As highlighted in this prior post, in January 2018 the DOJ announced that Mark Lambert (pictured – a former co-president of Transport Logistics International) was criminally charged with Foreign Corrupt Practices Act and related violations for his alleged “role in a scheme to bribe an official at a subsidiary of Russia’s State Atomic Energy Corporation.” The enforcement action concerned the same core conduct at issue in the prior enforcement actions involving Vadim Mikerin (an alleged Russian “foreign official”) and Daren Condrey. (See here and here for prior posts).
As highlighted in this prior post, in November 2019 a jury found Lambert guilty of four counts of violating the Foreign Corrupt Practices Act (FCPA), two counts of wire fraud, and one count of conspiracy to violate the FCPA and commit wire fraud. (The jury returned not guilty verdicts on three FCPA counts and one count of money laundering).
In connection with the verdict, Lambert’s counsel William Sullivan (Pillsbury Winthrop Shaw Pittman LLP) provided FCPA Professor the following statement.
“We were very disappointed that after seven days of deliberations and a jury inquiry regarding the meaning of ‘reasonable doubt’ as well as two deadlock notes, the jury on the Friday afternoon before Thanksgiving week decided to render a partial and inconsistent verdict. We plan to file the appropriate post trial motions, and request appellate review if necessary.”
In October 2020, Lambert was sentenced to 48 months in prison and three years of supervised release and he reported to prison in early January 2022 with an anticipated release date of June 2025.
However, prior to reporting to prison, Lambert filed an appeal with the Fourth Circuit and this post summarizes the issues and arguments on the little noticed appeal.
The issues on appeal are not necessarily substantive FCPA issues but are framed by Lambert as follows:
“1. Did the District Court err when it excluded certain emails from unavailable co-conspirators in which they discussed their criminal conspiracy and the reaction of the Government’s key cooperating witness upon learning of that conspiracy which reaction directly contradicts the substance of the earlier testimony of that cooperator?
2. Did the District Court err in refusing to grant Mr. Lambert’s motion for a mistrial after the jury twice indicated that it could not reach a unanimous verdict and instead issued an anti-deadlock instruction, which ultimately resulted in the jury returning a split verdict of guilty on seven of eleven counts and not guilty on four counts after over six days of deliberation?
3. Did the District Court err in denying Mr. Lambert’s Motion for Judgment of Acquittal with respect to two counts of wire fraud when the Government presented no evidence at trial that the purported fraud victim was ever deprived of any money and failed to present any evidence that any false statement or omission to the purported victim was material to an obligation to pay money that the victim was not otherwise willing and obliged to pay?”
Lambert’s July 2021 brief contains the following “Statement of the Case” (internal citations omitted).
“Transport Logistics International, Inc. (“TLI”), founded in 1998 by Norman Ravenscroft, was in the business of providing logistical support services for the international nuclear material transportation industry. Shortly after TLI was founded, Mr. Ravenscroft hired Rodney Fisk and Daren Condrey as CEO and Senior Vice President, respectively. Both Mr. Fisk and Mr. Condrey were appointed board members upon their initial employment. Appellant Mark Lambert was also hired as an original employee of TLI, but was subordinate to Mr. Ravenscroft, Mr. Fisk, and Mr. Condrey, and was not named to TLI’s board until 2005.
TLI’s primary client, TENEX, is a commercial Russian energy company that supplies uranium and uranium enrichment services to nuclear power companies throughout the world. TENEX is wholly owned by the holding company Atomenergoprom, which in turn is wholly owned by Rosatom, the Russian equivalent of the U.S. Department of Energy. TENAM is TENEX’s wholly owned commercial subsidiary in the United States, established as a Maryland corporation in or about October 2010 to facilitate business between TENEX and its commercial utility customers in the United States. Vadim Mikerin, a Russian national, was employed by TENEX from 2004 through 2010 and subsequently relocated to the United States to act as the President of TENAM and primary contact for TLI.
According to evidence presented at trial, at some point in or around 2002 Mr. Fisk, acting alone on behalf of TLI, and Mr. Mikerin entered into a payment agreement on behalf of TLI and TENEX whereby TLI would pay “commissions” or “remunerations” to TENEX on contracts TLI was awarded. TLI, in turn, would raise the transportation bid prices to TENEX in order to cover these “commission” or “remuneration” payments. These payments to TENEX were described as “commissions” in TLI’s contemporaneous business records. Evidence presented at trial showed that TLI made “commission” payments to TENEX as early as 2002. The commission payment would be approved by Mr. Fisk and TLI would wire the payment to an offshore account at the direction of Mr. Mikerin, acting on behalf of TENEX.
At trial, Mr. Condrey, the Government’s main witness against Mr. Lambert who had pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act and commit wire fraud and entered into a cooperation agreement, testified that at some point around 2007, Mr. Fisk, who was leaving TLI, informed both Mr. Condrey and Mr. Lambert that TLI, would need to make kickback payments to Mr. Mikerin to secure transportation contracts from TENEX. However, Mr. Condrey’s trial testimony was in direct conflict with the statement of facts to which he pleaded guilty under oath, which provided that Mr. Condrey himself first became aware of the scheme surrounding these illicit payments in 2004. When cross-examined by Mr. Lambert’s counsel, Mr. Condrey could offer no explanation for his inconsistent description of the genesis of the alleged conspiracy, essentially admitting that he had lied under oath during his plea hearing when he affirmed that the scheme began in 2004, rather than 2007. Mr. Condrey’s testimony was further contradicted by emails Mr. Lambert sought to introduce into evidence, which showed that, in fact, Mr. Condrey learned of the pre-existing scheme between Mr. Fisk and Mr. Mikerin much later, in 2009, when he alone was mistakenly copied on emails between Fisk and Mikerin that discussed an embezzlement scheme that they sought to conceal from Mr. Condrey and Mr. Lambert. Unlike Mr. Condrey, Mr. Lambert was not inadvertently copied on these emails between Fisk and Mikerin, and therefore did not learn of the preexisting Mikerin and Fisk scheme.
Evidence at trial showed that Mr. Mikerin or Mr. Fisk directed that TENEX “remuneration” or “commission” payments be sent to bank accounts in the name of three entities: Wiser Trading Ltd., Ollins Development Inc., or Leila Global Ltd. Evidence at trial also showed that each TENEX “commission” or “remuneration” wire from at least 2009 through 2014 went to one of these three accounts. There was absolutely no evidence presented at trial as to the owners of these accounts, which individuals had access to these accounts, or the ultimate recipients of any funds deposited into these accounts. There was similarly no evidence presented at trial showing that Mr. Mikerin ever had access to these accounts or received any funds from these accounts, or that he exerted any influence over TENEX in the awarding of transportation contracts, or that Mr. Lambert ever believed that Mikerin could or ever did exert any such influence.
On April 3, 2019, Mark Lambert was charged in a Second Superseding Indictment with knowingly and willfully conspiring with others to violate the Foreign Corrupt Practices Act and commit wire fraud in violation of Title 18 U.S.C. § 371 (Count 1), violations of the Foreign Corrupt Practices Act Title 15 U.S.C. § 78dd-2 (Counts 2 through 8), allegations of wire fraud in violation of Title 18 U.S.C. § 1343 (Counts 9 and 10), and money laundering in violation of Title 18 U.S.C. § 1956 (a)(2)(A) (Count 11).
During the trial, Mr. Lambert sought to introduce two email exhibits that demonstrated that the Government’s key cooperating witness and TLI’s former co-president, Daren Condrey—alone—had first learned about the alleged conspiracy at a time and under circumstances that materially contradicted his testimony at trial regarding how and when Mr. Condrey and Mr. Lambert became aware of the alleged fraudulent scheme. Lambert contended that Condrey alone, when Mr. Fisk was about to leave TLI, became aware of the preexisting bribery scheme between Fisk and Mikerin and that this arrangement continued to be concealed from Lambert. The District Court denied Mr. Lambert’s request to offer these emails for the truth of the matters asserted therein under Fed. R. Evid. 803(3) and Fed R. Evid. 804(b)(3).
At the conclusion of trial, and after two days deliberations, on November 15, 2019, the jury requested the definition of “reasonable doubt” and further clarification on the wire fraud statute. After two more days of deliberations, the jury came back with a note at 2:52 p.m. on November 18, 2019, stating “the jury is unable to reach a unanimous verdict.” Mr. Lambert subsequently moved for a mistrial. The District Court denied this request as premature. Two days later on November 20, 2019, the jury indicated for a second time that it was deadlocked, stating “the jury is still unable to reach a unanimous verdict” with “still” and “unable” underlined; Mr. Lambert renewed his motion for a mistrial, which the District Court denied and instead issued an Allen charge over Mr. Lambert’s objection. The District Court instructed the jury as follows:
So I did receive the note that you sent at 11:30 a.m., stating that you are still unable to reach a unanimous verdict. And given that, I thought it was appropriate to bring you back in the courtroom. And in a situation like this, I would like to give you some additional instructions that may assist you.
I am mindful of the time of the time you have spent deliberating and of the conscientious attitude that you have applied to your duties in this case. As I’ve previously instructed you, in order to return a verdict on a count, the verdict must be unanimous; that is, each of you must agree with the verdict.
As jurors, you each have a duty to consult with one another and to deliberate with a view to reaching an agreement if an agreement can reached without doing violence to your own individual judgment.
You must each decide the case for yourself, but only after an impartial consideration of the evidence with your fellow juror. You are reminded also that the prosecution bears the burden of proving each element of the offense –of each offense beyond a reasonable doubt.
It is common for jurors to have differences. In the course of deliberations, you should not hesitate to reexamine your own views and change your opinion if you are convinced it is erroneous.
Therefore, if at this point any of you find yourself in the majority, you should listen carefully to the views of the minority and re-examine your own views if warranted. Likewise, if at this point any of you find yourself in the minority, you should listen carefully to the views of the majority and re-examine your owns views if warranted.
Further consideration may convince you that a change in position is justified upon the law and the evidence. But do not surrender your honest conviction as to the weight or effect of the evidence solely because of the opinion of your fellow jurors or for the mere purpose of returning a verdict. A verdict must represent your own considered judgment.
As I told you in my original instructions, this case is an important one to the government. It is equally important to the defense to the defendant. It is desirable if a unanimous verdict can be reached as there is no reason to believe that another jury would do a better job than this jury in reviewing the evidence in reaching a just verdict. Any further jury must be selected in the same manner and from the same source as you have been chosen. So there appears no reason to believe that the case would ever be submitted to twelve men and women more intelligent, more impartial or more competent to decide it or that more or clear evidence could be produced on behalf of either side. But your verdict must reflect the conscientious judgment of each juror and under no circumstance must any juror yield his or her conscientious judgment.
With these instructions in mind and also with the reminder that you can review all of the earlier instructions provided in writing, including Instruction Number 73, which relates to deliberations, I am instructing you now to continue your deliberations. Thank you very much.
Ultimately, after nearly 50 hours of deliberations, two deadlock notes, and an Allen charge, the jury convicted Mr. Lambert on seven counts of the Superseding Indictment and acquitted him on four. Mr. Lambert subsequently moved for a judgment of acquittal on the indictment’s two wire fraud counts based on the lack of evidence presented by the Government on key elements of the wire fraud offense. The District Court denied Mr. Lambert’s motion on February 11, 2020. Mr. Lambert was sentenced on October 30, 2020, to 48 months of imprisonment and the District Court issued an amended final judgment on November 20, 2020. Mr. Lambert filed his timely Notice of Appeal on November 23, 2020.”
Under the heading “Summary of Argument,” Lambert’s brief states:
“The District Court erroneously denied Mr. Lambert’s request to admit two key pieces of documentary evidence involving an unavailable deceased declarant, Rod Fisk, who was the key figure in the alleged fraud scheme. These emails showed that Daren Condrey alone, the Government’s key cooperating witness, learned in 2009 of an existing scheme created by Mr. Fisk and Mr. Mikerin, the alleged recipient of kickback payments from TLI, to embezzle funds from TLI through a fraudulent “remuneration” program. These emails support Mr. Lambert’s contention that Mr. Condrey alone – without Mr. Lambert’s knowledge – became aware of the existing bribery scheme in December 2009. This information was highly probative as it directly contradicted Mr. Condrey’s trial testimony that he and Mr. Lambert together were initiated into a bribery scheme by Mr. Fisk some time in 2007. The District Court erred in finding that these emails could not be admitted for the truth of their contents as statements against interest by Mr. Fisk and statements showing Mr. Condrey’s mental state upon learning of Mr. Fisk and Mr. Mikerin’s scheme.
Mr. Condrey had already admitted to falsely affirming at his plea hearing that he became involved in the conspiracy in 2004 (at the plea hearing, no mention was made of when Mr. Lambert allegedly learned of the scheme), and now claimed that he, Mr. Fisk, and Mr. Lambert together conceived of the scheme in 2007. The proffered emails would have shown that Mr. Condrey had twice falsely testified under oath about the origins of the alleged scheme and would have supported Mr. Lambert’s contention that Fisk alone conspired with Mikerin beginning in 2002 to siphon funds from TLI and worked with Mikerin to conceal their arrangement from Mr. Condrey and Mr. Lambert. This may have been a fatal blow to his credibility and the Government’s case. The jury’s nearly 50 hours of deliberations and two deadlock notes show that jurors already harbored doubts about the Government’s case, and this additional impeachment material could certainly have established reasonable doubt in jurors’ minds, resulting in an acquittal or mistrial.
The District Court’s decision to deny Mr. Lambert’s motion for a mistrial and instead issue an anti-deadlock instruction (or Allen charge) was also in error. The District Court abused its discretion by denying a mistrial when the jury had given two clear indications that it could not reach a unanimous verdict, the second time after 5 days and over 25 hours of deliberation. The District Court further abused its discretion by issuing an Allen charge under circumstances that made it highly likely the jury would perceive the instruction as coercive, causing jurors in the minority to abandon their principled doubts about the Government’s case in the interest of returning a unanimous verdict.
Finally, the District Court erred when it denied Mr. Lambert’s motion for a judgment of acquittal on two wire fraud counts. The Government failed to present a single witness representing the purported victim, TENEX, and presented no evidence as to how alleged omissions or false statements by TLI would have been material to TENEX or resulted in a financial loss to TENEX. The Court should have concluded that no reasonable jury could have convicted Mr. Lambert on these counts based on this dearth of evidence regarding a key element of the wire fraud offense.”
In October 2021, the DOJ filed this response brief and under the heading “Summary of Argument” the brief states (internal citations omitted):
“The district court correctly denied Lambert’s acquittal motion. Condrey’s detailed testimony and voluminous documentary evidence abundantly supported the district court’s finding that the scheme involved “materially false representations or active concealment of material facts from TENEX.” As to the scheme to defraud, the evidence showed that Lambert and Condrey deceptively baked the cost of the bribes to Mikerin into TLI’s quotes to TENEX by inflating the costs in the quotes but deliberately omitting any indication that the costs included a kickback to Mikerin. They then took elaborate additional steps to conceal the existence of the bribes from TENEX.
The evidence likewise supported the materiality of the deceptive conduct underlying the fraud scheme. Condrey specifically testified that the scheme was designed to have Mikerin use his influence to have TENEX award sole-source contracts to TLI. Accordingly, the jury could readily infer that contracts “were not given based only on whether TLI’s bid was lower than other bids” and that therefore the information that the quotes were inflated by the cost of bribe and kickback payments would have, from an objective perspective, influenced TENEX’s decision-making. The elaborate steps the schemers took to conceal the bribes confirmed the inference of materiality
The district court did not err, plainly or otherwise, in refusing to admit for their truth the emails in two defense exhibits, DX 263 and DX 264, which Lambert sought as impeachment evidence against Condrey. Lambert abandoned his request for DX 263 below, and the district court had already admitted DX 264 for limited purposes so the text of those emails was before the jury. The statements in the emails were very oblique, and both the context of the statements and the corroborating evidence did not support Lambert’s interpretation of them. For a variety of reasons, the district court correctly ruled that the exhibits were not admissible under Fed. R. Evid. 803(3), 804(b)(3), or 807. Moreover, the district court could have excluded the exhibits under Fed. R. Evid. 403 as confusing and misleading to the jury. Regardless, the exclusion of the emails for their truth did not prejudice Lambert, in light of the overwhelming evidence of his guilt, the other substantial impeachment evidence against Condrey, and the limited impeachment value of the emails.
The district court properly exercised its discretion in declining to grant a mistrial and instead issuing an Allen charge when the jury reported that it was deadlocked. Moreover, Lambert waived his challenge to the wording of the Allen charge by proposing much of the language that he now challenges. Regardless, the Allen charge was neutral, balanced, and in line with instructions this Court has approved in the past. That the jury later returned a split verdict, finding Lambert guilty on some counts and not guilty on others, shows that it engaged in thoughtful deliberation and was not coerced.”
Strategies For Minimizing Risk Under The FCPA
A compliance guide with issue-spotting scenarios, skills exercises and model answers. "This book is a prime example of why corporate compliance professionals and practitioners alike continue to listen to Professor Koehler."