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Judge Rules On The Intersection Of Corporate DPA Provisions And Individual Defendant Rights

Judicial Decision

This recent post summarized the decision by a judge to deny Roger Ng’s (a former Goldman Sachs executive) motion to dismiss including how the judge concluded that the FCPA’s internal controls provisions can be implicated even in transactions in which an issuer does not use its own assets to pay an alleged bribe.

In his motion to dismiss, Ng also pointed to certain aspects of the deferred prosecution agreement between the DOJ and Goldman (see here in for the prior post) as compromising his defense. However, in her decision, U.S. District Court Judge Margo Brodie (E.D.N.Y) also denied Ng’s motion on these grounds.

Given that the motion to dismiss stage is deferential to the prosecution, Judge Brodie’s decision on these issues was not a huge surprise.

Nevertheless, these aspects of Judge Brodie’s decision are worthy of exploring because various aspects of corporate DPAs (or NPAs) in the Foreign Corrupt Practices Act context are rarely litigated because: (1) the DOJ does not charge individuals in connection with approximately 75% of corporate actions; and (2) even in those instances in which the DOJ does charge an individual in connection with a corporate action, the individual frequently pleads guilty without mounting a defense.

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FCPA Flash Podcast – A Conversation With Douglas Zolkind Regarding DOJ FCPA Issues

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The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash podcast episode is a conversation with Douglas Zolkind. Zolkind recently joined the New York office of Debevoise & Plimpton after serving as an Assistant U.S. Attorney for the Southern District of New York. Among the cases he prosecuted were FCPA trial convictions involving Ng Lap Seng and Patrick Ho. During the podcast, Zolkind: (i) shares his experiences trying FCPA cases including the difference between “FCPA violations” and “FCPA violations that can be proven at trial”; (ii) discusses underappreciated aspects of DOJ FCPA enforcement; (iii) opines whether the government is vulnerable on some of its FCPA enforcement theories; and (iv) suggests a change to FCPA enforcement.

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Ng Files Motion To Dismiss

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As highlighted in this prior post, in November 2018 the DOJ criminally charged former Goldman Sachs executives Tim Leissner and Ng Chong Hwa (Roger Ng) (along with Low Taek Jho – Jho Low) with Foreign Corrupt Practices Act offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

Leissner pleaded guilty and in October Goldman Sachs resolved a net $1.66 billion FCPA enforcement action based on the same conduct. (See additional posts here and here).

Ng is mounting a defense and recently filed this motion to dismiss (an entire section of which is redacted). As highlighted below, Ng argues that the DOJ’s case against him suffers from several factual errors and legal deficiencies. Ng also suggests that the DOJ scripted Leissner’s guilty plea and that Goldman’s DPA was entered into for reasons of risk aversion and otherwise compromises his ability to defend himself.

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Judge Orders New Trial For Baptiste And Boncy Based On Ineffective Assistance Of Counsel

Judicial Decision

As highlighted in this previous post, in 2017 (in connection with an undercover string) the DOJ unsealed criminal charges against Joseph Baptiste (a retired U.S. Army Colonel, practicing dentist, and founder / president of a Maryland-based Haitian focused non-profit) for alleged Haitian bribery. As highlighted in this previous post, in 2018 the DOJ added criminal charges against Roger Boncy in connection with the same core conduct.

Unlike most individual FCPA defendants, Baptiste and Boncy put the DOJ to its burden of proof. As highlighted in this previous post, in June 2019, after a two-week jury trial, a federal jury in Boston found Baptiste guilty of one count of violating the Travel Act and one count of conspiracy to commit money laundering and Boncy guilty of one count of conspiracy to violate the FCPA and the Travel Act. Thereafter, in post-trial motions the defendants sought an acquittal or a new trial based on ineffective assistance of counsel. (See here).

Earlier today, in this decision, U.S. District Court Judge Allison Burroughs (D. Mass.) granted Baptiste and Boncy a new trial.

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Judicially Ordered Acquittals In FCPA Trials

Judicial Decision

As highlighted in this post, recently a federal trial court judge granted Lawrence Hoskins’s post-trial motion for acquittal on all FCPA charges.

Obtaining a judicially ordered acquittal (whether post-trial as in the Hoskins matter or at some other stage of a trial such as after the prosecution’s case in chief) rarely happens given the high burden a defendant has in seeking such an extraordinary remedy.

Yet, as highlighted in this post, judicially ordered acquittals have happened in several other individual FCPA prosecutions. These occurrences are notable given the relative infrequency of FCPA trials.

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