Don't Let the Words Fool You - U.S. Authorities Prove They Are Not Limited By The Text Of The FCPA Statute

V&E Foreign Corrupt Practices Act Update E-communication, June 11, 2012

Recent convictions in a wide-ranging Foreign Corrupt Practices Act (FCPA) enforcement action punctuate the government's enthusiasm for pursuing broad theories of liability in foreign bribery cases. Moving beyond direct violations and theories dependent on finding a conspiracy to violate the FCPA, the government has shown an increased proclivity for using money laundering and Travel Act charges to expand the scope of FCPA prosecutions. U.S. efforts to expand the scope of FCPA enforcement coincide with the recent enactment of the UK Bribery Act of 2010 (UK Bribery Act), which prohibits a broader range of activity than the FCPA. The combined effect of these developments is an environment of substantially broadened liability for both commercial and public bribery.

Foreign government officials convicted in Haiti Teleco case

The government's intent to punish a wide range of individuals for foreign public corruption was on display in the recent conviction of Jean Rene Duperval, a former official of the Haitian-state owned telephone company, Telecommunications d'Haiti (Haiti Teleco), for conspiracy to launder money paid to him by two Miami-based telecommunications firms.1 At trial, U.S. prosecutors presented evidence that executives from the two U.S.-based companies bribed Haiti Teleco officials in order to obtain preferential rates and other business advantages. Instructed by the Haitian officials, the U.S.-based companies deposited hundreds of thousands of dollars in shell companies which then made payments to the Haitian officials. Several executives of the U.S. companies have been convicted and sentenced to lengthy prison terms for FCPA violations.2

In the Haiti Teleco case, the U.S. government relied on money laundering and conspiracy charges to target the foreign officials involved in the illicit conduct, thereby expanding the potential range of individuals liable for foreign bribery. Unlike anti-corruption statutes in many other jurisdictions, such as China, the FCPA prohibits U.S. companies from offering bribes to foreign officials, but does not make foreign officials themselves liable for taking bribes. Despite this limitation, the U.S. government in the Haiti Teleco case prosecuted three Haitian officials involved in the foreign bribery scheme by relying on non-FCPA offenses. Duperval was convicted in March of two counts of conspiracy to commit money laundering and 19...

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