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At FCPA Sentencing, Judge Goes Off On Various Aspects Of FCPA Enforcement

Judge Garaufis

While Foreign Corrupt Practices Act enforcement is largely devoid of judicial scrutiny, sentencing of individual defendants remains a judicial function and provides a rare (and often overlooked) public glimpse of someone other than the enforcement agencies weighing in on issues relevant to FCPA enforcement.

Sentencing transcripts not only capture advocacy moments seldom publicly seen in FCPA enforcement, but also telling unscripted comments concerning FCPA enforcement.  For instance, while the enforcement agencies and others often portray bribery as a black and white issue, judges sentencing FCPA individual defendants often see shades of gray.

Several examples are highlighted in the book “The FCPA in a New Era” and another noteworthy example concerns recent remarks made by Nicholas Garaufis (Senior District Judge, E.D.N.Y. – nominated to the bench by President Clinton) in sentencing Samuel Mebiame, a Gabonese national connected to Och-Ziff who pleaded guilty to conspiracy to violate the FCPA’s anti-bribery provisions in connection with African mining projects.

For starters, in sentencing Mebiame Judge Garaufis rejected the DOJ’s 5 year sentencing recommendation and sentenced Mebiame to 2 years in federal prison. It is the norm, not the exception, that federal court judges significantly reject DOJ sentencing recommendations in individual FCPA enforcement actions.

Like several other judges sentencing FCPA individual defendants, Judge Garaufis expressed concerns with the DOJ’s frequent approach of zeroing in on one individual and urging the judge to make an example of the one individual to achieve maximum deterrence.

Judge Garaufis stated:

“He [Mebiame] is not a central player in the Och-Ziff scheme, which has, from my reading of the public documents, involves over $200 million in alleged or I guess admitted bribes in various African countries, the largest of those offenses having absolutely nothing to do with Mr. Mebiame, and countries that he has no connection to. So, I think to call  him a major player and then to sort of parse those words is not fair.”

Larry Krantz, Mebiame’s counsel, continued with this theme and stated:

“So, he [Mebiame] finds himself here oddly, and, I would say sympathetically as his lawyer, the only person charged in what has been a large government investigation. And I believe that having charged him, frankly, institutional considerations set in with the U.S. Attorney’s Office. These are FCPA cases, they’re governed by Main Justice, everything is vetted through Main Justice, and there are policy considerations that impact decisions, recommendations that are made.

And the policy decisions, as I understand it, are harsh in FCPA cases, which is why there is a bevy of cases out there where the Government is asking for a very high sentence and the defendant is not sentenced anywhere near that.

You might ask, well, why is it that in FCPA cases it seems to be happening more commonly than others, and I suggest that, to my understanding, the reason is because it’s one of those cases where there’s a centralized policy that’s being implemented. And I respect the policy. The thinking is that stiff sentences will send a message, deterrent, corruption is a bad thing. We accept all that. But it can’t be done, in our view, on the back of Mr. Mebiame’s life.”

Thereafter, Judge Garaufis stated:

“Well, I understand the Government’s objectives in bringing this prosecution and I understand the Government’s objectives in bringing the civil cases and the cases against Och-Ziff. And I think it’s really ironic that in the other cases that I have, to put it as dispassionately as possible, the room was filled with lawyers, high-priced lawyers from  major law firms. This Defendant shows up at the door of the IRS without any representation. And I have a real concern about whether he had a real understanding of the potential consequences.

Not that anything was done improperly by the Government, but even a fare beater on the New York City subway before he or she goes before a judge gets legal representation. And here we have this massive fraud scheme against three countries’ governments by a major entity or entities, and this gentleman was a participant in it in a significant way, but the rest of the people who were engaged in this are off on some golf course. There is an incongruity, there’s an imbalance here, frankly.

Now, it may be there isn’t sufficient evidence to prosecute certain people. That may be. But I have all this information that I received in connection with other cases which indicates that the Government is well aware of certain behavior that happened over an extended period of time throughout Africa. And all I have here is I have these deferred prosecution agreements on the one hand, which are not part of this case that’s before me today, and then I have this defendant who came forward with information — some of it may have been correct, some of it may have been misleading, I don’t know — but he voluntarily came and disgorged this information which demonstrated that he was guilty of a conspiracy to bribe foreign officials for mining licenses, and he’s been sitting at the MDC since August 16, 2016 and he faces the statutory maximum.

If Congress wanted make the statutory maximum 20 years, they certainly have had the opportunity to do that. They had the opportunity to create mandatory minimums. They do that all the time in other areas, but they haven’t done that in this area, on this particular charge.

So, I’m at a loss about how one balances the different considerations in creating a sentence that is  sufficient but not greater than that necessary to fulfill the purposes of sentencing in this case.”

Thereafter, Judge Garaufis stated:

“Well, it’s clear that this is an intelligent, articulate, and experienced individual who has engaged in criminal misconduct, of which he admits freely, and that the victims are his misconduct are, in the end, the  people of the countries where the bribery took place. And that’s no small matter. In fact, some of the poorest people in the world live in those countries.

Whether they would have benefited if he had not engaged in this conduct, I’m not entirely sure as I’m not an expert on the politics of the nations in question. My guess, though, is that this kind of behavior is rather common in those countries and the population is often victimized by the government officials who are sworn to protect and defend the population. But that having been said, the Defendant’s behavior is unacceptable, he’s pleaded guilty, and he deserves a substantial sentence.

My biggest problem with this case and this defendant is a lack of balance between the sentence that’s requested and the fact that while he’s a player, there are many other people who are obviously as accountable or more accountable than he is for what’s been going on, and in all this time I haven’t seen anybody brought forward who has been brought in and held  accountable. Now, I don’t know what will happen tomorrow or next year, but this has been going on a long time.

The only people who seem to do well in this kind of a situation are lawyers at big law firms, and I’m really sick and tired of it when they march into my courtroom and they get a deferred prosecution agreement for their clients, also who have a presumption of innocence, obviously, and I don’t discount that.

But this is a very troubling situation. I’m not going to hold Mr. Mebiame responsible for all the ills of corruption in Africa, or anywhere else for that matter, but he’s the only person standing in front of me.”

In closing, Judge Garaufis stated:

“I’ve guess I’ve said it three times and I’ll say it again: It’s time for people who are responsible for this kind of behavior to be held accountable; not just one person, but everybody. And, so, to those people in Washington who are busy having conversations with white-shoe lawyers all over the East Coast, I think it’s time for them to get real and stop resolving matters by avoiding the difficult decisions that need to be made. We have a law, so why don’t you go out and enforce it?

And I’m not talking to these prosecutors, I’m talking to everybody down at the Justice Department. If one person is this responsible, that means that a lot more is going on. You don’t have to be a Rhodes scholar to understand that this kind of behavior is rampant in third world countries.”

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