Dial 'P' For Prison: Former Telecommunications Executive Sentenced To Record-Breaking 15 Years For FCPA Violations

Author:Ms Amy Riella and Britt Cass Steckman
Profession:Vinson & Elkins LLP
 
FREE EXCERPT

Last week, a judge in the U.S. District Court for the Southern District of Florida sentenced Joel Esquenazi, the former president of Miami-based Terra Telecommunications Corp., to an unprecedented 15 years in prison. In August, Esquenazi and a former executive vice president of Terra, Carlos Rodriguez, were convicted by a jury of conspiracy to violate the U.S. Foreign Corrupt Practices Act (FCPA), substantive FCPA violations, and money laundering associated with paying bribes to officials of Telecommunications D'Haiti (Haiti Teleco). In addition to prison sentences (Rodriguez was sentenced to seven years), the defendants were ordered to forfeit $3.09 million. The indictment alleged that Esquenazi, Rodriguez, and co-conspirators paid over $890,000 in bribes to directors of Haiti Teleco in return for business advantages, bribes that were recorded in the company books and records as "commissions" or "consulting fees" to shell companies, in violation of the FCPA's books and records provisions. This case is noteworthy not because of the facts alleged — in cases brought under the FCPA, the government frequently alleges bribes and gifts disguised as commissions and consulting fees. Nor is it remarkable because of the number of defendants indicted in the scheme — the number of indicted parties in the Haiti Telco matter (12), while record-breaking at the time, was far surpassed when the government netted 22 defendants in a sting operation in 2010. The roughly $890,000 paid in bribes is downright paltry when compared to contemporaneous enforcement matters, in which the government alleges bribes totaling well into the millions and even the hundreds of millions. Rather, what makes the Haiti Telecom convictions remarkable when compared to other FCPA convictions is the length of the prison sentence imposed. Before Esquenazi, the longest sentence imposed for FCPA-related violations was seven years and three months. On November 13, 2009, Charles Paul Edward Jumet (Jumet) pled guilty to conspiring to violate the FCPA and making false statements to federal agents in connection with corrupt payments to Panamanian government officials, and was subsequently sentenced on April...

To continue reading

FREE SIGN UP