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No Hollywood Ending

An LA jury needed not days but hours to convict the husband-and-wife movie producers of violating the Foreign Corrupt Practices Act. They were also found guilty on related charges, including conspiracy, money laundering, and tax cheating. Gerald Green, 77, and Patricia, 52, are facing at least ten years behind bars and maybe a lot more for bribing a Thai official in exchange for contracts to produce the Bangkok Film Festival.

The trial’s tragic outcome shouldn’t surprise anyone. There hasn’t been an acquittal in an FCPA prosecution since 1991. Not one. That’s why comments from Patricia Green’s lawyer are hard to understand. Marilyn Bednarski told the LA Times here, “To me it’s a case of circumstantial evidence . . . the people of Thailand were not victimized in any way” because the Greens provided “top notch services.” Really?

Gerald Green’s lawyer, Jerome Mooney, was more in touch. The DOJ used the case, he said, partly to send a warning to the entertainment industry: clean up the way you deal with “community relations” in foreign countries, or else. “We understand the government taking a shot across the bow of Hollywood,” Mooney said. “We just wish the shell hadn’t landed on our clients’ boat.”

From the convictions this year of the Greens, Frederic Bourke and William Jefferson, and those from prior years of David Kay, Douglas Murphy and David Mead, and all the prosecutions and guilty pleas in between, here are some things that every FCPA defendant should keep in mind before their trial starts:

Juries hate graft. FCPA cases are about bribes to corrupt foreign officials. They’re about sophisticated and often wealthy people looking for shortcuts, hoping to subvert foreign governments for personal or corporate gain. Wheeling and dealing in exotic places. Flashing cash and pulling strings. Juries lap it up. As we’ve said before, 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. And they’ll convict.

There are clouds of witnesses. Forget lone wolves and rogue employees. Foreign bribery is usually a team effort. When the government gets a whiff of the plot, it hauls in everyone — from those who might have had a hand in it to anyone who could have overheard talk at the water cooler. If it’s early in the investigation, the bit players can be persuaded to turn, to become the government’s cooperating witnesses or confidential informants. Supporting actors are given immunity or offered the hope of lighter sentences. So they sing about their bosses, colleagues, friends. They have extra incentive if they blame the aforementioned for dragging them into the criminal activity.

Evidence is everywhere. Bribes have to be planned, funded, paid, and covered up. There’s always someone on the receiving end, so the complications multiply. It all takes a lot of work and usually leaves behind a trail that’s easy to find and follow. Phony contracts and dummy invoices, hot money bouncing from bank to bank, fake agents and distributors, shell companies as fronts, two sets of books, and so on.

Show and tell. These days the government is likely to show up for trial with audio tapes of the accused discussing the bribes or videos showing the actual handover of cash. “Wearing a wire” once meant strapping to your torso an awkward piece of electronic gear the size of a croissant. Not any more. A cell phone on the table can be an open mic. A spy pen in the breast pocket can capture or broadcast sound and pictures. Scary stuff. And once the feds have tapes, they may not even need the cooperating witnesses or informants at the trial.

Related charges a-plenty. In foreign bribery cases, the government might start with FCPA charges. But remember: bribes to foreign officials need to be planned, funded, paid, and covered up. So there’s usually a conspiracy, money laundering, traveling to commit the offense, fraud and obstruction in the cover-up, and tax-cheating to boot. What a mess. The government can throw a lot of mud at the wall. If some doesn’t stick, so what? Prosecutors can drop weak charges later and plow ahead with the rest.

Examples: Frederic Bourke was convicted of conspiracy to violate the FCPA and a Travel Act offense, but not the FCPA itself. William Jefferson was acquitted of a substantive FCPA charge but found guilty of conspiracy to violate the FCPA, soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes. Gerald Green beat the obstruction rap — the government ended up dropping the charge — but he and his wife were convicted of conspiracy to violate the FCPA, eight violations of the FCPA and seven counts of money laundering. Mrs. Green was also found guilty of two counts of falsely subscribing a U.S. tax return.

Not everyone accused of violating the FCPA is guilty. And certainly those accused and awaiting trial are presumed innocent unless and until found guilty in a court of law. But with no acquittals in an FCPA trial since 1991, defendants and their counsel should have their eyes wide open about their chances in court.

View prior posts about the Greens here.

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