An FCPA trial and not an FCPA trial.
An FCPA Trial
In the FCPA’s 45 years, there have been only 21 trials (based on my research).
The FCPA’s 22nd trial began this week in a courtroom in the Eastern District of New York.
The case is U.S. v. Javier Aguilar. (See here for the prior post detailing the charges).
As described in this article:
“A former employee of the world’s largest oil trader, Vitol, is set to go on trial in the United States this week on charges of bribing officials in Ecuador to win a $300 million contract from state oil company Petroecuador.
Javier Aguilar, 49, is the first individual to stand trial in the United States as part of a sprawling Justice Department probe into commodity trading firms paying bribes to win business from state-run companies across Latin America, a scandal that has roiled energy markets from Mexico to Brazil.
[…]
Federal prosecutors say Aguilar, who worked in Houston as an energy trader, paid nearly $1 million in bribes to senior Petroecuador manager Nilsen Arias and an unnamed Energy Ministry official to help a state-owned Middle Eastern company win a 30-month contract to market the South American country’s fuel oil in December 2016.
Vitol had a deal to buy the fuel oil from the Middle Eastern company and then market it, prosecutors said. That company is not named in court papers, but Reuters has previously reported it is Oman Trading International, which has been rebranded as OQ Trading and fully integrated into Omani state oil company OQ.
OQ did not respond to a request for comment.
According to prosecutors, Aguilar had Vitol wire money to shell companies controlled by his associates, who then sent funds to accounts for Arias and the other official. Aguilar had Vitol enter into “sham” agreements with the shell companies so the transactions would appear legitimate, prosecutors said.
Arias and the associates – Lionel Hanst, Antonio Pere and Enrique Pere – have entered guilty pleas and may testify against Aguilar.
Aguilar has pleaded not guilty to three counts of conspiracy to violate the FCPA, violating the FCPA and conspiracy to commit money laundering. The money laundering count stems in part from charges of paying bribes to officials at Mexican state-run oil company Pemex.
His lawyers have argued in court papers that he had no basis to believe that the transactions prosecutors described as sham contracts with shell companies were illegitimate, and that the Pere brothers held themselves out to be “knowledgeable consultants” in Ecuador’s oil market.”
Not an FCPA Trial
As highlighted in this prior post, in March 2023 the DOJ filed a superseding indictment adding a Foreign Corrupt Practices Act conspiracy charge to the criminal charges against Samuel Bankman Fried.
As alleged by the DOJ:
“In or about 2021, Bankman-Fried authorized and directed a bribe of at least $40 million to one or more Chinese government officials. The purpose of the bribe was to influence and induce one or more Chinese government officials to unfreeze certain Alameda trading accounts containing over $1 billion in cryptocurrency, which had been frozen by Chinese authorities. Bankman-Fried and others sought to regain access to the assets to fund additional Alameda trading activity, in order to assist Bankman-Fried and Alameda in obtaining and retaining business.”
In June 2023, the court granted a DOJ request to sever the FCPA (and other counts) in the superseding indictment largely based on extradition issues in the Bahamas.
In November 2023, Bankman Fried was found guilty of securities fraud and other criminal charges and his sentencing is scheduled for March 2024.
Recently, the DOJ informed the court that it does not plan to proceed with a separate trial on the FCPA and other charges in the superseding indictment.
This DOJ letter to the court states:
“The Government respectfully submits this letter to provide notice to the Court and the defendant that it does not plan to proceed with a second trial …. As explained below, much of the evidence that would be offered in a second trial was already offered in the first trial and can be considered by the Court at the defendant’s March 2024 sentencing. Given that practical reality, and the strong public interest in a prompt resolution of this matter, the Government intends to proceed to sentencing on the counts for which the defendant was convicted at trial.
On December 9, 2022, a grand jury returned indictment 22 Cr. 673 (the “Original Indictment”) in eight counts. Counts One through Seven charged the defendant with two counts of conspiracy to commit wire fraud, two counts of wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. Count Eight of the Original Indictment charged the defendant with conspiracy to make unlawful campaign contributions. The defendant was extradited by The Bahamas in December 2022, but in July 2023, The Bahamas informed the United States that it had not included Count Eight in the counts for which it had extradited the defendant, and that The Bahamas did not consent to trial on Count Eight. Thus, the Government was prevented from proceeding to trial on Count Eight due to its binding treaty obligations with The Bahamas. At trial, however, the Government offered evidence of the defendant’s scheme to make unlawful campaign contributions, both as direct evidence of the other seven counts and pursuant to Federal Rule of Evidence 404(b). The defendant was convicted on all counts. And because the Government also proved that the defendant engaged in a scheme to make unlawful campaign contributions, the Court may consider this scheme as relevant conduct at the defendant’s sentencing.
On March 28, 2023, the grand jury returned [a] Superseding Indictment … which included five additional counts (the “Additional Counts”). The Additional Counts charged the defendant with conspiracy to bribe foreign officials, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business, and substantive securities fraud and commodities fraud. At the trial, the Government introduced evidence of the defendant’s conduct underlying the Additional Counts, either as direct evidence or pursuant to Rule 404(b). The evidence at trial, including witness testimony and documentary evidence, proved that the defendant engaged in a conspiracy to bribe Chinese officials, that he made false statements to a United States bank to induce it to open a bank account that he used in furtherance of his other fraudulent schemes, that he conspired to operate an unlicensed money transmitting business, and that he committed substantive securities fraud and commodities fraud. The Court may also consider evidence of the defendant’s commission of these crimes at his sentencing.
After obtaining the Superseding Indictment, the United States sent a request to The Bahamas for a waiver of the rule of specialty to permit trial on the Additional Counts. However, the defendant moved to intervene in the extradition process in The Bahamas, delaying the process. Accordingly, the Government consented to the Court’s severance of the Additional Counts and proceeded to trial on the seven counts for which the defendant was originally extradited. To date, The Bahamas has not agreed to waive the rule of specialty, and the Government does not have a timeline for when The Bahamas may respond to its request. Nonetheless, as described above, the Government proved at trial the conduct underlying the Additional Counts. Indeed, trial on the Additional Counts would feature much of the same evidence that was presented at the initial trial. And, importantly, a second trial would not affect the United States Sentencing Guidelines range for the defendant, because the Court can already consider all of this conduct as relevant conduct when sentencing him for the counts that he was found guilty of at the initial trial.
Accordingly, the Government does not intend to proceed to trial on the Additional Counts. Proceeding with sentencing in March 2024 without the delay that would be caused by a second trial would advance the public’s interest in a timely and just resolution of the case, as “delay in sentencing may leave the defendant, as well as the victim, in limbo concerning the consequences of conviction.” United States v. Ray, 578 F.3d 184, 198 (2d Cir. 2009). The interest in avoiding delay weighs particularly heavily here, where the judgment will likely include orders of forfeiture and restitution for the victims of the defendant’s crimes. The Government has concluded that the public interest in a prompt resolution of this matter outweighs the interest in holding a separate trial.”
