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The Number Of FCPA Trials This Fall Is A Coincidence

Nowadays, it seems, things just can’t happen. Rather when things happen, it must be a sign of something else, causation is assumed, and a supposed new trend with big picture implications is unfolding.

For instance, this Fall there are four Foreign Corrupt Practices Act individual trials scheduled.

This is unusual.

But as highlighted below, it is likely a coincidence and not, as some commentators stated in this Law360 article [1], a sign that the DOJ’s FCPA Unit is “coming into its own” or that an “increase in prosecutors and agents is behind the uptick in cases.”

Hoskins

As highlighted here [2], in July 2013 the DOJ announced criminal charges against Lawrence Hoskins (a U.K. national). The trial was originally scheduled for July 2014. Then pushed back to June 2015. Then pushed back to November 2015. Then pushed back to April 2016. Then delayed as the DOJ sought an interlocutory appeal to the Second Circuit. As highlighted here [3], the Second Circuit issued its decision in August 2018 – approximately 1.5 years after oral argument in the case. The trial was then scheduled for March 2019. Then pushed back to September 2019. And now will occur in October 2019.

Lambert

As highlighted here [4], in January 2018 the DOJ announced criminal charges against Mark Lambert concerning a Russian nuclear bribery scheme. The DOJ began charging individuals in connection with the same scheme in mid-2015 (see here [5]).

[6]

Chatburn and Cevallos

As highlighted here [7], in April 2018 Frank Roberto Chatburn Ripalda (a dual United States and Ecuadorian citizen) was criminally charged for conspiring with others for making corrupt payments to PetroEcuador officials in order to obtain and retain contracts for Galileo (described as an Ecuadorian company that provided services in the oil and gas industry) from PetroEcuador. As highlighted here [8], in May 2019 Armengol Alfonso Cevallas Diaz (an Ecuadorian citizen) was criminally charged in connection with the same underlying bribery scheme.

In short, the four FCPA trials that are scheduled for this Fall are not evidence of some big-picture trend, but rather the mere coincidence of certain long-standing FCPA charges and/or inquiries finally reaching the next step.

Moreover, the Chatburn and Cevallos matters concern the same underlying conduct and are further proof of the so-called clustering phenomenon that has been discussed numerous times on these pages (see here [9] for instance). In other words, approximately 80% of corporate FCPA enforcement actions in the modern era lack any individual charges against individuals and just a few discreet instances of alleged bribery yield an inordinate amount of FCPA enforcement activity against individuals. These cases have typically involved [10] small privately held companies doing business in Haiti and Venezuela (and with the Chatburn and Cevallas matters – now Ecuador).

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