In August 2020, the DOJ announced that Jose Luis De Jongh Atencio (De Jongh) “a former official at Citgo Petroleum Corporation, a Houston-based subsidiary of Venezuela’s state-owned and state-controlled energy company Petróleos de Venezuela S.A. (PDVSA)” was criminally charged “for his alleged role in laundering the proceeds of a scheme involving bribes made to corruptly secure business advantages from Citgo and PDVSA.”
In the indictment, the DOJ alleges that De Jongh was a “foreign official.”
Recently, De Jongh’s counsel (Dane Ball – Smyser Kaplan & Veselka LLP) filed a letter to the court stating in pertinent part (certain internal citations omitted):
“This Indictment alleges that Defendant Jose De Jongh was a “foreign official” under the FCPA because (1) he was employed by Citgo Petroleum Corporation (“Citgo”) and (2) Citgo was an “instrumentality” of the Venezuelan government. At trial, the defense does not intend to dispute the conduct alleged in this Indictment: De Jongh worked for Citgo; he received payments from vendors; and he conducted financial transactions. In fact, De Jongh voluntarily met with the government on multiple occasions in 2018 and freely admitted these facts.
The disputed issue is whether Citgo (a Delaware corporation headquartered in Texas and indirectly owned by PDVSA) was an “instrumentality” of Venezuela, thereby making De Jongh a Venezuelan “foreign official.” In its 22 pages, the Indictment cabins its allegation that Citgo was an instrumentality to one sentence: “Citgo was indirectly owned and controlled by, and performed functions of, the Venezuelan government, and was an ‘instrumentality’ of a foreign government as that term is used in the FCPA . . . .”.
The prosecution has produced nearly 5 million pages of discovery and 88 witness interview reports. The defense has reviewed it to try to understand the allegation that Citgo was an instrumentality of Venezuela. With one exception—that Citgo is indirectly owned by PDVSA— the defense has not located materials that shed light on this allegation. Thus, we asked the prosecution to provide more detailed allegations on instrumentality through a proffer, and the prosecution declined.
A bill of particulars is appropriate here. As this Court has said, “[t]he purpose of a bill of particulars is to cure omissions of details that might enable the defendant to prepare his defense. Thus, a bill of particulars may prevent prejudicial surprise at trial.” United States v. Davis, 2014 WL 6679199, *3 (S.D. Tex. Nov. 25, 2014) (Miller, D.J.) (granting bill of particulars in part; quoting and citing United States v. Haas, 583 F.2d 216, 221 (5th Cir.1978) and Norris v. United States, 152 F.2d 808, 811 (5th Cir.1946)).
In Davis, this Court clarified that a bill of particulars is not meant to provide the defense with a detailed disclosure of evidence the government intends to use at trial, see id., and we do not seek such a disclosure. To the contrary, we seek only to understand how Citgo was allegedly an instrumentality of the Venezuelan government.
Davis also explained that while discovery can sometimes adequately inform the defense of the details behind a broad allegation, when the discovery is voluminous, it is not an adequate substitute for a bill of particulars.
Here, in light of (1) nearly 5 million pages of discovery, (2) the Indictment’s single sentence alleging instrumentality, and (3) the prosecution’s refusal to provide additional detail informally, a bill of particulars is necessary to enable us to prepare a defense and to avoid surprise at trial on the instrumentality issue.”
In response the DOJ filed a letter stating in pertinent part (certain internal citations omitted):
“In his letter, Defendant acknowledges his employment at Citgo, concedes that he accepted payments from vendors and conducted the financial transactions at issue, and notes that he “does not intend to dispute the conduct alleged in this Indictment.” According to Defendant, the disputed issue at trial will be whether Citgo was an “instrumentality” of the Venezuelan government, as alleged in the Indictment. The term “instrumentality” is not defined in the FCPA. Rather, courts typically instruct juries with respect to the factors outlined in United States v. Esquenazi, 752 F.3d 912, 925 (11th Cir. 2014), to determine whether an entity is an instrumentality of a foreign government.In Esquenazi, the Eleventh Circuit held that an instrumentality “is an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own.” Esquenazi, 752 F.3d at 925. The Esquenazi court went on to explain that “what constitutes control and what constitutes a function the government treats as its own are fact-bound questions.” Id. The Esquenazi court also provided a non-exhaustive list of “some factors that may be relevant to deciding the issue,” including “whether the government has a majority interest in the entity.” Id.
Defendant’s letter shows that he has ably connected the dots. He understands that the government intends to prove that Citgo was “owned and controlled by, and performed functions of, the Venezuelan government, and was an ‘instrumentality’ of a foreign government” as that term is used in the FCPA. Defendant has identified, in the discovery provided by the government, materials that show that Citgo is a wholly-owned subsidiary of PDVSA, that is, that the Venezuelan government has a majority interest in the entity. See Esquenazi, 752 F.3d at 925.
Defendant understands the allegations against him. What Defendant may not yet have—and the government is not required to provide months before trial—is a precise roadmap of the evidence, witnesses, and documents with which the government intends to prove its case at trial, including the specific details regarding how the government will establish that Citgo was an instrumentality of the Venezuelan government.”
In response, De Jongh’s counsel stated (certain internal citations omitted):
The government used only one sentence in a 22-page indictment to allege that Citgo was an “instrumentality” of Venezuela. Now it assures this Court that the defense “has ably connected the dots.” But a federal prosecution should not be a board game in which a defendant is required to connect “dots” to figure out the charge against him.
The government attempts to distinguish Davis—and asks the Court not to require particulars regarding instrumentality—because, according to the government, it has provided us with a “roadmap of the evidence” and “the most relevant documents” with reference to specific paragraphs in the Indictment. The government omits, however, that it did so regarding only the undisputed paragraphs in the indictment—but not paragraph 3, the paragraph alleging that Citgo was an instrumentality and the only disputed paragraph in the indictment.
The government should be able to provide the particulars of its instrumentality allegation in a paragraph—one that would have taken less time to write than its opposition to our request.”
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