On January 19, 2010, the DOJ announced (here) a new type of FCPA enforcement action. While not the first use of undercover techniques in an FCPA enforcement action (see here), the new type of case was certainly the largest and most dramatic use of pro-active, undercover investigative techniques in the FCPA’s history.
Twenty-two executives and employees of companies in the military and law enforcement products industry were criminally indicted “for engaging in schemes to bribe foreign government officials to obtain and retain business.” However, there was no real foreign official – just FBI agents posing as representatives of a Gabon foreign official – and the case was manufactured by the government with the assistance of Richard Bistrong (an individual who previously pleaded guilty to separate FCPA violations – see here).
In announcing the indictments, Assistant Attorney General Lanny Breuer called the action a “turning point.”
The cases were assigned to Judge Richard Leon (U.S. District Court for the District of Columbia). Given the number of defendants indicted, the cases were segregated into smaller units for trial.
The first trial, which started in May 2011, involved Andrew Bigelow, Pankesh Patel, John Benson Weir, and Lee Allen Tolleson. As
highlighted in this prior post, at the close of the DOJ’s case, Judge Leon dismissed a substantive FCPA count as to Patel, a substantive FCPA count as to Tolleson, and dismissed a money laundering count as to all defendants. In July 2011, Judge Leon declared a mistrial as to all remaining counts of the DOJ’s “turning point” prosecution. (See here for the prior post).
The second (of four) trials in this manufactured case began in September 2011 (see here for the prior post) and involved the following defendants: John Mushriqui, Jeana Mushriqui, Patrick Caldwell, Stephen Giordanella, John Godsey, and Mark Morales. As noted in this prior post, in late December 2011, Judge Leon ruled on defendants’ Rule 29 acquittal motions and dismissed the conspiracy charge against all defendants. Because Giordanella faced only a conspiracy charge, he was exonerated and Judge Leon stated as follows: “Mr. Giordanella, you are excused [...] you are free to go.”
A knowledgeable source confirms that the jury has returned not guilty verdicts on all counts as to Caldwell and Godsey. According to the source, the jury has yet to reach a verdict as to the Mushriqui’s and Morales. According to this report from Main Justice, if the jury remains hung as to the Mushriqui’s and Morales, Judge Leon has indicated he will declare a mistrial tomorrow.
