Around The Horn

He wasn’t kidding. Last week’s record-setting indictment under the Foreign Corrupt Practices Act of six individuals from one company highlights the Justice Department’s strategy to target people, not just companies. In September last year, Mark Mendelsohn — the DOJ official responsible for FCPA criminal prosecutions — told an audience: The number of individual prosecutions has risen – and that’s not an accident. That is quite intentional on the part of the Department. It is our view that to have a credible deterrent effect, people have to go to jail. People have to be prosecuted where appropriate. This is a federal crime. This is not fun and games. See our post here.

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Victims Rights? Congress didn’t want prosecutors deciding American foreign policy through FCPA enforcement actions, so bribe-taking foreign officials aren’t targeted. Taking that a step further, the names of bribe-takers don’t even appear in FCPA complaints. That censorship may make foreign-policy sense, but it’s got people in Nigeria upset and frustrated. They want to hear from the Justice Department which of their officials took any of the $182 million in bribes that KBR admitted paying, and where the money is now. Reports are here and here.

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Ask him. Prosecutors think Jeffrey Tesler knows who got KBR’s bribe money. They allege he’s the middleman who was spreading it around. Tesler, 60, a London lawyer, was indicted in February for violating the FCPA. He now faces up to 55 years in prison. British police arrested him in March at the request of U.S. authorities. Last week, Tesler appeared at his first extradition hearing. The London Magistrates’ Court released him on bail and continued the proceedings. Here’s a press report.

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An open and shut case. Aluminum Bahrain’s federal civil suit in Pittsburgh against Alcoa alleging behavior that would violate the FCPA appears in the docket as “Closed.” But not really. The court’s order from March 2008 says, “To allow the Government to fully conduct an investigation without the interference and distraction of ongoing civil litigation, it is ordered that this case is administratively closed, to be reopened at the close of the Government’s investigation.” We talked about the Justice Department’s intervention in the case here.

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Where’s Clayton? Regarding our post yesterday about Frederic Bourke (here), a reader asked, What’s happened to Clayton Lewis? He worked for Omega Advisors Inc. It invested and lost more than $100 million with Viktor Kozeny in the failed Azeri privatization program. The government said Lewis knew about the bribery scheme allegedly involving Kozeny and Bourke but went ahead with Omega’s investment anyway. In 2004, Lewis pleaded guilty to onspiring to violate the FCPA. Where’s he now? Still waiting to be sentenced. Almost everything in his court record is sealed. But a June 2008 letter from the DOJ said Lewis is a cooperating witness and shouldn’t be sentenced until he’s testified for the government at Bourke’s trial. A copy of the letter can be downloaded here.

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Ashes to ashes? It’s off our topic, but creepy. Two Los Angeles-area women allegedly cheated life insurance companies out of at least $750,000 by staging funerals for fictitious people. Last Wednesday, FBI agents arrested Faye Shilling, 60, and Jean Crump, 67, on federal fraud charges. According to the indictment, Shilling, a phlebotomist (a medical technician who collects blood), and Crump, an employee at a now-defunct Long Beach mortuary, cashed in life insurance policies for non-existent people they claimed had died. They allegedly obtained bogus death certificates, purchased burial plots and staged phony funerals to lend credibility to the scheme. When staging the funerals, the women allegedly “filled caskets with various materials” to make it appear they contained actual corpses. The DOJ’s release is here.

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Real magic. What is it about Augusta that makes it so special? And this year was the final appearance of three-time champ Gary Player, 73. He showed up 52 times! Our favorite golf story: Gary Player was still on the practice tee, long after sunset, hitting balls. Buckets of them. Someone watching said, “I’d give anything to play golf like that man.” Player looked up and said, “Would you really?” And he held out his hands to show the onlooker two bloody, torn-up palms.

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A community effort. Our thanks again to everyone who contributes time and resources to the FCPA Blog. We’re thinking of our readers who send suggestions, tips, clips and encouragement. And those who order Bribery Abroad — sometimes by the dozen. And our wonderful sponsors who stand shoulder-to-shoulder with us every day.
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