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Mega-Bust Is Only The Beginning

The shot-show arrests (see our posts here) have raised lots of questions about FCPA enforcement and prosecution. In a post here, for example, we wondered if the government’s argument that the 22 defendants were part of a single conspiracy might open the door for the entrapment defense, particularly because some defense counsel in the case have said their clients didn’t know each other.

Law professor Dru StevensonIn response, Dru Stevenson, a professor at the South Texas College of Law, said it wasn’t entrapment but maybe an “overdone” conspiracy charge. He wrote:

” . . . The federal courts use the ‘subjective’ rule for entrapment, which focuses on the defendant’s predisposition and not on the government’s conduct. It does not matter if the ‘conspiracy’ itself was really a huge sting operation — each conspirator can still be guilty of conspiring with the government agent(s). Entrapment always has a sting operation as its origin, but most sting operations — even grandiose ones — do not run afoul of the rules for entrapment or provide the basis for the defense. . . .

“Regarding conspiracies, courts have upheld them where the members of the conspiracy did not know how big the conspiracy was or who all the other members were (in fact, most criminal conspiracies keep all the members on a ‘need to know’ basis so they can’t rat out all the others if they bail out on the plot). On the other hand, courts have refused to entertain conspiracy charges where there was really one criminal making dirty deals with lots of criminal clients. Each person might be guilty of a conspiracy regarding the single transaction in which they participated, but not the transactions of others, unless it was reasonably apparent that their transaction was merely part of a larger scheme.”

His full comment is here.

Michael Volkov, a former federal prosecutor and now a white-collar criminal defense lawyer at Dickinson Wright’s Washington, D.C. office, thinks the entrapment defense might appear. He also talked about the government’s FCPA investigation techniques and trial tactics.

He said:Michael Volkov: Former Assistant U.S Attorney and current white-collar criminal defense lawyer

“You mentioned in one entry the fact that the FBI undercover posed as a foreign official and was not an actual foreign official. While there is no caselaw directly on point, one thing is clear — undercover agents can pose as persons for purposes of a violation — e.g. an FBI agent acting as a minor, under 14 on the internet, for purposes of criminal solicitation etc. I suspect that principle will carry the day.

“I am much more interested, as a defense counsel, in the decision to prosecute the cases in D.C., where entrapment defenses normally get more traction. On the other hand, given the nature of the defendants and their origin, D.C. juries are less sympathetic. But my understanding of D.C. juries (based on 17 years as AUSA) is that they have difficulty understanding the instruction, thinking it means only ‘trapped’ as opposed to the legal definition of ‘entrapped.’

“Finally, the most important aspect of this case is that DOJ and the FBI have now decided to use traditional law enforcement techniques typically reserved for drug traffickers, gang members and terrorists. Under these circumstances, I would expect the government to use a wiretap, undercover officers, etc, as they try to bring in more and more defendants. This is just the beginning and compliance will be incredibly important for corporate defendants — big and small.”

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