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Carson Case Tests The Travel Act

A hearing on Friday this week might influence whether the DOJ will keep using Travel Act counts in FCPA-related prosecutions.

The Carson defendants are charged under both the FCPA and the Travel Act.

The Travel Act (18 U.S. C. §1952) prohibits traveling between states or using an interstate facility in aid of any crime, and carries a 5-year prison sentence for most offenses. The underlying crime doesn’t have to be a federal offense, such as an FCPA violation. Traveling around or using the mails to violate a state law can also trigger a Travel Act violation.

For their Travel Act counts, the Carson defendants are accused of violating California’s anti-bribery law (California Penal Code section 641.3). It bans corrupt payments anywhere of more than $1,000 between any two persons, including private commercial parties.

The government alleged the Carson defendants paid bribes overseas to foreign officials and private parties — both prohibited, the government said, under California law. (The FCPA only reaches bribes to foreign officials.)

In a motion to dismiss the Travel Act counts, the Carson defendants argued:

First, that the Travel Act doesn’t apply extraterritoriality — that is, to conduct outside the United States.

Second, their alleged conduct doesn’t violate California’s commercial bribery statute.

Third, the Travel Act and the California commercial bribery statute are unconstitutionally vague and violate due process because the defendants had no fair notice that the laws would reach the alleged conduct.

And fourth, the Travel Act counts fail to allege an essential element – namely, an act following the travel or use of interstate facilities in furtherance of the promotion of California commercial bribery.

The government’s reply addressed each point the defendants raised.

The DOJ has been using Travel Act counts more often in FCPA prosecutions. This is apparently the first test of the statute in an FCPA-related case.

Download the government’s brief in opposition to the defendants’ motion to dismiss here.

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