Forfeiture Means Financial Ruin

Even if FCPA defendants win acquittals on nine out of ten counts, but lose just one, the single conviction can support a forfeiture order. While their lawyer is celebrating victory, the defendants can be stripped of everything they own — cash, houses, cars, pension assets, art, jewelry, timeshares, boats, you name it.

How many FCPA defendants — particularly those with a family — can risk that sort of ruin? That’s why most would view a plea bargain with the DOJ as the only sensible option. Even, perhaps, if they’re innocent.

The government doesn’t always include a criminal forfeiture count in an FCPA-related indictment. It didn’t with the six CCI defendants. But it did with Jeffrey Tesler and Wojciech Chodan, and with Enrique Faustino Aguilar Noriega and his wife, Angela Maria Gomez Aguilar. Another married couple, Gerald and Patricia Green, faced a forfieture count and lost everything.

The forfeiture statutes — 18 U.S.C. § 1956(c)(7), 28 U.S.C. § 2461(c), and 18 U.S.C. § 981 — create a complex, interlocking web. But in simple terms, any assets derived from proceeds traceable to a violation of the FCPA, or a conspiracy to violate the FCPA, can be forfeited. See .

Criminal forfeiture is intended to punish convicted defendants. It also rewards law enforcement agencies. The U.S. Marshals Service says, “The proceeds from the sale of forfeited assets such as real property, vehicles, businesses, financial instruments, vessels, aircraft and jewelry are deposited into the AFF [DOJ Assets Forfeiture Fund] and are subsequently used to further law enforcement initiatives.” The Marshals now have around $2 billion in forfeited assets under management.

Once there’s a criminal conviction in a case with a forfeiture count, there’s not much the defendant can do. The Legal Information Institute says:

The nature of the proceeding assures that the defendant is protected by the procedural rights embodied in the Fourth and Fifth Amendment. The property must be identified in the indictment in order to serve notice to the defendant, and opportunity must be given to contest the forfeiture.  Although the [criminal] conviction requires the government to prove guilt “beyond a reasonable doubt,” the forfeiture is subject to a lower burden–preponderance of the evidence.  Furthermore, the burden shifts to the defendant once the government shows that the defendant acquired the property around the time of the crime, and no other likely source existed.

Gerald and Patricia Greens lost a forfeiture count based on $13 million in revenue they received from tainted contracts to produce the Bangkok Film Festival. Jeffrey Tesler and Wojciech Chodan, still in the U.K. and fighting extradition, face a forfeiture count for $132 million — the amount of bribes to Nigerian government officials they’re alleged to have paid or arranged on behalf of KBR and its TSKJ partners.