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FCPA Conspiracy Theories

Enforcement actions by the DOJ against companies and individuals are often resolved by the defendant pleading guilty to a conspiracy count. We had assumed the DOJ used conspiracy instead of substantive FCPA offenses solely to give cooperating defendants a break.

But that might be wrong.

Pete from DC, a source of much FCPA knowledge, said a member of the DOJ’s FCPA enforcement team talked a few weeks ago about the conspiracy statute ( 18 U.S.C. § 371). The prosecutor said it’s sometimes used to avoid jurisdictional problems that come up with substantive FCPA charges.

For example, if an FCPA defendant is neither an issuer nor a domestic concern, establishing jurisdiction requires a territorial nexus. See 15 U.S.C. §§ 78dd-1(a), 78dd-2(a). But under the conspiracy statute, the territorial nexus doesn’t need to be proved.

Case in point, according to the DOJster, is Snamprogetti. In July, the Dutch unit of Italian parent company ENI agreed to pay a $240 million criminal fine after pleading guilty to one count of conspiracy to violate the FCPA and one count of aiding and abetting. The charges arose from Snamprogetti’s role in the TSKJ-Nigeria joint venture.

(Snamprogetti and ENI also agreed with the SEC to pay $125 million in disgorgement to settle civil charges that they violated the FCPA’s anti-bribery and recordkeeping and internal controls provisions in Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934 and Rule 13b2-1.)

Although Pete from DC didn’t mention it, we’ve said before that while the statute of limitations for substantive FCPA offenses is five years, the period for FCPA-related conspiracies can reach back to criminal behavior that’s much older. The U.S. Attorneys Criminal Resource Manual puts it this way

Conspiracy is a continuing offense. For statutes such as 18 U.S.C. § 371, which require an overt act in furtherance of the conspiracy, the statute of limitations begins to run on the date of the last overt act. See Fiswick v. United States, 329 U.S. 211 (1946); United States v. Butler, 792 F.2d 1528 (11th Cir. 1986).

Prosecutors might also use the conspiracy statute when their evidence of a substantive violation has gaps. Under U.S. v. Pinkerton, 328 U.S. 640 (1946), if a member of a criminal conspiracy does at least one overt act, then all of the members of the conspiracy are considered to have committed the crime (“the hand of one is the hand of all to the conspiracy”). That can make conspiracy charges easier to prove.

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Download the July 7, 2010 criminal information in U.S. v. Snamprogetti Netherlands B.V. here.

Download Snamprogetti’s July 7, 2010 deferred prosecution agreement here.

See our posts on jurisdiction here, and aiding and abetting here.

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1 Comment

  1. This is an important post, due to the abundant prosecutorial advantages of bringing conspiracy FCPA charges vis-a-vis substantive FCPA charges. We've seen this time and time again in major FCPA enforcement matters over the past several years. It would be interesting to find out who the DOJ prosecutor referenced by "Pete from DC" actually is. The Department typically doesn't advertise on the conspiracy issue, as this is one area (at least in terms of certain SOL and jurisdictional nuances) that could potentially make for a ripe judicial challenge, under the right circumstances. Whatever the case, the Snamprogetti matter is a fascinating example of FCPA conspiracy, but also a relatively complex one, as it involved both conspiracy and aiding and abetting charges. As the Information states, the Department alleged that employees and agents of Snamprogetti were causing wire transfers to be sent to US accounts in NY. As such, Snamprogetti may have been vulnerable to substantive FCPA jurisdiction, standing alone, under jurisdictiion established by the 1998 FCPA amendments for non-domestic concerns/issuers, as codified at 78dd-3 (although it appears that the Department had SOL concerns to contend with in the case, given the time frame of the bulk of the activity in question, which may have necessitated the conspiracy route). That aside, Snamprogetti also highights (or perhaps cautions) just how easy it can be for the Department to tack on an FCPA "aiding and abetting" charge in what is essentially a conspiracy enforcement action against a foreign, non-issuer (involved in a joint venture with a US domestic concern). As your fine Blog has noted on multiple occasions, an aider and abettor is punishable as a principal, meaning the entity is subject to the same FCPA penalties for the crime committed by its agent, as though the aider and abettor committed the crime itself. The case is loaded with academic and practical FCPA nuggets!


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