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Game Over – DOJ Moves To Dismiss Africa Sting Cases

By on February 21, 2012 in Africa Sting, Amaro Goncalves, Andrew Bigelow, David Painter, FCPA Trials, Helmie Ashiblie, Israel Weisler, Jeana Mushriqui, John Benson Wier, John Mushriqui, Lee Allen Tolleson, Lee Wares, Mark Frederick Morales, Michael Sacks, Ofer Paz, Pankesh Patel, Saul Mishkin, Yochanan Cohen

In a filing this morning (see here), the DOJ has moved “to dismiss with prejudice the Superseding Indictment, and all underlying indictments, against the remaining defendants who are pending trial.”

The filing states as follows.  “The government has carefully considered (1) the outcomes of the first two trials in which, after extensive deliberations, the juries remained hung as to seven defendants and acquitted two defendants, and one defendant was acquitted on the sole charge against him pursuant to Fed. R. Crim. P. 29; (2) the impact of certain evidentiary and other legal rulings in the first two trials and the implications of those rulings for future trials, including with respect to Rule 404(b) and other knowledge and intent evidence the government proposed to introduce; and (3) the substantial governmental resources, as well as judicial, defense, and jury resources, that would be necessary to proceed with another four or more trials, given that the first two trials combined lasted approximately six months. In light of all of the foregoing, the government respectfully submits that continued prosecution of this case is not warranted under the circumstances.”

Today’s request for dismissal comes two weeks after the jury foreman in the second Africa Sting trial wrote this guest post on this site.

Writer’s Cramp At The DOJ?

By on February 3, 2012 in Africa Sting, DOJ Enforcement Action, Individual Enforcement Action, Jeana Mushriqui, John Gregory Godsey, John Joseph O’Shea, John Mushriqui, Keith Lindsey, Lindsey Manufacturing, Mark Frederick Morales, R. Patrick Caldwell, Schnitzer Steel, Si Chan Wooh, Stephen Gerard Giordanella, Steve Lee

This is the second time I have written about this issue (see here for the first).  This time, the examples are more numerous and more significant.

The DOJ has stated (here) that its FCPA website (here) includes documents related to more than 140 FCPA prosecutions including “charging documents, plea agreements, deferred prosecution and non-prosecution agreements, press releases,and relevant pleadings and orders.”  To be sure, the DOJ has a nice (and much improved upon) FCPA website.  However, as demonstrated below, if one’s objective is to be informed of all FCPA developments (not just those that cast the DOJ in a favorable light), there are a number of websites, this one included, that highlight such developments, but the DOJ’s website is not one of them.

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In January 2010, the DOJ issued this release announcing the Africa Sting charges and it also held a press conference to discuss the charges.  In July 2011, Judge Richard Leon declared a mistrial in the first Africa Sting case (see here for the prior post).  However, there was no DOJ press release announcing this development and if your only source of information was the DOJ’s FCPA website you would not know that this development occured because there is no mention of it.

In 2007 Si Chan Wooh, an employee of SSI International, a wholly-owned subsidiary of Schnitzer Steel, was criminally charged (see here).  The DOJ issued a release (here) anouncing the charges and related guilty plea.  However last year, as reported in this Wall Street Journal Corruption Currents story, “the Justice Department informed Wooh’s counsel that a Federal Bureau of Investigation agent assigned to the investigation of Schnitzer and its employees had written a letter to high-ranking prosecutor in Washington saying Wooh should not have been charged in connection with the case.”  In October 2011, in this filing the DOJ moved to dismiss the case “out of prosecutorial discretion in the interests of justice and the efficient use of government resources.”  There was no DOJ press release announcing this development and if your only source of information was the DOJ’s website you would not know that this development occured because there is no mention of it.

In May 2011, the DOJ issued this same day release when Lindsey Manufacturing and its executives Keith Lindsey and Steve Lee were found guilty of FCPA offenses after a jury trial.  However, in November 2011, Judge Howard Matz vacated the FCPA convictions of Lindsey Manufacturing and its executives and dismissed the indictment (see here for the prior post).  Again nothing from the DOJ, no press release, and no mention of this development on its website.

In December 2011, during the second Africa Sting case, Judge Richard Leon, at the close of the DOJ’s case, dismissed a conspiracy charge as to all defendants (see here for the prior post).  Because this was the only charge Stephen Giordanella faced, he was exonerated.  However, if your only source of FCPA knowledge was the DOJ’s website, you would not know this because there is nothing there as to this development.

In November 2009, the DOJ issued this release when John Jospeh O’Shea was arrested and charged with FCPA and related offenses.  However, on January 16th, Judge Lynn Hughes, after the DOJ’s case, dismissed the FCPA charges against O’Shea (see here for the prior post).  However, if your only source of FCPA knowledge was the DOJ’s website, you would not know this because the DOJ did not issue a release and there is nothing on its website regarding this development.  [Someone was staffing the DOJ press office at this time because approximately 18 hours later, the DOJ announced (here) a $55 million FCPA enforcement action against Marubeni Corporation of Japan.]

Returning to the second Africa Sting trial, earlier this week, Patrick Caldwell and John Godsey were found not guilty by the jury (see here for the prior post).  The next day, Judge Leon declared a mistrial as the remaining defendants –  John Mushriqui, Jeana Mushriqui and Marc Morales (see here for the prior post).  Again, nothing from the DOJ as to these developments.

President Obama has championed transparency and open government.  In this release, President Obama stated as follows.  “Transparency promotes accountability and provides information for citizens about what their Government is doing.  Information maintained by the Federal Government is a national asset. My Administration will take appropriate action, consistent with law and policy, to disclose information rapidly in forms that the public can readily find and use.”

Consistent with President Obama’s directive, the DOJ’s website ought to be improved and ought to keep citizens informed of all FCPA developments – not just those that cast the DOJ in a favorable light.

Judge Leon Declares Mistrial As To Remaining Africa Sting Defendants

By on January 31, 2012 in Africa Sting, FCPA Trials, Jeana Mushriqui, John Mushriqui, Mark Frederick Morales

Yesterday’s post (here) covered the not guilty verdicts of Patrick Caldwell and Jonathan Godsey in the second Africa Sting trial.  The post noted that the jury had yet to reach a verdict as to John Mushriqui, Jeana Mushriqui and Mark Morales, but that Judge Leon was prepared to declare a mistrial today if the jury remained hung.

A knowledgeable source indicates that Judge Leon has declared a mistrial.  According to this report from the website Main Justice, the jury foreman indicated in court that the jury vote for the Mushriquis was 9 not guilty, 3 guilty; for Morales 10 not guilty, 2 guilty.

Africa Sting – Caldwell and Godsey Not Guilty – Jury Still Out As To Other Defendants

By on January 30, 2012 in Africa Sting, FCPA Trials, Jeana Mushriqui, John Gregory Godsey, John Mushriqui, Mark Frederick Morales, R. Patrick Caldwell

On January 19, 2010, the DOJ announced (here) a new type of FCPA enforcement action.  While not the first use of undercover techniques in an FCPA enforcement action (see here), the new type of case was certainly the largest and most dramatic use of pro-active, undercover investigative techniques in the FCPA’s history.

Twenty-two executives and employees of companies in the military and law enforcement products industry were criminally indicted “for engaging in schemes to bribe foreign government officials to obtain and retain business.” However, there was no real foreign official – just FBI agents posing as representatives of a Gabon foreign official – and the case was manufactured by the government with the assistance of Richard Bistrong (an individual who previously pleaded guilty to separate FCPA violations – see here).

In announcing the indictments, Assistant Attorney General Lanny Breuer called the action a “turning point.”

The cases were assigned to Judge Richard Leon (U.S. District Court for the District of Columbia). Given the number of defendants indicted, the cases were  segregated into smaller units for trial.

The first trial, which started in May 2011, involved  Andrew Bigelow, Pankesh Patel, John Benson Weir, and Lee Allen Tolleson. As
highlighted in this  prior post, at the close of the DOJ’s case, Judge Leon dismissed a substantive FCPA count as to Patel, a substantive FCPA count as to Tolleson, and dismissed a  money laundering count as to all defendants.  In July 2011, Judge Leon declared a mistrial as to all remaining counts of the DOJ’s “turning point” prosecution.  (See here for the prior post).

The second (of four) trials in this manufactured case began in September 2011 (see here for the prior post) and involved the following defendants:  John Mushriqui, Jeana Mushriqui, Patrick Caldwell, Stephen Giordanella, John Godsey, and Mark Morales.  As noted in this prior post, in late December 2011, Judge Leon ruled on defendants’ Rule 29 acquittal motions and dismissed the conspiracy charge against all defendants.  Because Giordanella faced only a conspiracy charge, he was exonerated and Judge Leon stated as follows:  “Mr. Giordanella, you are excused […] you are free to go.”

A knowledgeable source confirms that the jury has returned not guilty verdicts on all counts as to Caldwell and Godsey.  According to the source, the jury has yet to reach a verdict as to the Mushriqui’s and Morales.  According to this report from Main Justice, if the jury remains hung as to the Mushriqui’s and Morales, Judge Leon has indicated he will declare a mistrial tomorrow.

Africa Sting Development – “Mr. Giordanella, You Are Excused … You Are Free To Go”

By on December 22, 2011 in Africa Sting, FCPA Jurisprudence, FCPA Trials, Jeana Mushriqui, John Gregory Godsey, John Mushriqui, Mark Frederick Morales, R. Patrick Caldwell, Stephen Gerard Giordanella

In the first Africa Sting trial this past summer, Judge Richard Leon granted defendant Pankesh Patel’s Rule 29 acquittal motion at the end of the DOJ’s case as to a substantive FCPA charge.  (See here for the prior post).  Judge Leon also dismissed a substantive FCPA violation as to defendant Lee Allen Tolleson and dismissed a money laundering charge as to all four defendants (Patel, Tolleson, Andrew Bigelow, and John Benson Weir).  Thereafter, Judge Leon declared a mistrial as to the remaining charges against the defendants.  (See here for the prior post).  In short, the DOJ’s “turning point” prosecution did not go so well.

Undeterred, the DOJ plowed ahead with the second (of four) trials in its manufactured case against defendants John Mushriqui, Jeana Mushriqui, Patrick Caldwell, Stephen Giordanella, John Godsey, and Mark Morales.  Opening arguments were held in September – see here for the prior post.  The DOJ’s case is not going so well.

Earlier today, Judge Leon ruled on defendants’ Rule 29 acquittal motions.  In a significant rebuke to the DOJ’s conspiracy charge against all defendants, Judge Leon granted defendants’ motion.  Judge Leon stated as follows.  “[V]iewing the evidence in the light most favorable to the Government, the Court does not believe the Government has produced sufficient evidence to enable a rational trier of fact  to conclude beyond a reasonable doubt that each of these six defendants participated in the overarching conspiracy charged in the superseding indictment in this case.

The only charge against Giordanella was the conspiracy charge, thus Judge Leon stated as follows.  “Mr. Giordanella, you are excused […] you are free to go.”  Giordanella was represented by Paul Calli and Stephen Bronis of Carlton Fields (see here and here).  In a firm release, Bronis stated as follows.  “The Court found that government had not presented sufficient evidence to establish the existence of the charged crime.  We are grateful the Court made the correct and just ruling.  Mr. Giordanella is grateful to be exonerated, and can now begin to put this unnecessary and unfortunate experience behind him.”  Calli stated as follows.  “Mr. Giordanella was innocent and should never have been accused in the conspiracy.  In many respects, Mr. Giordanella’s indictment in the DOJ’s fake Gabon sting operation conspiracy represents a prosecution at its most dangerous.”

In addition, Judge Leon granted acquittal motions as to substantive FCPA charges against defendants John and Jeana Mushriqui (counts 5 and 6 of the superseding indictment – see here).  Judge Leon stated as follows.  “Neither John nor Jeana Mushriqui had, according to the evidence in this case, the requisite knowledge of the corrupt nature of the Gabon deal that would be necessary with regard to the events on May 22nd of ’09 when Ms. Mushriqui had traveled to Washington, D.C. for the pitch meeting and when a call was placed by Mr. Bistrong to Ms. Mushriqui during that meeting to discuss the deal when he was in the Middle East.”

The Mushriqui’s and the other remaining defendants still face certain other FCPA substantive charges and the defense began presenting its case this afternoon.

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