The Case That Just Keeps On Giving
Last week, the Haiti Teleco case netted additional defendants as the DOJ announced (here) a superseding indictment in the never-ending enforcement action. Named in the superseding indictment (here) are:
Cinergy Telecommunications Inc. (a privately-held telecommunications company incorporated in Florida, charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering);
Washington Vasconez Cruz (the president of Cinergy, charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering);
Amadeus Richers (a former director of Cinergy, charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering);
Patrick Joseph (a former general director for telecommunications at Haiti Teleco and thus a “foreign official” according to the DOJ, charged with one count of conspiracy to commit money laundering);
Jean Rene Duperval (a former director of international relations for telecommunications at Haiti Teleco and thus a “foreign official” according to the DOJ, charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering); and
Marguerite Grandison (the former president of Telecom Consulting Services Corp., and Duperval’s sister, charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering.
Duperval and Grandison were previously charged in the case in December 2009 (see here).
With this latest development, the Haiti Teleco case has become, other than the manufactured Africa Sting enforcement action, the largest FCPA enforcement action in history – in terms of number of defendants – 12. In addition to those listed above, the following individuals were also charged: Antonio Perez, Joel Esquenazi, Juan Diaz, Robert Antoine, Jean Fourcand, and Carlos Rodriguez.
The Haiti Teleco case stands in stark contrast to many corporate FCPA enforcement actions (enforcement actions that sometimes involve tens or hundreds of millions of dollars in bribe payments) that yield no individual enforcement actions. See here for the prior post discussing the numbers from 2010 and thus far this year.
All bribery and corruption of course is bad, but does approximately $1 million in alleged bribe payments in the Haiti Teleco case justify the largest real FCPA enforcement action in history?
I previously observed (here) in connection with the Haiti Teleco case that often the DOJ resolves seemingly clear-cut instances of corporate bribery and corruption involving tens or hundreds of millions of dollars in bribe payments (per the government’s own evidence) without FCPA anti-bribery charges and without charging any corporate employees. In other cases, often relatively minor ones, the DOJ comes out with guns-a-blazing.
To call it inconsistent law enforcement is an understatement.
Indicting a “Foreign Official”
Yesterday, the DOJ announced (see here) the unsealing of an indictment (see here) against Joel Esquenazi, Carlos Rodriguez, and Marguerite Grandison which charges (among other things) conspiracy to violate the FCPA and substantive FCPA violations for an alleged scheme to bribe two former employees of Haiti Teleco, the alleged “state-owned national telecommunications company.”
Esquenazi and Rodriguez are former executives of a privately owned, Florida-based telecommunications company and Grandison was the President of Telecom Consulting Services Corp., a Florida based company which served as an intermediary.
The unsealed indictment is the latest chapter in this matter; in May 2009, the DOJ announced (see here) the guilty pleas of Juan Diaz and Antonio Perez in connection with the same scheme.
This matter is also yet another example of an FCPA enforcement action in which the “foreign official” is an employee of an alleged state-owned or state-controlled entity.
That, however, is not why this enforcement action is noteworthy.
It is noteworthy because DOJ also indicted Robert Antoine and Jean Rene Duperval – the alleged “foreign officials.” According to the indictment, Antoine and Duperval both served as the “Director of International Relations of Haiti Teleco” and were responsible for negotiating contracts with international telecommunications companies on behalf of Haiti Teleco.
Of course, the charges were not FCPA charges, because the FCPA only covers “bribe-payers” not “bribe-takers” (see here, here, for prior posts on this subject).
Rather the charges against Antoine and Duperval were money laundering conspiracy and/or substantive money laundering charges.
According to the DOJ release, Antoine is from “Miami and Haiti” and Duperval is from “Miramar, Fla. and Haiti.” Further, according to the indictment, both individuals had bank accounts in the U.S. and these accounts were used in connection with the bribery scheme. (I wonder if Washington Mutual, Wachovia, or Miami Federal Credit Union were aware that Haitian “foreign officials” were among its customers!)
To my knowledge this is the first time “foreign officials” have been specifically charged as defendants in connection with an FCPA enforcement action. This indictment of “foreign officials” comes on the heels of AG Holder’s recent speech (see here) in which he stated that the U.S. government was committed to recovering funds obtained by “foreign officials” through bribery.