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From The Dockets

As highlighted in this previous post [1], Misonix has been under FCPA scrutiny since September 2016 and in March 2017 Cicel (Beijing) Science & Technology Co. Ltd. brought a variety of civil claims against Misonix concerning its business relationship with the company.

Among the claims brought by Cicel was a breach of contract claim. Misonix acknowledged that it terminated the contract, but argued that it “was justified in doing so because of Misonix’s FCPA investigation” regarding Cicel. In response, Cicel claimed that the investigation “was a ruse for breaching the contract.” Recently, U.S. District Court Judge Arthur Spatt (E.D.N.Y.) allowed Cicel’s claim to proceed beyond the motion to dismiss stage. (See 2017 WL 4535933).

Harder Appeals Sentence

As highlighted in this recent post [2], Dmitrij Harder was recently sentenced to 60 months (5 years) in federal prison and also ordered to forfeit $1.9 million after pleading guilty to two counts of violating the FCPA for “bribing an official at the European Bank for Reconstruction and Development (EBRD).”

Harder is seeking review of his sentence by the Third Circuit. As highlighted in this recent brief [3], an issue is whether Harder waived his right to appeal in the plea agreement, but more substantively Harder is claiming as follows.

“The district court not only rejected but actually interrupted and refused to allow defense counsel to complete one of his arguments for a downward variance in mitigation of Mr. Harder’s sentence, that is, that no loss to any victim had resulted from the bribes paid in this case, and that the two projects for which Mr. Harder had corruptly sought financing proved successful and highly beneficial to the region where they were built. Judge Diamond repeatedly castigated counsel for having presented this argument in his sentencing memorandum and for advancing it at the sentencing hearing. The court asserted that because ultimate benefit from a project would not negate the paying of bribes in violation of FCPA, any good that resulted could not be mitigating for purposes of punishment.

Also before imposing sentence, the court listed the factors defense counsel had argued in support of a downward variance from the sentencing guidelines range the court had determined, noting that one such factor concerned the need to avoid unwarranted disparities pursuant to 18 U.S.C. § 3553(a)(6), but refused to vary downward, concluding that “I do not believe it would be reasonable in the circumstances presented here.”  The court did not suggest what it was in the “circumstances” that called for Mr. Harder’s sentence, after pleading guilty and cooperating, for paying $3.5 million in bribes, to be the second longest (of 55 non-trial cases) imposed for this offense nationally in the last decade, where the average prison sentence was 13 months. Some 33% of defendants (20 of 61) received probation.”

[…]

The district court committed at least two errors in sentencing Mr. Harder that are not within the plea agreement’s appellate waiver as properly interpreted, i.e., as explained by the court in its guilty plea colloquy with Mr. Harder’s express acknowledgment. First, Judge Diamond erred in declaring that the absence of loss to any victim from the defendant’s criminal conduct, coupled with exceptionally positive economic results flowing from the defendant’s nevertheless criminal conduct, is not a potentially mitigating factor for sentencing in an official bribery case. Relatedly, the court committed a profound procedural error when, for that reason, it interrupted and prevented defense counsel from fully arguing that valid basis for a downward variance.

Second, the district court flatly rejected another ground for downward variance – the need to avoid unwarranted disparities among offenders convicted of similar conduct under § 3553(a)(6) – despite having accepted the detailed defense showing that such sentences in this category of case, on a national basis, overwhelmingly fall far below the calculated Guidelines range.”

[4]

Ardila Plea

The DOJ recently announced [5] in connection with its sprawling investigation concerning corruption involving Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A., that Fernando Ardila Rueda (a partial owner of several Florida-based energy companies) pleaded guilty in federal court in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of violating the FCPA. U.S. District Judge Gray H. Miller accepted the guilty plea. Sentencing is scheduled for Feb. 8, 2018.”

As stated in the release:

“According to admissions made in connection with his plea, Ardila conspired with U.S.-based businessmen Abraham Jose Shiera Bastidas (Shiera) and Roberto Enrique Rincon Fernandez (Rincon) to pay bribes and other things of value to PDVSA purchasing analysts. The bribes were paid to ensure that Shiera’s and Rincon’s companies were placed on PDVSA bidding panels and in order to obtain or retain business with PDVSA. From 2008 through 2014, while he was sales director, manager and partial owner of several of Shiera’s companies, Ardila provided entertainment and offered bribes to PDVSA officials based on a percentage of the value of contracts the officials helped to award to Shiera’s companies.”

FCPA Institute - Boston (Oct. 3-4)

A unique two-day learning experience ideal for a diverse group of professionals seeking to elevate their FCPA knowledge and practical skills through active learning. Learn more, spend less. CLE credit is available.

Learn More & Register [6]