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Breaking: Lindsey and Lee Indictment Dismissed (Updated)

It was a long time coming, but justice has been done.

— Jan Handzlik, attorney for the Lindsey defendants


Federal District Judge Howard Matz on Tuesday dismissed with prejudice the indictment against Lindsey Manufacturing, Keith Lindsey, and Steve K. Lee, ending the prosecution of one of the biggest FCPA cases ever.

The judge in Los Angeles said government misconduct ‘included providing false information to obtain a search warrant, making unauthorized searches, and providing incorrect testimony to a grand jury,’ according to Bloomberg’s report.

The Lindsey defendants and Lee were each convicted by a federal jury in May of conspiracy to violate the Foreign Corrupt Practices Act and five substantive FCPA offenses.

The government said they paid millions in bribes to Nestor Moreno, an official at the Mexican state-owned electric utility Comisión Federal de Electridad, in exchange for contracts.

Following Tuesday’s hearing, Jan Handzlik told the FCPA Blog: “In the 38-page tentative order provided to the parties today, Judge Matz said the convictions should be thrown out and the indictment dismissed with prejudice. The judge told the parties he would make some revisions to the tentative order and enter the final order tomorrow.”

A dismissal of the indictment with prejudice means the defendants cannot be tried again for the same offenses. If the judge’s final order is consistent with the tentative order, the government’s only option will be to appeal the dismissal to the Ninth Circuit Court of Appeals.

Another defendant in the case, Angela Aguilar, a Mexican citizen, was convicted of conspiracy to launder money. Her husband, Enrique Faustino Aguilar Noriega, of Cuernavaca, Mexico, was charged in a seven-count indictment with conspiracy to violate the Foreign Corrupt Practices Act, four substantive FCPA violations, money laundering conspiracy, and money laundering. He’s a fugitive in Mexico.

After her conviction, Aguilar accepted a sentencing deal with the DOJ. It called for time served (about nine months in custody without bail since her arrest in Houston), a probationary sentence, immediate release from prison and return to Mexico, and no fine, but she agreed not to contest the government’s seizure of about $3 million in family assets.

The Lindsey and Lee defendants had argued that prosecutors ‘engaged in a course of misconduct that was both flagrant and prejudicial.’

In July, Lindsey defense counsel Handzlik told us: “Individually, several of these transgressions [by the prosecutors] would justify dismissal. Considered on a cumulative basis, however, the unfairly prejudicial impact of this conduct was extraordinarily damaging.”

Judge A. Howard Matz presided over the case — 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.

Jan L. Handzlik of Venable defended Lindsey Manufacturing and Dr. Keith Lindsey. Steve K. Lee was represented by Janet Levine of Crowell & Moring.

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  1. Is there an adequate remedy for Dr.Keith Lindsey, Stephen Lee and Lindsey Manufacturing for the humiliation, the emotional distress, for the business and financial losses inflicted by the egregious governmental misconduct in this case? Was the hurried plea deal, including the three million dollar forfeiture, between Angela Auguilar and the DOJ motivated in part, with the DOJ's knowledge that the Lindsey case was on slippery footing and the probability was high that it would be dismissed with prejudice. Will the DOJ seek reindictment of Enrique Auguilar Noriega? Will the DOJ continue to follow a path of abusive behavior by filing an appeal To the Ninth Circuit Court of Appeals?

  2. Let's not forget that the defendants were convicted at trial: 12 people unanimously decided they were guilty beyond a reasonable doubt. Having been a prosecutor, I can tell you that meeting that burden of proof ain't easy.

    The mistakes that were made were just that, mistakes. And, frankly, having read the motion to dismiss, response, and related filings, the mistakes were pretty minor. Even the Judge recognized this by asking whether the <i>aggregation</i> of mistakes was a problem. The Judge evidently felt that they did, and dismissed the case. Pretty strong.

    Before we decide whether the DOJ has an appealable issue, why don't we wait until we actually read the judge's decision, which hasn't even been entered yet?

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