Judge Shira Scheindlin has now decided most of the pending pre-trial issues in the Foreign Corrupt Practices Act prosecution of Frederic Bourke. Her rulings generally restrict the government’s use of other-acts-type evidence, while allowing Bourke latitude to tell his story. He’s charged with investing in Viktor Kozeny’s 1998 attempt to take over Azerbaijan’s state oil company — despite knowing Kozeny planned to bribe Azeri officials to get the deal done.
Bourke’s trial starts Monday in Manhattan. He faces up to 35 years in prison on the FCPA charges, money laundering and lying to federal investigators. Kozeny himself is a fugitive living in the Bahamas.
Here are some of the rulings from hearings held last week and Tuesday:
- The judge excluded evidence relating to prostitutes and injections, saying it’s too prejudicial to Bourke. Prosecutors had planned to show that Bourke, 62, thought his partner in their luxury handbag business was secretly trying to inject him with a “harmful substance.” Prosecutors had also wanted to show how Kozeny and Bourke picked up two prostitutes in Russia in 1997, traveled with them aboard Kozeny’s private plane to Baku, Azerbaijan, then back to Moscow. See our post The Bourke Files: Poison And Prostitutes.
- Bourke can present a forensic accountant as part of his effort to interpret Kozeny’s financial transactions for the jury. He’s maintained that he invested with Kozeny only after lawyers advised him the deal didn’t violate any laws. But soon after investing, he said, he suspected illegal behavior and became a whistleblower. He testified before a state grand jury as one of Kozeny’s victims. In 2003, New York prosecutors charged Kozeny with fraud for keeping $182 million of his investors’ money. See our post Lies Kickbacks And Other Crimes.
- Kozeny’s Swiss lawyer Hans Bodmer can be cross-examined by the defense about his former clients. He created the corporate entities and trust accounts Kozeny used to make his investments in Azerbaijan. Bodmer was indicted by a New York federal grand jury in August 2003 on single counts of conspiracy to violate the FCPA and to launder money. He eventually pleaded guilty to the money-laundering charge. Bourke’s lawyers have argued that Bodmer also helped Kozeny pay kickbacks to Clayton Lewis and defraud other investors. See Lies Kickbacks And Other Crimes.
- Prosecutors can offer a witness to testify about Azeri corruption in general (that would be Rajan Menon) and about Kozeny in particular. The government wants to show that Bourke should have been on notice of the likelihood of bribery and wouldn’t have invested in a place like Azerbaijan unless he knew the fix was in. See our post Bourke v. The Professor.
Three government witnesses — Thomas Farrell, Clayton Lewis and Hans Bodmer — have all pleaded guilty to federal felony offenses related to the case. They’ll be sentenced after they testify against Bourke. Until then, they’re under the supervision of the U.S. Probation and Pretrial Services System. Among other things, that agency — part of the U.S. federal courts — prepares all pre-sentencing reports.
The “credibility, motive and bias” of the three cooperating witnesses will be an issue at the trial, Judge Scheindlin said. She ordered Pretrial Services to deliver their files on Farrell, Lewis and Bodmer to her courtroom “forthwith.” She presumably wants the files on hand to make sure the prosecution has disclosed to Bourke everything pertinent about the three convicted witnesses and the circumstances of their testimony.
Judge Scheindlin has allotted six weeks for the trial.
We’re grateful for the substantial help we’ve had from a friend in New York City for this and other posts about U.S. v. Kozeny.
Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.