CCI did it. So did Nexus Technologies, Nam Nguyen, Kim Nguyen, and An Nguyen. And now Flavio Ricotti has done it too.
They’ve all pleaded guilty in FCPA cases to violating or conspiring to violate the Travel Act.
And let’s not forget Fredrick Bourke. A federal jury convicted him of conspiring to violate both the FCPA and the Travel Act.
The what? We’ve talked about the Travel Act before. But because it’s now a big deal in FCPA-related cases, let’s have another go.
As the name suggests, the Travel Act (18 U.S. C. §1952) prohibits traveling between states or countries or using an interstate facility in aid of any crime, and carries a 5-year jail 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.
State law? Right. Which means the Travel Act can be used, as it was in the CCI cases, to prosecute companies and individuals for bribing private parties. The FCPA only applies to bribes to foreign officals. But some state laws prohibit bribery to private parties. And that’s also enough to support a Travel Act charge in a federal prosecution.
For example, in the cases of CCI and some of its ex-employees, the federal government alleged they violated or conspired to violate 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. In their federal indictments, the Travel Act charges alleged violations of California’s anti-corruption law, including bribes paid overseas to private parties.
This wasn’t a brand new approach by the DOJ. But until the past couple of years, there wasn’t much history of Travel Act charges in FCPA cases.
In 2004, two former Health South executives, Robert Thompson and James Reilly, were indicted for Travel Act and FCPA books and records violations. The next year, a jury acquitted them of all charges.
And according to the FCPA Digest, the Travel Act was mentioned in a couple of cases in the 1990s as a predicate act in RICO cases that also involved FCPA violations. The cases involved Young & Rubicam and Ashland Oil.
But now, with the Travel Act popping up in more FCPA-related cases, those responsbile for compliance might want to check their programs, looking out not only for the FCPA but also applicable state anti-corruption laws, including those that might apply to private overseas bribery.