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Judge (Again) Significantly Rejects DOJ’s Recommendations In Sentencing Nexus Defendants

As noted in this [1] DOJ release, last week several defendants in the Nexus Technologies enforcement action (see here [2] for prior posts) were sentenced. Because many media sources merely regurgitate DOJ releases in such instances, this post may be the first you’ll learn that the sentencing judge in the Nexus matter significantly rejected the DOJ’s sentencing recommendations.

For instance, and as described more fully below, the DOJ sought a 14-17 year sentence for lead defendant Nam Nguyen, but the judge sentenced him to 16 months (plus 2 years of supervised release).

Further, the DOJ sought multi-year sentences for two defendants, but the judge sentenced them to probation.

The DOJ’s sentencing memoranda (see here [3] for the 79 pages of collective material) provide an interesting read and clearly demonstrate the growing divide between how the DOJ views FCPA defendants and how judges view such defendants at sentencing. For instance, Judge Shira Scheindin stated at Frederic Bourke’s sentencing (see here [4]) “after years of supervising this case, it’s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both.”

The DOJ stated in Nam Nguyen’s sentencing memo that its recommendation (168-210 months) should be accepted “to promote general deterrence” and that conduct such as Nguyen’s “will hardly be deterred by sending the message that the consequences of such conduct is at worst several months of imprisonment.”

Yet, the judge still sentenced Nam Nguyen to 16 months (plus 2 years of supervised release).

Also of note is that the DOJ criticized Nam Nguyen for “subjectively” looking at the “history of FCPA sentencing, focusing on the statistical outlier of the case U.S. v. Green … but ignoring the more common cases of significant prison time” such as “Charles Jumet, who paid less than 1/3 of what Nguyen paid in bribes, but received 87 months’ imprisonment.”

Let me assert that it is the DOJ who is “subjectively” looking at the “history of FCPA sentencing” and that Jumet is the “statistical outlier” – not sentences such as of the Greens.

Indeed, it is very common for FCPA defendants to be sentenced to prison terms measured in days and months, not years.

Consider the following recent sentences:

Greens – 6 months (August 2010)

Frederic Bourke – 366 days (November 2009)

Jim Bob Brown – 366 days (January 2010)

Jason Edward Steph – 15 months (January 2010)

The below post provides an overview of the Nexus sentences as well as the DOJ’s sentencing memos.

Nam Nguyen

Sentence: 16 months, 2 years of supervised release

DOJ Recommendation: 168-210 months

In its sentencing memorandum, the DOJ stated that Nguyen “paid bribes to multiple Vietnamese government officials in exchange for contracts for his business” and that “Nguyen literally offered a bribe on every single contract bid over a period of more than nine years …”.

DOJ sought a four-level sentencing enhancement “because the offense involved a public official in a high-level decision-making or sensitive position.” Specifically, the DOJ asserted that Nguyen paid bribes to “Nguyen Van Tan, who was the Managing Director of T&T Co. Ltd. … the procurement arm of Vietnam’s Ministry of Public Safety.”

Other items of interest from the DOJ’s sentencing memorandum.

In a footnote, the DOJ asserts that “the court has ruled in favor of the government” on the “foreign official” issue briefed in the case. However, as noted in this [5] prior post, the DOJ specifically argued throughout its brief that a court decision as to this issue was premature. What actually happened is that the judge denied the defendants’ motion to dismiss without comment or analysis. The DOJ stated in the same footnote that because Nguyen’s counsel discussed the “foreign official” issue in his sentencing memorandum, that this “raises serious questions as to whether or not he has actually accepted responsibility for his crimes.”

The DOJ memo contains “Exhibit A” – a chart detailing the “Sentences of Natural Persons Who Pleaded Guilty to FCPA Violations Since 2001.”

The chart is misleading.

Nowhere in the chart does it indicate, nor in the brief referencing the chart is it noted, that the sentences are not just for FCPA violations, but, in many cases, sentences based on other violations of law as well.

For instance, in the longest sentence on the DOJ’s chart – Charles Jumet (87 months) nowhere is it noted that the “FCPA” portion of the sentence was actually lower. Jumet pleaded guilty to two counts – conspiracy to violate the FCPA and making false statements to federal agents. The false statements portion of his sentence was 20 months. Thus, Jumet’s “FCPA” sentence was 60 months – not 87 months as suggested by the DOJ’s chart.

An Nguyen

Sentence: 9 months, 3 years of supervised release (notwithstanding that, per the DOJ’s sentencing memorandum, Nguyen was on probation at the time of his offense)

DOJ Recommendation: 87-108 months

In its sentencing memorandum the DOJ stated that Nguyen “paid bribes to multiple Vietnamese government officials in exchange for contracts for his family’s business.” Elsewhere in the memo, the DOJ states that “Nguyen’s bribery was particularly egregious.” In connection with its decision not to seek a sentencing enhancement for an offense involving a public official in a high-level decision-making or sensitive position, the DOJ noted that “Nguyen was unaware of the nature, position, or role of the specific officials who received the bribe payments.”

Kim Nguyen

Sentence: 2 years probation

DOJ Recommendation: 70-87 months (even after the DOJ’s downward departure recommendation)

The DOJ requested a Section 5K1.1 downward departure. The DOJ noted that “even though Kim Nguyen did not begin providing information to the government until shortly before trial” this information nevertheless “appeared to play a role in her siblings’ decisions to plead guilty.” The DOJ noted that “Nguyen met with the government on approximately two occasions to explain the business practices and financial records of Nexus Technologies” and “explained various entries in the Nexus books which allowed the government accurately to calculate the total amount of bribes paid by the defendants …”

In its sentencing memo, the DOJ stated that “Nguyen played a critical role in this conspiracy, as she was the person responsible for handling the finances and maintaining the books and records of Nexus.” The DOJ stated that Nguyen “funneled the bribe payments to an off-shore company controlled by Nexus, which then forwarded the bribe payments to the Vietnamese officers, and it was Kim Nguyen who falsified the associated wire-transfer documents to cover their tracks.” The DOJ further asserted that e-mail correspondence “makes it very clear that Kim Nguyen knew exactly what she was doing, and why.” As with An Nguyen, the DOJ did not seek a sentencing enhancement for Kim Nguyen and noted that “Kim Nguyen was unaware of the nature, position, or role of the specific officials who received the bribe payments.”

Joseph Lukas

Sentence: 2 years probation

DOJ Recommendation: 37-46 months (even after the DOJ’s downward departure recommendation)

The DOJ requested a Section 5K1.1 downward departure. The DOJ noted that Lukas “met with the government on approximately seven separate occasions over the course of approximately 1.5 years and explained everything he knew about his co-defendants, their criminal conduct, their personal histories, and their business records.” According to the DOJ, “Lukas also created spreadsheets of information for the government, voluntarily turned over his computer for government analysis, and spent hours upon hours poring through documents in order to explain the business practices of Nexus Technologies and the Nguyen siblings.”

In its sentencing memorandum, the DOJ stated that “Lukas helped Nexus Technologies pay bribes to multiple Vietnamese government officials in exchange for contracts.” According to the DOJ, “Lukas was responsible for vendor relations and negotiations in the United States (which included identifying vendors who could supply the requested goods at low enough prices to allow the bribe payments.)”.

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As to the Greens’ sentence, the DOJ noted in footnote 8 of Nam Nguyen’s sentencing memo that the “DOJ is considering appealing the sentence in that case.”