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Bourke’s Verdict: Only In America

Here’s what struck us. That nowhere else would Frederic Bourke have been prosecuted on the facts of his case. A few other countries have taken small steps to fight overseas corruption — Germany, the U.K., Japan. But Friday’s verdict showed again that no country comes close to America’s ferocity in punishing bribery abroad. We’re not arguing now if that’s good or bad. We’re just wondering how Bourke came to be convicted of two felonies.

His crime? Investing in a deal in a far-off country where he knew or should have known that bribes would be paid. Prosecutors said he stuck his head in the sand. He didn’t pay any bribes himself and in the end he didn’t benefit from them. The bribes didn’t work and he and the other investors lost their money. But he stuck his head in the sand and the price for that, he learned Friday, is up to five years in prison, and another five for lying to the FBI about what went on.

All criminal defendants try to portray themselves as victims. In Bourke’s case it was true. He was prosecuted for conspiracy but his alleged co-conspirator, Viktor Kozeny, wasn’t in the courtroom — he’s a fugitive living in the Bahamas. The State of New York indicted him years ago for stealing $182 million from his investors, including $8 million from Bourke.

After he realized Kozeny had stolen his money, the story goes, Bourke blew the whistle — complaining first to the president of Azerbaijan and then to law enforcement agencies in the U.S. They believed him. Kozeny was charged in New York with fraud. But the DOJ indicted Bourke anyway. They said he was knowingly part of Kozeny’s bribe-tainted deal, and losing his money didn’t excuse his crime.

The jurors said they felt sympathy for Bourke. But on the charges against him they didn’t split hairs. Most juries in white collar criminal cases don’t. As the foreman said after the verdict: “It was Kozeny, it was Azerbaijan, it was a foreign country. We thought [Bourke] knew [about the bribery] and definitely could have known. He’s an investor. It’s his job to know.” Simple, logical, workman-like. Very American.
In retrospect, Friday’s verdict was no surprise. Whether Bourke grasped it or not, his prospects were bleak from the moment of his indictment. Most FCPA-related defendants before him had plea-bargained to reduce their jail time. Of the few who’d gone to trial since 1991, none had been acquitted. None.
Still, the Justice Department had gambled some. It stretched the law in a new way to reach Bourke. He hadn’t paid any bribes, after all. What he did was invest in a too-good-to-be-true deal and then stick his head in the sand, prosecutors said, hoping for a windfall in that far-off land. Instead he lost his money and fell into the pit of the toughest overseas anti-corruption regime the world has ever seen.
For Frederic Bourke, it’s a crushing result. For the rest of us, it’s a warning that becoming a criminal can be frighteningly easy. Almost accidental.
Coming up: The “knowing” standard.
Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.
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