Last week, the U.S. Attorney in the Northern District of Illinois announced (see here for the release) as follows.
“Five individuals and two domestic honey processing companies have been charged with federal crimes in connection with a nationwide investigation of illegal importations of honey from China that was mislabeled as coming from other countries to avoid antidumping duties or was adulterated with antibiotics not approved for use in honey. Altogether, the seven defendants allegedly avoided antidumping duties totaling more than $180 million.”
Assistant U.S. Attorney Andrew Boutros (who serves in his individual capacity as the co-chair of the ABA’s Global Anti-Corruption Task Force and who lectures at the University of Chicago Law School) lead the DOJ investigation and prosecution.
The charges did not relate to the Foreign Corrupt Practices Act and the enforcement action really had nothing to do with the FCPA. However, one of the defendants criminally charged was Douglas Murphy, the former executive of American Rice Inc., who along with co-defendant David Kay, put the DOJ to its burden of proof in one of the most notable FCPA cases of all-time. The case led to several judicial decisions, including U.S. v. Kay, 359 F.3d 738 (5th Cir. 2004) concerning the FCPA’s obtain or retain business element. Coincidentally, the Kay and Murphy FCPA case was also the focus of this post last week.
In last week’s action, Murphy pleaded guilty to violating the federal Food, Drug, and Cosmetic Act and according to the DOJ’s release he will receive a six month prison sentence and pay an approximate $26,000 fine. Murphy was the Director of Sales at Honey Holding (a large industrial honey supplier based in Texas) between 2003 and 2008. Even though Murphy was convicted of FCPA charges in 2004, he was free on bond pending his appeal, and he did not report to prison until 2008.
The conduct at issue in the last week’s honey case occurred in 2006 and the plea agreement states as follows. “At the time of the offense, Murphy was a defendant [in the FCPA case] and was on release from custody pending appeal pursuant to an order by the U.S. District Court for the Southern District of Texas” and he received a sentencing level enhancement for this reason.
Murphy was released from prison on his FCPA sentence in the summer of 2012, but he is headed back as a result of last week’s plea. Although it could have been worse. Both Murphy and Honey Holding were cited by the DOJ for their cooperation and the DOJ release notes that Honey Holding “allow[ed] an undercover law enforcement agent to assume the role of its director of procurement in an undercover capacity …”.
Markus Funk (Perkins Coie and co-chair of the ABA’s Global Anti-Corruption Task Force) observes in this Law360 article as follows. “This appears to be the first time in U.S. history in which the government has brought new charges against a previously convicted FCPA defendant.”