[This post is part of a periodic series regarding “old” FCPA enforcement actions]
As noted in this post, one interesting aspect of the recently announced Foreign Corrupt Practices Act enforcement action against Joseph Baptiste is he previously entered into a plea agreement but does not intended to honor the plea agreement.
As highlighted below, the FCPA enforcement action against Ramendra Basu (a former World Bank official) for, among other things, alleged bribery in Kenya involved a similar dynamic and this post summarizes the enforcement action as well as a related enforcement action against Gautam Sengupta (a former World Bank Task Manager).
In this 2002 criminal information, the DOJ charged Basu with one count of conspiracy to commit wire fraud and so-called honest services fraud as well as one count of violating the FCPA’s anti-bribery provisions. Basu, an Indian national, was charged under the dd-3 prong of the FCPA.
As stated in the information:
“Basu was employed at the World Bank’s Consultant Trust Funds Office [… as] a Trust Funds Manager whose duties included recommending consultants to World Bank Task Managers to work on projects they managed, and also approving Task Manager’s requests for allocation of Consultant Trust Funds to pay the consultants.
A managing director of a consultant company whose principal place of business was located in Stockholm, Sweden was awarded several consulting contracts by the World Bank, at the request of the Task Manager [Sengupta].
An American consultant sought the award of several World Bank financed contracts from the Task Manager. Previously, the American Consultant had partnered with Basu to bid on a contract relating to a World Bank road construction project in Kenya. The American Consultant was also an associate of the Swedish Consultant.
A local official of the Kenyan government managed the same World Bank road construction project in Kenya. Part of the Kenyan Official’s duties was to supervise selection of subcontractors from among competing bids for work on the project.”
According to the DOJ, Basu conspired with others:
“to facilitate bribes from World Bank consultants to the World Bank Task Manager in exchange for which the consultants would receive contracts from the World Bank; and
to conceal from the World Bank the payment and receipt of bribes to the Task Manager by arranging for bribe payments to be made in cash in London, England.”
As to the FCPA offense, the information states that Basu:
“while in the territory of the U.S. … corruptly made use of a means and instrumentality of interstate commerce … an international electronic mail message containing the … Kenya bank account information from Washington, D.C. to the Swedish Consultant in Sweden, in furtherance of a promise to pay and authorization of the payment of money … $50,000 to be wire-transferred to an overseas account … to the Kenyan Official, while knowing that all or a portion of such money would be offered, given, and promised to the foreign official, for the purpose of inducing the official to use his position and influence with a foreign government to business to … the American Consultant and others.”
Basu agreed to this plea agreement shortly after the information was filed, but approximately three years later and before he was sentenced, Basu filed a motion to withdraw his guilty plea.
As stated in this order denying Basu’s motion to withdraw his guilty plea:
“Basu alleges legal innocence, attributing his mistaken plea to his misunderstanding of the intent element of the criminal charges to which he pled, and the pressure he felt to enter the plea in haste.”
Specifically, Basu claimed “that the [plea] offer presented was a ‘now or never’ opportunity which implied that he would face a lengthy prison sentence if he did not agree. Basu further claimed that his plea was “tainted because he entered it on the advice of his attorney that he would ‘have no chance at trial.'”
Basu’s claim of innocence was based on “his assertion, that, as a foreign citizen, he [was] not familiar with our judicial system and the requirement that a criminal offense be accompanied by the requisite intent. Basu assert[ed] that he [was] innocent because he did not intend to facilitate any wrongdoing.”
In this D.C. Circuit opinion, the appellate court upheld that trial court’s denial of Basu’s motion to withdraw his guilty plea.
In its sentencing memo, the DOJ noted that Basu “continues to deny his role in the offenses” and given his position at the World Bank that his “actions were particularly damaging because they effectively undermined the trust foreign governments place in the World Bank.”
In this criminal information based on the same substantive allegations in the Basu action, the DOJ criminally charged Sengupta with one count of conspiracy to commit wire fraud and so-called honest services fraud as well as one count of violating the FCPA’s anti-bribery provisions. Like Basu, Sengupta (also an Indian national) was charged under the dd-3 prong of the FCPA.
Pursuant to this plea agreement, Sengupta agreed to pay $127,000 in restitution and cooperate with the government. This DOJ sentencing memo states: “Although [information provided by Sengupta] did not lead to additional prosecutions of World Bank employees, the information was sufficient to allow World Bank officials to debar certain individuals from bidding on future World Bank projects.”
As further noted in the memo, Sengupta also cooperated with the Government of Sweden which charged Claus Fjellner and Eje Carlson, Swedish citizens, with bribery in connection with the kickbacks to Mr. Sengupta.” In the memo, the DOJ requested a sentence between 15-21 months.
As reflected in this Judgment, Sengupta was sentenced to two months in prision and one year of supervised release.
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