A report yesterday from Dow Jones said the United States has dropped its sputtering prosecution of David B. Pinkerton on charges of conspiring to violate the Foreign Corrupt Practices Act.
The government had alleged that in June 1998, as the head of AIG Global Investment Corp., Pinkerton invested about $15 million of AIG’s money in a consortium headed by Victor Kozeny — with the understanding that Kozeny was bribing Azeri officials to ensure the privatization of the State Oil Company of the Republic of Azerbaijan (SOCAR).
Prosecutors last year suffered a double setback in the case. In June 2007, a federal district court in Manhattan dismissed all FCPA and related counts against Kozeny, Pinkerton and their co-defendant, Frederic Bourke, Jr. The court said the FCPA’s five-year statute of limitations had already expired. The government appealed, but then in October the Bahamas Supreme Court ruled against Kozeny’s extradition, refusing to order his return to the U.S. to face trial. He’s from the Czech Republic and reportedly has Irish citizenship, but he’s been living in the Bahamas for more than a decade.
Dow Jones said U.S. District Judge Shira A. Scheindlin’s order of nolle prosequi dismissing the charges against Pinkerton was signed but hadn’t yet appeared in the court’s public electronic filing system. The report continued,
In the nolle prosequi request – a copy of which was reviewed by Dow Jones Newswires – Assistant U.S. Attorney Jonathan Abernethy wrote, “Based upon a review of the evidence and information pertaining to this defendant acquired since the filing of the indictment, the government concluded that further prosecution of David Pinkerton in this case would not be in the interest of justice.”
No word yet on whether the government will also drop its case against Bourke.
Prosecutors obtained a related conviction in February 2004. Clayton Lewis, a former employee of Omega Advisors, Inc., pleaded guilty to conspiring to violate the FCPA. Then in July 2007, Omega itself settled with the government, entering into a non-prosecution agreement with the DOJ and agreeing to a civil forfeiture of $500,000. As the Justice Department noted then, Omega invested more than $100 million with Kozeny in 1998 for the Azeri privatization program. But the program fizzled and Omega lost its entire investment.