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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Second Thoughts About The Second Sting Trial

Another group of defendants went on trial this week in federal court in the District of Columbia in the Africa sting case.

Patrick Caldwell, John Mushriqui, Jeana Mushriqui, Stephen Giordanella, John Godsey, and Marc Morales each face one count of conspiracy to violate the FCPA. Except for Giordanella, they also face multiple substantive FCPA counts. And the government has included a forfeiture count against all of them.

*     *     *

Twenty two individuals were charged in the case. All but one were arrested early last year while attending a trade show in Las Vegas. Three have pleaded guilty.

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The trial of four other defendants charged in the case — Pankesh Patel, Andrew Bigelow, John Benson Weir, and Lee Allen Tolleson — ended in a mistrial in July when the jury was deadlocked after five days of deliberations.

*      *     *

During a three-year undercover operation, FBI agents posed as representatives of the president of Gabon. The DOJ alleges the defendants conspired to pay bribes to the phony government officials to win contracts to supply ammunition and body armor to the country’s presidential guard.

Richard Bistrong, the DOJ’s cooperating witness, introduced the undercover FBI team to his friends and colleagues in the military and police equipment industry. Bistrong had already pleaded guilty to unrelated FCPA violations and has been trying to earn a lighter sentence.

Although they’re all on trial for being part of a common conspiracy, some defendants have said they didn’t even know each other and were brought together by Bistrong.

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In Mike Koehler’s Congressional testimony last year about FCPA enforcement, he described this case and some others involving multiple individual defendants as ‘manufactured.’

He said:

Prosecuting individuals is a key to achieving deterrence in the FCPA context and should thus be a ‘cornerstone´ of the DOJ’s FCPA enforcement program. However, the answer is not to manufacture cases or to prosecute individuals based on legal interpretations contrary to the intent of Congress in enacting the FCPA while at the same time failing to prosecute individuals in connection with the most egregious cases of corporate bribery.

As we said after the mistrial of the first four sting defendants, the feds never needed to use their bag of tricks to dig up FCPA defendants.

‘There are plenty of real targets out there,’ we said, ‘and they’re easy to find. Just listen to the whistleblowers. Or look inside Tyson Foods, Siemens, BAE, Daimler, and dozens of other companies that have admitted violating the FCPA, paid big fines, but produced no individual FCPA defendants.’

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An account this week in the Blog of the Legal Times said prosecutor Laura Perkins referred to the sting defendants as ‘savvy business people’ who knew what they were doing and deserve to be punished.

Is that true?

In July, a law enforcement officer told us many of the defendants and their companies were ‘so small or regional that I haven’t heard of them.’ He thought any juror would wonder why the government is trying to get rid of some of the same ‘hardworking’ people who supported America’s wars in Iraq and Afghanistan by providing equipment for the troops.

Good question.

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