Yesterday the DOJ announced  that Chi Ping Patrick Ho (pictured) was sentenced “to serve 36 months in prison for his role in a multi-year, multimillion-dollar scheme to bribe top officials of Chad and Uganda in exchange for business advantages for CEFC China Energy Company Limited (“CEFC China”).” The sentence follows Ho’s conviction of FCPA, money laundering, and conspiracy offenses after a December 2018 trial (see here  for the prior post).
As further noted in the DOJ release: “in addition to his prison term, Ho, 69, a citizen of the People’s Republic of China who resided in Hong Kong prior to his arrest in November 2017 and has been detained since his arrest, was fined $400,000 and [f]ollowing his prison sentence, Ho will be removed from the United States.”
In announcing the sentence, Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division stated:
“Patrick Ho bribed officials at the highest levels of government in Chad and Uganda in pursuit of lucrative oil deals and other business opportunities, all while using a U.S.-based NGO to conceal his criminal scheme. This kind of corruption undermines world markets and tilts the playing field against law-abiding companies and individuals. The Department will continue to investigate and prosecute individuals and corporations that engage in foreign bribery.”
U.S. Attorney Geoffrey Berman for the Southern District of New York stated:
“Patrick Ho schemed to bribe the leaders of Chad and Uganda in order to secure unfair business advantages for the Chinese energy company he served. His actions were brazen, including offering the president of Chad $2 million in cash, hidden in gift boxes. Foreign corruption undermines the fairness of international markets, erodes the public’s faith in its leaders, and is deeply unfair to the people and businesses that play by the rules. Today’s sentence recognizes the severe harm caused by Ho’s actions.”
That Ho has been sentenced is a fact, but how to “score” Ho’s sentence (and other FCPA sentences) is an open question. On the one hand, it is a clear DOJ win and defense loss when an individual is sentenced to federal prison by a federal judge. On the other hand though, once guilt has been established, if one views sentencing as a separate and distinct adversarial proceeding, then the DOJ often losses as federal court judges often reject DOJ sentencing recommendations.
Such was the case in the Ho matter.
For instance, in his sentencing memo, Ho’s lawyers stated:
“In light of Patrick’s exceptional history of service and charity, his age and family circumstances, and his contributions to the Metropolitan Correctional Center (the “MCC”) community during his incarceration, we respectfully ask the Court to impose a sentence of time served. By the time he is sentenced, Patrick will have spent more than 16 months in custody, half a world away from home. During these months, the lives of Patrick and his family have been upended. An additional term of incarceration is unnecessary for deterrence purposes, and a sentence of time served appropriately balances the offense conduct against Patrick’s exemplary character and personal history.”
In its sentencing memo , the DOJ stated:
“The defendant’s United States Sentencing Guidelines (“Guidelines”) range reflects his extensive, deliberate, and exceedingly serious criminal conduct. For what he did, the defendant faces an advisory Guidelines range of at least 262 to 327 months’ imprisonment, as set forth in the United States Probation Office’s (“Probation Office”) Presentence Investigation Report (“PSR”), in which the Probation Office recommends a sentence of 60 months’ imprisonment and a $400,000 fine. The Government submits that to serve the legitimate purposes of sentencing, including promotion of respect for the law and general deterrence, the Court should impose a substantial sentence, consistent with the Probation Office’s recommendation.”
The three year sentence handed down by U.S. District Judge Loretta Preska is closer to Ho’s sentencing request than the DOJ’s sentencing recommendation. Does this mean that Ho won the sentencing phrase of the case and that the DOJ lost?
Regardless of the answer, the Ho sentence once again highlights how sentencing judges seem to see shades of gray in FCPA enforcement actions that the DOJ portrays to be black and white. (Several other examples are discussed in my book “The FCPA in a New Era”).
Although now a bit dated, a 2011 study of FCPA sentences (Gary Stein – “Sentencing of Individuals in FCPA Cases,” Business Crimes Bulletin (Jan. 2011) found:
“Over the past four years, approximately 58% of all federal sentences were within the Guidelines range and 40% were below the range, according to U.S. Sentencing Commission data. In FCPA cases, however, the opposite is true: a Guidelines sentence is the exception rather than the norm. Since 1998, a total of 36 individuals have been sentenced in FCPA cases. Only nine of the 36 defendants, or 25%, received sentences within the Guidelines range. The remaining 27 defendants — a remarkable 75% of the total — were sentenced below the range. [Since 2005], the percentage of below-Guidelines sentences is even higher: 81%.”
The study concluded:
“Many judges have failed to see the wisdom of imprisoning [individual FCPA defendants] for many years in order to ‘send a message’ to the business community that violations of the FCPA will not be tolerated. Instead, courts seem to be sending a message of their own to the DOJ.”
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