Another Successful FCPA Prosecution Against Individuals—More Terra Telecom Execs Appear Headed For Prison For Haiti Bribes

Author:Mr Paul Friedman and Ruti Smithline
Profession:Morrison & Foerster LLP
 
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After a two-and-a-half-week trial and five hours of deliberation, a federal jury in Miami last week returned yet another favorable verdict for the Department of Justice (the DOJ) in a Foreign Corrupt Practices Act ("FCPA") prosecution. Joel Esquenazi and Carlos Rodriguez, former executives of Terra Telecommunications Corp., were convicted on all counts for their roles in a scheme to pay bribes to Haitian government officials at Telecommunications D'Haiti S.A.M. (Haiti Teleco).1

THE TRIAL AND CONVICTION

Esquenazi was the president and Rodriguez was the executive vice president of Terra, a Miami-based telecommunications firm. Terra had several contracts with Haiti Teleco—the sole provider of land-line telephone service in Haiti and a state-owned company.

According to evidence presented at trial, from 2001 through 2005, Terra paid more than $890,000 to shell companies to be used for bribes to Haiti Teleco officials. The company allegedly hid these payments through false records claiming that the payments were for "consulting services," which were never intended or actually performed. The DOJ alleged that the purpose of the bribes "was to obtain various business advantages from the Haitian officials for Terra, including the issuance of preferred telecommunications rates, reductions in the number of minutes for which payment was owed, and the continuance of Terra's telecommunications connection with Haiti."2

The jury found Esquenazi and Rodriguez guilty of one count of conspiracy to violate the FCPA and wire fraud, 7 counts of substantive FCPA violations, one count of money laundering conspiracy, and 12 counts of money laundering.

Commenting on the verdict, Assistant Attorney General Lanny A. Breuer said:

This verdict is another powerful example that bribery of government officials – whether at home or abroad – has serious consequences. In finding the defendants guilty on all charged counts, the jury sent an unmistakable message that paying off foreign officials does not, in fact, pay off.3

Esquenazi and Rodriguez are scheduled to be sentenced on October 13, 2011. The defendants face up to 5 years imprisonment on each of the FCPA-related and wire fraud counts, and a maximum penalty of 20 years in prison for each of the conspiracy and substantive money laundering counts. The defendants also face hefty penalties and the forfeiture count included in the indictment that the court will determine at a later date. In the meantime, Esquenazi was...

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