As highlighted in this prior post, in September 2022 the DOJ announced that two Marshall Island nationals (Cary Yan and Gina Zhou) arrived in the U.S. after being extradited from Thailand based on 2020 criminal charges that the individuals violated the Foreign Corrupt Practices Act (and other laws) in connection with an alleged scheme to bribe elected officials in the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation.
According to the indictment, Yan and Zhou acted as officers, directors, employees, and agents of a New York City based non-governmental organization (World Organization of Governance & Competitiveness (WOGC)) and, while in New York City and other locations in U.S. territory, to offer and pay bribes to government officials in the RMI to pass certain legislation that would benefit the business interests of Yan, Zhou and their associates. Specifically, to establish a semi-autonomous region within a region of the RMI known as the Rongelap Atoll.
In December 2022, Yan and Zhou pleaded guilty to one count of conspiracy to violate the FCPA’s anti-bribery provisions. (See here).
Yesterday, the DOJ announced that Yan was sentenced to 3.5 years in prison.
As noted in the DOJ’s release, earlier this year “Zhou was sentenced to two years and seven months in prison for her role in the scheme.”
Sentencing submissions in FCPA matters often make for interesting reads and surely did in this matter.
In seeking a time served sentence, Yan’s sentencing submission states:
“Cary Yan is a good man who is genuinely remorseful for his offense. He has accepted responsibility for his conduct and makes no excuses for it. His path to this courtroom has been an extraordinary one.
Born in China into extreme poverty, he grew up begging on the streets. [Redaction]. Despite these challenges, he built a successful career as a consultant and adviser and has devoted considerable time and money to helping the less fortunate.
While Cary committed a serious crime for which he is deeply sorry, he has already been adequately punished. He is a first-time offender, and as of the date of sentencing, he will have been incarcerated for a total of 30 months, 21 of which were spent in horrendous conditions in a Thai jail. Cary is 51 years old and suffers from serious health conditions, and after completing his sentence, he will be deported and likely face a period of immigration detention. Furthermore, a time-served sentence would be consistent with sentences in comparable cases. Given these factors, a sentence of time served satisfies the objectives of 18 U.S.C. § 3553(a).
[…]
In 2016, Cary founded a non-governmental organization: the World Organization of Governance and Competitiveness (“WOGC”). Its mission was to provide strategic planning services to countries and private companies in order to promote investment and sustainable development and combat poverty and hunger. Between 2016 and 2020, when Cary was arrested in this case, WOGC donated food and other supplies to impoverished communities in Sri Lanka, Vanuatu, Honduras, El Salvador, Zambia, Kiribati, Panama, and the Marshall Islands, of which Cary is a naturalized citizen. In addition to its charitable donations, WOGC has advised various governments and private businesses on development and anti-poverty initiatives. WOGC’s strategic planning activities have included a development plan for the government of Liberia, a medical marijuana project in Thailand, and the Rongelap Atoll initiative (“RASAR”) at issue in this case.
[…]
WOGC and its partners in the Marshall Islands worked together to promote RASAR, a legislative initiative to create a special administrative region in Rongelap. RASAR was intended to encourage investment in Rongelap and promote resettlement of the area. As with any development initiative, both the investors and the recipients of those investments stood to gain financially. While Cary planned to invest in Rongelap, he did not have any immediate financial stake in the initiative. For him to have benefited financially, RASAR would have needed to pass and future investments that he had yet to make would have needed to be profitable. While personal gain was a possibility, it was speculative and not Cary’s primary reason for supporting RASAR. He supported the initiative because he – like RASAR’s local supporters – believed it would stimulate development in the Marshall Islands and help lift people out of poverty.
[…]
In determining a just sentence, the Court should also consider the circumstances of Cary’s incarceration, much of which has been spent in terrible conditions in Thailand during some of the worst periods of the pandemic.
[…]
The trauma Cary experienced in Thailand has left a lasting impact on his physical and emotional health.
From November 2020 to August 2022, a period of 21 months, Cary was an inmate at the Bangkok Remand Prison. The horrifying conditions of Thailand’s jails have been documented by international rights organizations and recounted to the Court in detail by Ms. Zhou. Unfortunately, Cary’s experience in Thailand was consistent with those of Ms. Zhou and many others incarcerated there.
At the Bangkok Remand Prison, where Cary was incarcerated, 70 to 80 inmates lived in a single room of around 450 square feet. Due to the lack of space, the inmates slept side-by-side on the floor. The 70 to 80 inmates shared a single toilet, for which there was no privacy. When inmates could not wait to use the toilet, they would defecate on themselves and feces would overflow into the shared cell. The facility was infested with vermin. Cary had neither shoes nor proper clothing. He was dressed only in underwear.
Despite the sweltering heat of Bangkok, where the average high is over 90 degrees Fahrenheit during almost all of the year, showers were sometimes limited to less than a minute, and the dirty shower water was recycled. The combination of heat, humidity, lack of ventilation, frequent power outages, and overcrowding meant that inmates at the jail were often perspiring heavily in close quarters.
[…]
The Court should sentence Cary to time served. The offense conduct was an aberration in an otherwise praiseworthy life. Having escaped poverty himself, Cary has spent much of his life helping others do the same. A sentence of time served – the equivalent of about 35 months, accounting for good time – would be in keeping with sentences in comparable cases and would properly account for Cary’s history and characteristics, the conditions of his confinement in Thailand, and the immigration consequences of his case.”
The DOJ sought a sentence of 4.75 years for Yan and stated in its sentencing submission, among other things, as follows:
“While the Guidelines in FCPA cases are typically driven by large bribe amounts and anticipated benefits, here the defendant was able to bribe officials from the RMI relatively cheaply. Yet bribery—in large and small amounts alike—causes significant global harm.
[…]
While Yan has accepted responsibility, his superficial claims of a benevolent motive are reason to doubt that he recognizes the gravity of his offense. So is Yan’s claim that his offense was “an aberration.” This crime was not a momentary lapse in judgment. Yan played a long game. He acquired a unaffiliated NGO, in order to position himself to bribe numerous RMI officials. When those initial bribes failed to accomplish Yan’s goal of establishing the RASAR, he sought to boot the RMI’s then-President from office. And although that attempt failed, when there was a change in administrations, Yan worked with the officials he had bribed to try again. It was only the combination of the pandemic and the charges in this case that ultimately foiled Yan’s efforts. Given Yan’s persistent illegal and anti-democratic conduct, and his apparent failure to now recognize its seriousness, a substantial sentence is appropriate to send the message, both to the public and to Yan himself, that foreign bribery will be met with serious punishment.”
[…]
Yan’s incarceration during the extradition process does not justify the leniency he requests. That is not to say that Yan’s time in custody between his November 2020 arrest and his September 2022 extradition is irrelevant. To the contrary, the Government agrees with the Court’s remarks at co-defendant Gina Zhou’s sentencing that incarceration anywhere during the height of the pandemic merits some leniency. And as the Government has previously noted to the Court, the Federal Bureau of Investigation inquired into the conditions of the defendants’ incarceration, but was not able to either confirm the defendants’ claims about the harshness of their incarceration or uncover evidence that those claims were inaccurate. However, in light of those factors, the Government made what it viewed as a generous and reasonable plea offer in this case: an offer with a five-year statutory maximum and Guidelines that were capped by that maximum. In other words, Yan’s plea deal already accounts for this mitigating factor.”
