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Checking In On The DOJ’s Hoskins Appeal

Judicial Decision

In 2019 Lawrence Hoskins was found guilty of FCPA and related charges in a long-running enforcement action (the FCPA conduct Hoskins was found guilty of allegedly occurred between 2002 and 2004).

As highlighted in this prior post, in early 2020 the trial court judge granted Hoskins’s motion of acquittal on all FCPA charges (the issue was highly factual and generally focused on whether Hoskins was an agent of a “domestic concern.”).

Rather than let go of this enforcement action (in which the DOJ suffered numerous other defeats including this 2018 pre-trial Second Circuit decision regarding jurisdictional issues), after the post-trial acquittal the DOJ filed another Second Circuit appeal (see here) in which it framed the issues as follows:

“Whether, viewing the evidence in a light most favorable to the guilty verdict, a rational jury could have found that the defendant, a senior executive in a corporate support function of multinational holding company Alstom S.A., was an agent of a Connecticut-based Alstom business, Alstom Power Inc. (“API”), in the course of his assisting API to secure a power plant contract in Indonesia, including by hiring consultants to funnel bribes to Indonesian officials, where the defendant repeatedly followed API’s instructions and API was in charge of all facets of the project.”

As highlighted here, Hoskins filed a brief in response and also cross-appealed certain issues. As to the DOJ’s appeal challenging the trial court’s decision to acquit Hoskins of all FCPA charges on the grounds that the trial evidence utterly failed to prove he acted as an agent of a domestic concern, the brief stated in summary fashion:

“A square peg in a round hole. That idiom has plagued the government’s FCPA theory from the outset. Despite heroic efforts to contort law, force facts and twist logic, Mr. Hoskins was not an agent of a domestic concern. Not unlike Cinderella’s wicked stepsisters, the government has tried desperately to find a fit.

The government first tried to proceed on a deficient theory by arguing that Mr. Hoskins could be liable under principles of conspiratorial and accessorial liability even if he was not within any category of individuals expressly covered by the FCPA. That effort was rebuffed, first by the district court and then by this Court. Undeterred, the government attempted to prove that Mr. Hoskins was an agent of API. But, in a thoughtful, well-reasoned Rule 29 decision, the district court properly found that the government failed to meet its burden. And so, for the second time in this misguided prosecution, the government appears before this Court as the appellant, simultaneously trying to shrink the facts to fit the law and expand the law to fit the facts. The hard reality for the government is simply this: The law and facts are clear, and when that law is applied to the facts, the shoe just does not fit.

The internal inconsistencies in the government’s allegations betray this mismatch. The operative Indictment describes Mr. Hoskins’s “responsibilities” as “approving the selection of, and authorizing payments to, consultants” and, further, as “includ[ing] oversight of the hiring of consultants in connection with Alstom’s and Alstom’s subsidiaries’ efforts to obtain contracts . . . including the Tarahan Project.” As if asserting that day equals night, the Indictment alleges that it is that conduct that renders Mr. Hoskins an agent of API. In pretrial litigation, the government described Mr. Hoskins as “a foreign national leader of a U.S.- based bribery scheme.”  However, following its unsuccessful interlocutory appeal, the government shifted gears at trial, casting Mr. Hoskins as subservient to API and therefore its agent. Similarly, in opposing Mr. Hoskins’s post-trial Rule 29 motion, the government proclaimed that Mr. Hoskins served as a mere corporate rubber stamp whose “approval function was rote at best,” and that he “actually exercised no meaningful oversight.” At sentencing, the government redirected once again, recharacterizing Mr. Hoskins as part of Alstom’s “executive level leadership,” and highlighting his responsibility to “enforce Alstom corporate policies . . . .”

In this second appeal, day has again become night. The government asserts that “API . . . had ultimate decision-making authority over all aspects of the retention of consultants” and that Mr. Hoskins mainly “performed support functions and services for and on behalf of . . . API.”

Putting aside the government’s posturing, however, it is readily apparent that Mr. Hoskins was never API’s agent. Alstom’s corporate records and the uniform testimony of the government’s cooperating witnesses demonstrated that Mr. Hoskins worked for Alstom’s International Network (“IN”), a corporate division based in Alstom’s Paris headquarters, which was in no way subservient to API. Within IN, Mr. Hoskins was responsible for, inter alia, coordinating business-development efforts in his large region and implementing Alstom’s strategy. Most importantly, Mr. Hoskins also had to determine whether to approve requests by business units, like API, to hire external consultants like those at issue in this case. This authority derived from Mr. Hoskins’s duties and responsibilities as an IN executive, and API had no ability to override, revoke or terminate that authority. Thus, API had no right to control Mr. Hoskins’s actions in connection with the retention of consultants, and Mr. Hoskins did not agree to act—nor did he act—as API’s agent.

The long, tortured history of this case exposes the distorted prism through which the government seeks to present the evidence. When Mr. Hoskins was indicted, the government never expected to have to prove that he was an agent of API. After the government’s original defective charging theory was rejected, it tried to reverse course by turning Mr. Hoskins into someone else entirely, who bore little resemblance to the senior Alstom official described in its original allegations. At the same time, in an effort to blunt the impact of this Court’s prior ruling, the government has advanced an ever-expanding agency definition, one that would make “agent” a synonym for “conspirator,” thereby resuscitating the erroneous interpretation of the FCPA that this Court’s prior decision properly foreclosed.

The district court rightly concluded, consistent with the trial evidence and the well-settled law of agency, that Mr. Hoskins was not API’s agent. For the reasons that follow, the district court’s ruling should be affirmed.”

Regarding the cross-appeal, the brief framed the issues as follows:

“First, whether Mr. Hoskins’s Speedy Trial Act and Sixth Amendment rights were violated by the extraordinary delay between his indictment in July 2013 and eventual trial in October 2019, particularly in light of the fact that Mr. Hoskins’s alleged involvement in the charged offenses ceased in 2004.

Second, whether the district court gave an erroneous jury instruction with respect to Mr. Hoskins’s withdrawal defense by failing to instruct the jury that resignation from the business enterprise through which the charged crimes were committed could constitute withdrawal if, following that resignation, Mr. Hoskins severed all contact with his alleged co-conspirators, performed no further acts in furtherance of the offense and received no benefit from the offense.

Third, whether the government failed to establish venue in the District of Connecticut for Counts Nine, Ten and Twelve, the substantive money-laundering offenses, each of which involved discrete transfers of funds from Maryland to Indonesia in violation of 18 U.S.C. 1956(a)(2)(A).”

The Second Circuit appeal also attracted interest from the International Academy of Financial Crime Litigators and the National Association of Criminal Defense Lawyers as both organizations filed amicus briefs.

Recently the DOJ filed this brief which in summary fashion states as follows:

“As the government explained in its opening brief, a rational jury could have found beyond a reasonable doubt that Hoskins was API’s agent on the Tarahan Project. In response, Hoskins first distorts the standard of review, which appropriately leaves choices among logical inferences to the jury. Applying that distorted standard, Hoskins—like the district court—impermissibly substitutes his own inferences for those of the jury. Specifically, Hoskins makes arguments about his alleged “oversight” role at Alstom that were not relied upon by the district court and could reasonably have been rejected by the jury. Hoskins also misapplies precedent from this Court and the Supreme Court. Finally, the district court’s conditional new trial order violated this Court’s standard of review, and Hoskins points to no “evidentiary or instructional error” that would necessitate a new trial.

Amici’s contention that the district court improperly applied the common-law definition of “agent” to the FCPA was waived by Hoskins below and should not be considered here. On the merits, amici’s proposal for a narrower definition of “agent” is contrary to the settled meaning of the term, relies on an incorrect view of the legislative history, creates a fair notice issue, and could put the United States in further violation of the OECD Convention.

The district court correctly denied Hoskins’s motion to dismiss based on the STA and Speedy Trial Clause. First, Hoskins’s sole argument under the STA, that the delay following this Court’s interlocutory appeal mandate should not have been excluded from the clock, fails. Hoskins sought the delay for reasons cognizable under the STA, including trial preparation and continuity of counsel, the district court clearly granted Hoskins’s request for those reasons, and the court put its ends-of-justice findings on the record before ruling on Hoskins’s motion to dismiss. Second, the district court did not abuse its discretion in denying Hoskins’s Sixth Amendment claim, reasoning that Hoskins had never before asserted an interest in a speedy trial and that he was only minimally prejudiced by the post-indictment delay.

The district court properly instructed the jury on withdrawal, consistent with long-established precedent. In particular, the district court delivered an appropriately modified version of Hoskins’s requested business-resignation charge; included a non-exclusive list of examples of affirmative acts of withdrawal drawn directly from precedent; and correctly delivered a charge that Hoskins may not simply walk away from events he set in motion while an active conspirator. Moreover, even if there were errors, they were harmless in light of the overwhelming evidence and did not affect Hoskins’s convictions on the substantive offenses.

Viewing the evidence in a light most favorable to the guilty verdicts, there was sufficient evidence of venue in Connecticut for the substantive money laundering convictions. Each of those counts charged a leg of a continuous transfer of money from Connecticut, through Maryland, to Indonesia, in accord with the conspirators’ plan to pass bribes from API to Indonesian official Emir Moeis through consultant Pirooz Sharafi. Hoskins’s response misstates the law related to continuing transactions and ignores the overwhelming evidence of the conspirators’ plan.”

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