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U.S. v. Green, Take One

Two weeks from now, in a Los Angeles federal district court, the husband-and-wife Hollywood movie producers charged with violating the U.S. Foreign Corrupt Practices Act will go on trial. Gerald and Patricia Green were arrested last December and are out on bail. They’re accused of bribing a Thai government official with kickbacks of more than $1.7 million in exchange for a film festival contract worth $10 million.

We’re not privy to the Greens’ defense, of course, but they appear to have a tough legal battle ahead of them. Here are some reasons why:

— CW-1 and CW-2. According to the FBI’s 28-page affidavit, at least two former insiders identified as Confidential Witnesses One and Two are giving evidence against the Greens, and it’s juicy. The FBI says the CWs prepared the budgets, arranged the meetings, wrote the checks and ran the bank accounts that are now at the center of the case. The government says it has physical evidence too. When the police raided the Greens’ office, among the goods seized was a spreadsheet showing the details of each kickback. And earlier in the investigation, FBI agents even jetted to Thailand to watch (and perhaps listen?) as Mr. Green met with the Thai government official to seal their allegedly corrupt deal. The Greens’ defense lawyers, it appears, will have an armory full of smoking guns to deal with at the trial.

— War on multiple fronts. In addition to the FCPA charges, the government might raise allegations of fraud and obstruction. That’s important because the elements of an FCPA offense can be complicated to prove. When prosecutors think they can obtain a conviction based on other charges, as they did in Oscar Wyatt’s trial, they’ll usually try to do that. Paragraph 12 of the FBI’s affidavit is a potential blueprint. It says, “The defendants attempted to conceal their bribery of the Thai official in a variety of ways, among other things, by: (a) employing different business entities, some with dummy business addresses and telephone numbers, in their dealings with the [Tourism Authority of Thailand] in order to hide the large amount of money they were being paid under the contracts; (b) making ‘commission’ payments to the Thai official through the foreign bank accounts of intermediaries; and (c) once the government’s investigation became known to the defendants, attempting to manufacture evidence in support of false, exculpatory explanations for the corrupt payments.”

— There’s something rotten in Denmark. The Greens’ story as the government is telling it sounds like an Elmore Leonard movie script. Here’s the pitch: A high-powered Hollywood couple befriend a Thai government official who controls a prestigious film festival in exotic Bangkok. She’s crooked, so she and the Greens hatch a plan. She’ll give them the exclusive no-bid right to promote the festival, and they’ll kick back a part of every dollar they make. Together the plotters create shell companies and phony invoices. They use borrowed bank accounts, and so much more. The plan works perfectly. But one day someone close to the Greens betrays them and calls the feds. It’s a great story, and that’s probably bad news for the Greens. Even if the government’s evidence isn’t rock solid on all the elements of an FCPA offense, the jury will still get the picture that people stepped over the line of acceptable business behavior. To understand the significance, consider what happened to poor David H. Mead, the former president of Saybolt Inc. In 1998, a jury in New Jersey convicted him of paying a $50,000 bribe to government officials in Panama in violation of the FCPA. Mead had admitted making the payment but pleaded not guilty. He only paid the bribe, he said, because the company’s outside lawyer assured him it could be done legally from Saybolt’s Dutch affiliate. So his defense was that he didn’t act “knowingly” to violate the FCPA, which the statute requires. His defense looked great on paper but the jury convicted him anyway. Why? Probably because they just didn’t want a $50,000 bribe to a corrupt government official in Panama to go unpunished. Will the government’s version of a similarly sordid tale in U.S. v. Green have the same effect on the jury?

— For better or for worse. Any time family members appear as co-defendants in a criminal case, the defense has a problem. The FBI affidavit separates Mrs. Green’s role from her husband’s somewhat by indicating that she was part of the conspiracy but less involved in the substantive FCPA violation. But just by bringing her into the case, the government is putting enormous pressure on Mr. Green. He’ll want to spare her a trial and possible jail time. And presumably Mrs. Green, who’s in her early 50s, will be desperately trying to keep her 75-year-old husband out of jail. Will these terrible worries convince the Greens either to cop a plea before trial or to shape their defense to save one of them from prison?

— Looking at the numbers. Perry Mason’s lucky clients were assured of a successful outcome in their criminal trials. But real-life FCPA defendants have fared much worse. Most accused individuals have plea bargained to avoid jail time — FCPA convictions carry a prison term of up to five years. Of the few people who’ve gone to trial since 1991, none have been acquitted. Dan Newcomb, in his invaluable 2007 FCPA Digest, sorts the numbers out this way: “Since, 1990, DOJ prosecutions under the FCPA against seventy-one individual defendants and corporations have been resolved. Of those seventy-one, forty-three were resolved through plea agreements. In only four of those cases was there a conviction after trial. In the cases where a plea was taken or a defendant was convicted, defendants were sentenced to a term in prison, fined, or both. Sentences have been imposed in 26 of those cases, and sentencing has been deferred in two others. Recently, the defendants in U.S. v. David Kay and Douglas Murphy received terms of 37 months and 63 months, respectively. In 1990, seven prosecutions ended in a dismissal of the charges. Since then, only one case (in 2004) has been dismissed. Also, during the years 1990 and 1991 there were five acquittals after trial. There have not been any since. In addition, at least four individuals have failed to appear in court to answer the charges against them.” There’s not much there to cheer the Greens as their trial date approaches.

View the FBI’s Affidavit here.

View the 2007 FCPA Digest here.

View prior posts about the Greens here.

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