After suffering its fair share of recent FCPA sentencing setbacks (see here, here, and here for instance), the DOJ largely got the sentence it was seeking (five years) earlier this week in the S.D. of Florida as Judge Joan Lenard sentenced Jorge Granados to 46 months in prison followed by 2 years of supervised release. Unlike in certain of the cases where judges significantly rejected DOJ sentencing requests, the DOJ issued a press release (here) in connection with Granados’s sentence.
As detailed in this prior post, Granados (the founder, Chief Executive Officer and Chairman of the Board of Latin Node between 1999 and 2007) was criminally charged in December 2010 for his role in an alleged bribery scheme involving Hondutel “the wholly state-owned telecommunications authority in Honduras, established under Honduran law and headquartered in Tegucigalpa, Honduras.” According to the indictment, Hondutel’s operations “were overseen by another Honduran government entity, Comision Nacional de Telecomunicaciones.” The indictment charged one count of conspiracy to violate the FCPA’s anti-bribery provisions, twelve counts of FCPA anti-bribery violations, one count of money laundering conspiracy, and five counts of money laundering.
In May (see here), Granados pleaded guilty to 1 count of conspiracy to violate the FCPA and, in exchange, the DOJ agreed to dismiss the remaining 18 counts. Granados’s co-defendant Manuel Caceres (a senior executive of Latin Node) pleaded guilty in May prior to Granados and testified as a cooperating witness in the Granados sentencing hearing. Caceres is to be sentenced on November 28th and two other defendants in a related case (Manuel Salvoch and Juan Pablo Vasquez) are to be sentenced in December.
In arguing for a sentence below the advisory guidelines range, John Wylie (counsel to Granados) asserted so-called “imperfect coercion” and stated as follows. “Mr. Granados’ entire livelihood, his company, and the substantial investment put into both were jeopardized by the corruption of Hondutel. Mr. Granados was put between a rock and hard place: comply with Hondutel’s demands for additional payments or shut down the business in Honduras after almost a decade of establishing it there. If LatiNode failed to meet Hondutel’s demands, the Hondutel officials would effectively shut down LatiNode because they controlled the telecommunications market in Honduras and set the rules. It was the corrupt officials at Honduras that created and drove the anti-competitive market that, at a minimum, made LatiNode feel as though it had to give the corrupt officials what they wanted to survive in the market.”
The DOJ, in reply, stated that Granados’s request pursuant to Section 5K2.12 of the Sentencing Guidelines was off-base because he did not claim “physical injury, substantial damage to property or similar injury” if he refused the bribe demands. The DOJ stated as follows. “Rather, Defendant – who did not even live in Honduras but resided in Florida, where his business was based – simply asserts that his own and his company’s economic well-being would have been affected by his refusal to authorize the bribe payments.” The DOJ also pointed out that Granados neglected to cite a sentence in Section 5K2.12′s policy statement that “personal financial difficulties and economic pressures upon a trade or business do not warrant a downward departure.”
The 46 month sentence of Granados is one of the most harsh individual sentences in FCPA history. It is believed that the top 6 list includes: Charles Edward Jumet (87 months – including 20 months for a false statement charge ), Juan Diaz (57 months), Granados (46 months), John Warwick (37 months) Christian Sapsizian (30 months) and Antonio Perez (24 months). Jumet and Warwick were both sentenced in the W.D. of Virginia, all others in the S.D. of Florida – where several additional FCPA defendants (in addition to Solvach and Vasquez) are scheduled to be sentenced.