In the indictment against the Lindsey defendants who were convicted in May of FCPA violations, the government included a forfeiture count.
The government asked for Lindsey Manufacturing, CEO Keith Lindsey, and CFO Steve Lee to forfeit all property “traceable” to their FCPA offenses — or a money judgment of an equivalent amount. How much would that be? Potentially millions, according to the indictment, which lists at least $5 million in alleged bribes paid from Lindsey to its Mexican sales agent, and onward to a Mexican official.
At the post-trial hearing before Judge Matz in Los Angeles on June 27, when he learned of the government’s failure to turn over a grand jury transcript with testimony of FBI agent Susan Guernsey, prosecutors also had enforcement of the forfeiture count on their agenda.
They had planned that day to ask Judge Matz for a money judgement against Lindsey Manufacturing for the millions alleged in the indictment. Had that happened, Lindsey’s future would have been in doubt, or worse.
But when Judge Matz heard that the government had violated his order to turn over all of Agent Guernsey’s grand jury transcripts, he first vacated the defendants’ sentencing date. Then, at the request of Jan Handzlik, lawyer for Lindsey Manufacturing and its CEO, Dr. Keith Lindsey, Judge Matz also put a stop to the government’s motion for a money judgment on the forfeiture count.
[T]here’s no way,” Judge Matz said, “that I’m going to do anything that’s going to lead to forfeiture or money judgments until this is sorted through and ruled on . . . . “
Normally, forfeitures are entered routinely as soon as a guilty verdict is in, even before appeals are exhausted. But not in this case.
The money judgment on the forfeiture against the Lindsey defendants is on hold, at least until the September 8 hearing on their motion to dismiss.
“This case is far from over,” said Lindsey defense counsel Jan Handzlik. “A freeze of Lindsey’s assets now would have been devastating. This small, family-owned company is one-of-a-kind, the only U.S. company making these products. It has vendors to pay, raw materials to buy, and unique products to manufacture and ship. The government should seek to preserve companies like Lindsey, not destroy them.”
The biggest forfeiture order in an FCPA case came in March this year against Jeffrey Tesler, one-time middleman for KBR and its partners in the TSKJ Nigeria consortium. In his plea deal with the DOJ he agreed to forfeit $148,964,568.67 — cash he held in about a dozen bank accounts.
After losing a forfeiture count, Gerald and Patricia Green were left indigent. They each owe the government $1,049,465, plus their shares in their company, Artist Design Corp., and its pension plan. The feds are also seizing their West Hollywood home later this summer. They now have court-appointed lawyers for appeals the government filed against their six-month jail sentences.
The case is styled U.S. v. Noriega et al, U.S. District Court, Central District of California (Western Division – Los Angeles), Case #: 2:10-cr-01031-AHM-4.
Download a copy of the first superseding indictment here.