The government today asked Judge Richard Leon to dismiss with prejudice all remaining indictments in the biggest FCPA case in history against individuals. It said continuing the prosecution would be a waste of government resources.
In two separate Africa sting trials that lasted a total of six months, there were three acquittals and juries deadlocked on all counts as to seven other defendants. The 0-10 result for the DOJ led one defense lawyer in the case to refer to the entire Africa sting prosecution as a ‘made-up fantasy.’
Twenty-two defendants were arrested two years ago after a two-and-a-half year undercover sting operation. All but one defendant was arrested in Las Vegas during an annual trade show for military and law enforcement equipment companies.
FBI agents had posed as officials and representatives of the government of Gabon, Africa. The DOJ said the defendants agreed to pay bribes to the undercover agents to win contracts to sell body armor, weapons, and military gear.
Three defendants in the case pleaded guilty to FCPA conspiracy or substantive charges. Haim Geri, Daniel Alvirez, and Jonathan Spiller haven’t been sentenced yet.
Earlier this month, after the second mistrial due to a hung jury, the DOJ criminal division boss Lanny Breuer and the U.S. Attorney for the District of Columbia Ronald Machen asked Judge Richard Leon for time to consider ‘whether to continue to go forward’ with the prosecution.
The DOJ once called the Africa sting case ‘the largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the Foreign Corrupt Practices Act.’ One hundred fifty FBI agents executed fourteen search warrants in locations across the U.S., the DOJ said. And the U.K.’s City of London Police also executed ‘seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments,’ the DOJ said.
The government’s evidence included more than 5,000 taped phone calls, more than 800 hours of video and audio recordings, and 231 recordings of meetings between undercover agents and the defendants.
The indictments alleged that the defendants conspired to violate the Foreign Corrupt Practices Act, conspired to engage in money laundering, and committed substantive FCPA offenses.
The defendants were split into four groups for trial.
Early in the prosecution, Judge Leon said he doubted the defendants were part of a single conspiracy, as the government asserted. ‘I read all sixteen indictments,’ Judge Leon said at a preliminary hearing, ‘and I didn’t see it. I have zero sense that there was an omnibus grand conspiracy.’
The DOJ went ahead but during the second trial, Judge Leon dismissed the conspiracy counts. Evidence showed that most defendants hadn’t met or spoken with each other. That ruling crippled the DOJ’s case and resulted in exclusion of much of its evidence.
When the Africa sting indictments were first announced, the DOJ’s Breuer said: ‘From now on, would-be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent.’
But law enforcement stings can alienate jurors. A commentator said last year on the FCPA Blog: “I’m a cop, and I don’t even like a lot of stings, especially when they almost bait people into committing the crime.”
The DOJ’s chief witness in the case was Richard Bistrong. He introduced the undercover FBI team to his friends and colleagues in the military and police equipment industry.
Bistrong always had credibility problems. In September 2009, he pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act and other statutes. His charges didn’t come from the sting but from his own business practices. He then turned state’s evidence (and enabler) in the hope of a lighter sentence.
Before the first sting trial opened, defense lawyers said the case was ‘built entirely around an irredeemably corrupt con-man, Richard Bistrong, and that, by mishandling him and by other misconduct, the government allowed Bistrong to contaminate every aspect of the operation.’
The government’s motion to dismiss with prejudice said:
The United States of America, by and through its undersigned attorneys, hereby moves to dismiss with prejudice the Superseding Indictment, and all underlying indictments, against the remaining defendants who are pending trial in the above-captioned case.
The government has carefully considered (1) the outcomes of the first two trials in which, after extensive deliberations, the juries remained hung as to seven defendants and acquitted two defendants, and one defendant was acquitted on the sole charge against him pursuant to Fed. R. Crim. P. 29; (2) the impact of certain evidentiary and other legal rulings in the first two trials and the implications of those rulings for future trials, including with respect to Rule 404(b) and other knowledge and intent evidence the government proposed to introduce; and (3) the substantial governmental resources, as well as judicial, defense, and jury resources, that would be necessary to proceed with another four or more trials, given that the first two trials combined lasted approximately six months. In light of all of the foregoing, the government respectfully submits that continued prosecution of this case is not warranted under the circumstances.