Time will tell of course, but query whether the recently enacted Foreign Extortion Prevention Act (FEPA) (a law which seeks to capture conduct by corrupt foreign officials) was even needed.
As has been discussed on these pages over the last several years when various versions of FEPA were introduced in Congress, the Department of Justice already has several criminal statutes available to prosecute alleged “foreign officials” who receive bribes and has been prosecuting such cases for a long time. Prosecutors also have civil statutes available to them in which the U.S. can seek forfeiture of property located in the U.S. owned by foreign officials who purchased property, in whole or in part, with the proceeds of corruption.
As to the later, the latest example occurred earlier this week as the DOJ announced unsealing of “a civil complaint seeking to forfeit two luxury apartments located in New York City at 21 East 61st Street and 230 West 56th Street, purchased for $14 million” “with the proceeds of unlawfully awarded Mongolian mining contracts, at the direction and for the benefit of then-Mongolian Prime Minister Sukhbaatar Batbold [pictured] and his family.”
As stated in the DOJ release:
“The civil forfeiture complaint alleges that while Batbold was Prime Minister of Mongolia, Catrison, an entity he owned through trusted intermediaries, was awarded a $68 million mining contract. Prior to being awarded that contract, Catrison had no operational history, no mining expertise, and no financial or logistical infrastructure to execute commodity sales, and its sole director was a former linguistics teacher. Millions of dollars from the mining contracts were then siphoned into foreign bank accounts, transferred through a series of shell companies, and, among other things, directed towards the purchase of the New York City apartments for the benefit of Batbold’s family, including his eldest son who used the apartments.
The civil forfeiture complaint further explains how Batbold and his family used state-owned mining contracts to funnel funds through shell companies for their personal use, consistent with the scheme used to purchase the apartments sought by the government for forfeiture. Although it had no operational history or experience in commodities, one of the shell companies was awarded a mining contract worth $30 million, and proceeds were wired to an account in the United States held by Batbold’s eldest son that was earmarked for personal use, such as car payments, travel and an interior designer.”
In the DOJ release, Breon Peace (U.S. Attorney for the Eastern District of New York) stated:
“As alleged, former Mongolian Prime Minister Batbold used the profits from his illicit corruption scheme to purchase high-end real estate in violation of United States federal law. [This] forfeiture action sends a message that corrupt officials will not use our real estate market to conceal proceeds of crimes. My Office will not tolerate public corruption that undermines faith in government, wherever committed.”
Nicole Argentieri (Principal Deputy Assistant Attorney General, head of the Justice Department’s Criminal Division) stated:
“As alleged in the complaint, Sukhbataar Batbold — the former prime minister of Mongolia — abused his position as prime minster to profit from the sale of his country’s natural resources. He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States. With this action, those properties are subject to forfeiture. Kleptocrats should take note: the Criminal Division is unwavering in its resolve to recover proceeds of official corruption and take the profit out of crime.”
James Smith (Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) stated:
“Former Mongolian Prime Minister Sukhbaatar Batbold allegedly crafted a corruption scheme, funneling millions of dollars from mining contracts through illegitimate shell companies to finance his family’s lavish lifestyle including the purchase of two luxury apartments in Manhattan. Batbold’s alleged behavior – personally profiting off of public corruption comes at the expense of the law-abiding citizens he governed. [This] action emphasizes the FBI’s commitment to dismantling public corruption and punishing those who utilize the U.S. banking system to illegally divert resources, wherever it may occur.”
