The former Magyar Telekom executives have refused to testify until they are no longer at risk of criminal prosecution.
Foreign bribery charges were unsealed against Joseph Sigelman in January.
In a significant win for the Department of Justice (“DOJ”), the U.S. Court of Appeals for the Eleventh Circuit adopted the DOJ’s broad interpretation of the term “foreign official” under the Foreign Corrupt Practices Act (“FCPA”). The Eleventh Circuit’s decision in United States v. Esquenazi is the first appellate court interpretation of the meaning of “foreign official.” The unanimous panel rejected the defendants’ argument in favor of a limited definition and, instead, adopted the DOJ’s position that “fact-bound questions” must be answered on a case-by-case basis to determine whether a state-owned or state-controlled enterprise is an instrumentality of a foreign government such that its employees are foreign officials.
On those rare occasions in which a U.S. business is confronted with the possibility of making a payment to a foreign official that is unrelated to the official’s government service, there is an understandable temptation to reject the payment and run in the opposite direction. In some cases, however, that is a very unattractive option. For example, if the foreign official is owed some amount as a result of his prior interest in the foreign subsidiary of the U.S. business and he is assuming a minister-level position in another country’s central monetary and banking agency, the U.S. business will be motivated to make the payment while navigating the FCPA-related obstacles associated with the situation.
An archaic World War II statute designed to give the federal government extra time to prosecute crimes during times of war – on the theory that the government is too preoccupied with the “rush of the war activities” – has recently reared its head in the context of False Claims Act qui tam actions for the first time in over 50 years. The dramatic and far-reaching consequences of such a tolling of the limitations period for False Claims Act lawsuits have brought renewed attention to this peculiar statute, which seems out of place in an era when the United States fights wars in an entirely different fashion.
But U.S. District Court Judge Richard J. Sullivan also said he would try to accommodate both sides after the former Magyar Telekom executives said DOJ declination letters don’t rule out their prosecution on foreign bribery allegations.
Marubeni pleaded guilty in March to working with Alstom to bribe Indonesian officials.
Lawrence Hoskins was arrested in the Virgin Islands in April.
The case was notable because the judge upheld the Security and Exchange Commission’s contested rule that whistleblowers are protected from retaliation by Dodd-Frank even if they do not make their report of possible wrongdoing to the commission.
The allegations against the New York-based hedge fund are another indication of the growing risk of follow-on litigation that companies face when they fail to sufficiently disclose FCPA investigations.
Han Yong Kim wants a new hearing after a three-judge appeals court panel last month denied his petition to challenge a foreign bribery indictment while remaining outside U.S. jurisdiction.
The son of the ruler of Equatorial Guinea cancelled his scheduled deposition in Washington, D.C., last month; a judge ruled he isn’t required to travel to the U.S. for it.
Facing emboldened whistleblowers, companies that leave misleading impressions in Foreign Corrupt Practices Act securities filing disclosures face heightened risks.
Hiring practices by banks in China have been under scrutiny by the U.S. government for possibly violating the FCPA.
Details from Rio Tinto’s civil suit in New York depict the Brazilian mining company conspiring with Beny Steinmetz Group Resources Ltd. to steal a valuable iron ore concession in Guinea.
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