U.S. District Judge A. Howard Matz tentatively ruled Tuesday to throw out the foreign bribery convictions against Lindsey Manufacturing Co. and two of its executives.
A final order is expected tomorrow granting the defense motion to overturn the convictions and dismiss with prejudice the indictment against the California-based electrical tower manufacturing company and its executives due to government misconduct. A dismissal with prejudice means that the government cannot refile charges and must instead appeal to the U.S. Court of Appeals for the Ninth Circuit.
The company, Keith Lindsey, its president, and Steve Lee, its chief financial officer were convicted in May of bribing foreign officials at Mexico’s state-owned electricity utility, Comision Federal de Electricidad. They were charged under the Foreign Corrupt Practices Act, which prohibits payments to foreign officials to win business.
A sales agent, Angela Aguilar, was also convicted in the case. She was sentenced in June to time served and released. She was not a party to the motion to dismiss.
“It was a long time coming, but justice has been done,” Jan Handzlik of Venable LLP, who represents both Lindsey and the company, told Just Anti-Corruption. “The judge’s tentative ruling reaffirms the principle that the government has to play by the rules too, and in fact the government has a greater obligation to make sure that justice is done.”
The defense had filed for dismissal based on the grand jury testimony the government had failed to turn over before the conviction. In that testimony FBI case agent Susan Guernsey appeared to be presenting stronger links than actually existed between Lindsey Manufacturing and Swiss engineering firm ABB Ltd., which allegedly paid bribes to the Mexican utility.
The government responded to the charges in September. “The defendants strain to find misconduct where there is none, and they try to transform honest, non-prejudicial mistakes into something they are not,” prosecutors said in a filing.
In the hearing today, Justice Department attorney Jeffrey Goldberg of the Criminal Fraud Section said, “We regret those mistakes,” according to a report in Bloomberg. “We strive to get it right every time, and in this case we didn’t get it right every time,” he added.
The Justice Department did not immediately respond to a request for comment.
At the time of the conviction, Assistant Attorney General Lanny Breuer touted the verdict as an “important milestone in our FCPA enforcement efforts.” Lindsey Manufacturing Company was the first company to be tried and convicted with violating the FCPA.
Steve Lee is represented by Janet Levine of Crowell & Moring LLP.
The case was prosecuted by Fraud Section trial attorneys Jeffrey Goldberg and Nicola Mrazek and by Assistant U.S. Attorney Douglas Miller of Los Angeles.
This article has been updated to clarify that the judge ruled to tentatively dismiss the indictment with prejudice. The article originally stated the convictions were tentatively dismissed with prejudice