instructions stated that an instrumentality must perform a governmental function and provided a nonexhaustive list of relevant factors for the jury to consider in deciding whether Teleco was an instrumentality of the government of Haiti. Courts have used similar tests to determine whether an entity is an instrumentality in other contexts and relied on many of the same factors.   The evidence sufficiently established that Teleco was an instrumentality of Haiti during the relevant time period. The government, through its national bank, owned 97% of Teleco’s shares, and, if Teleco had been profitable, those profits would have accrued to the government and the national bank. Because it was not, the national bank subsidized Teleco. Haiti’s president and high-level ministers controlled Teleco through their appointment of Teleco’s board of directors and general director. Teleco’s status as a government instrumentality is also reflected in Haitian law that subjected Teleco officials to its prohibitions against official corruption. Defendants’ narrow construction of the term ‘instrumentality’ is inconsistent with the terms of the FCPA and Congressional intent. The prohibitions in the FCPA are expressed broadly and reflect Congress’s purpose to combat the problem of pervasive foreign bribery. Defendants’ interpretation of the statute is also inconsistent with the provisions of an international treaty and with Congress’s explicitly-stated intent, when amending the FCPA, to conform the statute to the treaty. The term ‘instrumentality’ is also not unconstitutionally vague. It provided fair notice that defendants’ bribery scheme, which involved intentional conduct and had no innocent explanation, was illegal. Moreover, defendants cannot complain that they were left guessing about the legality of their actions when they could have requested an opinion on that question from the Attorney General but did not do so.”

“The instructions on the knowledge element of the FCPA were not plainly erroneous. The government was not required to prove that defendants knew that the recipients of the bribes were “foreign officials” under the statute’s legal definition, and the instructions, when viewed as a whole and in the context of the entire trial, made clear that the jury had to find that defendants believed they were bribing an employee of a foreign government instrumentality.  Overwhelming evidence supported the jury’s finding on that element. Defendants applied for political risk insurance, which was needed only because a foreign government was a party to the Terra-Teleco contract, and they repeatedly referred to Teleco as a government-owned entity during the application process. Esquenazi also testified that Teleco was government-owned at a deposition. The court did not err in giving a deliberate ignorance instruction. It was appropriate as to the FCPA counts without a showing that defendants purposely avoided learning all the facts because the statute explicitly equates knowledge of a circumstance with awareness “of a high probability” that the circumstance exists.  [...] The evidence also supported the instruction. Despite the highly suspicious circumstances surrounding the payments that Rodriguez authorized to the third-party intermediaries, he claimed that, although he was in charge of Terra’s finances, he did not know their true purpose. Even if the court erred in giving the instruction, any error was harmless because the evidence also established that Rodriguez knew that the payments to the intermediaries were bribes.”

As to my “foreign official” declaration, the DOJ states as follows.

“Defendants rely on a 144-page declaration by Professor Michael J. Koehler that was filed on behalf of the defendants in Carson [...]. That declaration is not part of the record in this case, and this Court should not consider it. Although defendants suggest that this Court may take judicial notice of the declaration because it relates to legislative history, the declaration selectively reviews the legislative history and draws inferences in support of a defense motion to dismiss the indictment. As such, it is not necessarily the statement of a disinterested expert, it was not reviewed as a scholarly article, and it was never subject to impeachment in the case below. Even the district court in Carson did not rely on the declaration because it concluded that ‘resort to the legislative history of the FCPA [was] unnecessary.’ [...] If the Court is inclined to consider the Koehler affidavit, the government asks the Court to similarly consider the declaration of FBI Special Agent Brian Smith, also filed in Carson, that discusses references to SOEs in the legislative history.”  See here for a copy of Smith’s declaration.

[In Kiobel v. Royal Dutch Shell, the Second Circuit stated as follows concerning reliance of professor expert declarations filed in another case being used in the case - "we fail to see how statements made in an affidavit, under penalty of perjury, are any less reliable than published works whose accuracy is confirmed only by efforts of the student staff of law journals.”]

Historic “Foreign Official” Appeals Filed

Thursday, May 10th, 2012

For the first time in FCPA history, “foreign official” is headed to an appellate court.

Yesterday, Carlos Rodriguez and Joel Esquenazi filed appeals (here) and (here) in the 11th Circuit challenging their convictions.  As noted in this previous post, in August 2011 a federal jury (after a two week trial) convicted Esquenazi and Rodriguez on all counts for their roles in a scheme to pay bribes to alleged Haitian officials at Haiti Telecom.  In the prior post discussing the verdict, I noted that given the “foreign official” jury instructions at trial, the defendants have a good chance to challenge the instruction on appeal should they so choose.  This was before the strange developments concerning the existence of Haiti Teleco – see here, here and here for prior posts.

As noted in this DOJ release announcing the jury verdict, Esquenazi and Rodriguez were convicted of one count of conspiracy to violate the FCPA and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering.  In October 2011, Esquenazi was sentenced to an FCPA record 15 years in prison and Rodriguez was sentenced to 7 years in prison - see here for the prior post.

The remainder of this post summarizes the initial briefs of Rodriguez and Esquenazi.

Rodriguez Brief

Representing Rodriguez in his appeal are Foley & Lardner attorneys David Simon (here), Michael Halfenger (here), James Cirincione (here), Pamela Johnson (here), Jaime Guerrero (here), Kenneth Winer (here), and Lauren Valiente (here).

The brief presents the following issues.

“1. Whether the District Court erred as a matter of law in its jury instruction regarding what constitutes an “instrumentality” of a foreign government for purposes of construing the counts, including the money laundering counts, that were dependent upon the Foreign Corrupt Practices Act (“FCPA”).

2. Whether the District Court abused its discretion when it refused to hold an evidentiary hearing concerning the circumstances and history regarding a declaration from the current Haitian Minister of Justice that stated that Telecommunications D’Haiti (“Teleco”) was not an “instrumentality” of the Haitian government that the Government turned over just after the jury’s verdict followed by a second declaration that the United States Government was involved in procuring that reversed the first declaration, which contained clear exculpatory evidence .

3. Whether the District Court erred as a matter of law in its “knowledge” jury instruction regarding the FCPA-dependent counts, including the money laundering counts.

4. Whether there was sufficient evidence to support jury’s verdicts as to the FCPA counts.

5. Whether the District Court plainly erred when it submitted the wire fraud-dependent counts, including the money laundering counts, to the jury based on an erroneous jury instruction that failed to require proof that of the jurisdictional facts necessary for federal wire fraud, that is that the wire communications crossed state lines (i.e., inter-state communications).

6. Whether the District Court plainly erred in its mens rea instruction to the jury regarding the wire fraud-dependent counts, including the money laundering counts, because the jury was not asked to find intent to defraud for the wire fraud-dependent counts.

7. Whether there was sufficient evidence to support the jury’s verdicts as to the wire fraud-dependent counts.

8. Whether the Government’s attempt to change the basis of its wire fraud theory from wire transfers to facsimiles constitutes an impermissible variance from its initial theory of the case.

9. Whether the District Court erred as a matter of law in its jury instruction of what constituted a violation of the Haitian bribery law as proper predicate for the money laundering counts.

10. Whether the District Court abused its discretion in not granting a motion to dismiss the money laundering counts where the “proceeds” of the predicate crimes were the same transfers of money that were charged as the money laundering transactions, thereby violating the merger rule, and whether there was sufficient evidence to support jury’s verdicts as to the money laundering counts for the same reason.

11. Whether Mr. Rodriguez’s sentence must be vacated.

12. Whether the forfeiture order and the forfeiture aspect of the amended judgment and commitment order must be vacated because the oral sentence pronounced by the District Court did not order forfeiture.”

In summary, the brief argues as follows (internal citations omitted).

“1. The District Court abused its discretion by refusing to charge the jury using Mr. Rodriguez’s proposed instructions as to the terms “foreign official” and “instrumentality.” The interpretation of these terms under the FCPA is an issue of first impression in this Court. However, the District Court’s instructions conflict with this Court’s existing precedent. The District Court instructed the jury that an instrumentality of the Haitian government “is a means or agency through which a function of the foreign government is accomplished.” This Court explicitly rejected such a definition while interpreting another statute that contains the term “instrumentality” in a virtually identical statutory context.  Addressing whether a private corporation that operated a prison system on behalf of the State of Florida was an “instrumentality of a state,” this Court held that the term “instrumentality of a state” referred to “governmental units or units created by them,” and rejected the functionality test incorporated into the instructions given by the District Court.. Mr. Rodriguez’s proposed instructions were consistent with this Court’s precedent. Because this Court rejected the functionality test in the context of another statute, the District Court abused its discretion by giving such an instruction in this case, in which Mr. Rodriguez may lose his liberty for seven years.

2. The District Court abused its discretion by denying Mr. Rodriguez’s motion for an evidentiary hearing regarding two contradictory declarations executed by Jean Max Bellerive, the Minister of Justice and Public Safety for Haiti (the Haitian government’s analog to the United States Attorney General). During the course of Mr. Rodriguez’s trial, Bellerive signed a declaration stating that Teleco “has never been and until now is not a State enterprise. Since its formation to date, it has and remains a Company under common law.” The Government disclosed this declaration five days after Mr. Rodriguez had been convicted. In opposing Mr. Rodriguez’s motion for an evidentiary hearing, the Government produced a second declaration signed by Bellerive that “clarified”several of the declarations key statements about Teleco’s status under Haitian law.  The United States government substantially assisted the Minister in preparing the second, “clarifying” declaration. Despite the confusion created by the conflicting declarations, the District Court declined to hold an evidentiary hearing on the potential Brady issues posed by these events. That was an abuse of discretion.

3. The District Court also abused its discretion by rejecting Mr. Rodriguez’s requested jury instructions as to the “knowledge” requirement of the FCPA and by giving a deliberate ignorance instruction with no basis in the evidence.

4. The District Court erred by denying Mr. Rodriguez’s motion for acquittal, because the evidence is insufficient to support the jury’s determination that Teleco was an “instrumentality” of the Haitian government under the FCPA, and because no evidence was admitted at trial establishing that Teleco performed a function of the Haitian government.

5. The District Court erred by denying Mr. Rodriguez’s motion for acquittal based on the insufficiency of the evidence. Most of the trial testimony centered on Mr. Rodriguez’s co-defendant, Esquenazi, who had been the CEO of the small telecommunications company at issue here. He, not Mr. Rodriguez, had direct contacts with Haitian citizens. The Government’s evidence against Mr. Rodriguez amounted to the fact that he signed Terra’s checks and Terra’s former Comptroller, Perez, thought Mr. Rodriguez was in one meeting where bribes were discussed. Perez’s testimony was uncorroborated, contradicted by his earlier statements to the Government, and inherently unreliable. The evidence is insufficient to support the jury’s verdict that Mr. Rodriguez conspired to violate any federal law.

6. The District Court erroneously instructed the jury as to the jurisdictional element for the interstate wire fraud communication counts and the elements of money laundering, because the jury was not instructed that the wires must cross state lines, and the jury was not instructed that Government had to prove that the proceeds of the specified unlawful activity resulted from a felony under Haitian law to support a money laundering conviction.

7. The evidence does not support the jury’s determination that Mr. Rodriguez committed wire fraud, because there is no evidence that any interstate wires were sent. The District Court evidence adduced at trial does not support the jury’s verdict as to any count of conviction, even when the evidence is construed in favor of the Government.

8. Finally, the District Court’s Amended Judgment and Commitment Order imposed an invalid sentence by including forfeiture because the District Court did not announce an order of forfeiture as part of Mr. Rodriguez’s orallyimposed sentence.”

Esquenazi Brief

Representing Esquenazi in his appeal are Perkins Coie attorneys Markus Funk (here) and Michael Sink (here) and Michael Rosen (Michael Rosen P.A.).

Esquenazi adopted portions of co-appellant Rodriguez’s brief relating to the FCPA, intra-state wire fraud issues, and the Haitian bribery and in addition the brief presents the following issues.

1. “Whether the district court erred by refusing to conduct an evidentiary hearing on Brady issues.”

2. “Whether Esquenazi is entitled to an acquittal because employees of Haiti Teleco were not “foreign officials” within the meaning of FCPA simply because the National Bank of Haiti owned shares of Haiti Teleco and the Haitian government appoints board members and directors.”

3. “Whether the FCPA jury instructions adequately conveyed the requisite governmental function necessary to establish that Haiti Teleco was an “instrumentality” of the Haitian government and Esquenazi’s knowledge of the same.”

4. “Whether the district court erred by improperly applying the sentencing guidelines as to leadership role, perjury and loss amount.”

In summary, the brief argues as follows (internal citations omitted).

“Although the FCPA is aimed at corrupt payments made to “foreign officials,” the Government never established that Haiti Teleco performed government functions similar to a governmental department or agency, such that Haiti Teleco’s employees would qualify as “foreign officials.” Instead, the Government relied on the National Bank of Haiti’s ownership of stock in Haiti Teleco and the Haitian government’s appointment board members and directors. Six days after the jury reached its verdict, however, the Government disclosed the existence of a declaration from the then-current Prime Minister of Haiti, Jean Max Bellerive, prepared ten days prior to the case going to the jury. The declaration stated that Haiti Teleco “has never been and is not a State enterprise,” and that the by-laws of the company had never been changed as required by law to make Haiti Teleco a government-owned entity.

Under Brady v. Maryland, the Government has an affirmative obligation under the Due Process Clause of the Fifth Amendment to “learn of any favorable evidence known to others acting on the government’s behalf in the case” and disclose any potentially exculpatory evidence to the defendant. Esquenazi requested a Brady hearing to determine if and when the Government knew of the contents of this critical declaration. The district court erred in refusing to hold an evidentiary hearing under the circumstances.

Esquenazi is also entitled to an acquittal on all FCPA-based counts because the term “instrumentality” in the FCPA should be construed to encompass only foreign entities performing governmental functions similar to departments or agencies. Here, the Government failed to establish that Haiti Teleco performed a governmental function. Despite the Government’s continued reliance on the premise that state-ownership or state-control of a business entity makes that entity and “instrumentality” of the government under the FCPA, that theory was explicitly considered by the drafters of the FCPA, but not included in the statute, and is inconsistent with the language of the statute as drafted. Because so many individuals and companies prosecuted by the Government prefer to resolve their cases prior to trial, the validity of the Government’s theory has seldom been tested in court, and never before by a United States Court of Appeals. This case presents an opportunity to review the Government’s aggressive enforcement of a less-than-clear federal statute and properly limit its scope to corrupt payments made to “foreign officials,” including employees of “instrumentalities” that perform governmental functions similar to governmental departments and agencies.

Esquenazi is also entitled to an acquittal or a new trial because the jury instructions failed to require that the jury determine whether Haiti Teleco ever exercised a government function akin to a department or agency, or even define “governmental function.” Because the jury could have reached its verdict without any consideration of the function of Haiti Teleco, the jury instructions were deficient.

Finally, the district court improperly calculated Esquenazi’s sentence. Esquenazi’s leadership role should have been that of an organizer or manager rather than a leader. Further, his enhanced sentence for perjury was improper both as to the substance of the district court’s findings and the procedure by which it made the determination.”

Haiti Teleco Roundup

Thursday, March 22nd, 2012

Last week, the DOJ announced (here) that Jean Rene Duperval (a former director of international relations for Haiti Teleco) was “convicted by a federal jury on all counts for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies.”

Assistant Attorney General Lanny Breuer stated as follows.  “Mr. Duperval was convicted by a Miami jury of laundering $500,000 paid to him as part of an elaborate bribery scheme.  As the director of international relations for Haiti’s state-owned telecommunications company, Duperval doled out business in exchange for bribes and then used South Florida shell companies to conceal his crimes.  This Justice Department is committed to stamping out corruption wherever we find it.”  Duperval is scheduled to be sentenced on May 21st.

The Haiti Teleco case (minus the manufactured and now former Africa Sting case) is the largest in FCPA history in terms of defendants charged – 13.  Below is a brief summary of the actions.

Individuals Charged With FCPA and/or Related Offenses

Antonio Perez.  In April 2009, Perez pleaded guilty to conspiracy to violate the FCPA.  As noted in this prior post, in January 2010, he was sentenced to 24 months in prison.

Juan Diaz.  In May 2009, Diaz pleaded guilty to conspiracy to violate the FCPA.  As noted in this prior post, in July 2010, he was sentenced to 57 months in prison.

Jean Fourcand.  As noted in this DOJ release, in February 2010, Fourcand pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the Haiti Teleco scheme.  In May 2010, Fourcard was sentenced to 6 months in prison.

Joel Esquenazi and Carlos Rodriguez.  As noted in this prior post, in August 2011, Esquenazi and Rodriguez were convicted by a jury for conspiracy to violate the FCPA, FCPA violations, and other offenses.  As noted in this prior post, in October 2011, Esquenazi was sentenced to 180 months in prison and Rodriguez was sentenced to 84 months in prison.  As noted below, Esquenazi and Rodriguez are appealing their convictions to the 11th Circuit.

Marguerite Grandison.  As noted in this DOJ release, in December 2009, Grandison was charged with one count of conspiracy to violate the FCPA and commit wire fraud, seven counts of FCPA violations, one count conspiracy to commit money laundering and 12 counts of money laundering.  According to a recent docket search, in February 2012, Grandison entered a not guilty plea and shortly thereafter the docket states as follows – “docket restricted/sealed until further notice.”

Washington Vasconez Cruz, Amadeus Richers and Cecilia Zurita.  These individuals (associated with Cinergy Telecommunications) are fugitives according to the DOJ.

“Foreign Officials” Charged With Non-FCPA Offenses

Duperval – see above.

Patrick Joseph. As noted in this prior post, the former director of international relations at Haiti Teleco pleaded guilty in February 2012 to conspiracy to commit money laundering. In July 2012, he was sentenced to 366 days in prison.

Robert Antoine.  As noted in this prior post, the former director of international affairs at Haiti Teleco pleaded guilty in March 2010 to conspiracy to commit money laundering.  In June 2010, he was sentenced to 48 months in prison.

Entity Charged

Cinergy Telecommunications.  As noted in this prior post, in February the DOJ moved to dismiss charges against Cinergy because it is a non-operational entity with no assets of any real value.

*****

Carlos Rodriguez and Joel Esquenazi are appealing their convictions to the 11th Circuit.  See here for the prior post regarding Rodriguez and his appellate counsel.  Recently, T. Markus Funk and Michael Sink (here and here of Perkins Coie) began representing Esquenazi in connection the appeal.  Funk, a former federal prosecutor in Chicago and US State Department lawyer co-chairs the ABA’s Global Anti-Corruption Task Force (here).

*****

This prior post discussed Haiti Teleco’s other preferred providers – namely IDT Corp. and Fusion Telecommunications – and linked to a recent Wall Street Journal article titled the “Looting of Haiti Teleco.”  The WSJ article was shortly countered with this post by Lucy Komisar.