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Four ways the DOJ sidesteps the FCPA statute of limitations

In February, the Department of Justice unsealed an indictment against two former executives of the Indonesian subsidiary of Alstom S.A., Reza Moenaf and Eko Sulianto, and a former executive of Marubeni Corporation, Junji Kusunoki. Both companies pleaded guilty to foreign bribery charges in 2014 and racked up substantial penalties partly as a result of their illicit payments to Indonesian officials to secure a project contract with the country’s state-owned electricity company.

Significantly, the alleged misconduct at the heart of the counts filed against Moenaf, Sulianto, and Kusunoki occurred largely in 2002-2007, with one isolated wire transfer in 2009. In light of the standard five-year statute of limitations for FCPA charges, the DOJ has employed several notable legal strategies to reach the defendants’ conduct from over 18 years ago.

First, the five-year statute of limitations is generally tolled upon the filing of an indictment.

On November 14, 2013, the DOJ filed its first indictment against Kusunoki, which meant the DOJ could address conduct that occurred from November 14, 2008 onward. Fortunately, for the prosecutors, one overt act fell within this time-period. Marubeni Corporation and Alstom S.A. partnered to bribe Indonesian officials, and in 2005 were awarded the project contract they had set out to secure. More than four years after receiving the rights to the contract, members of the conspiracy allegedly wired $66,688 to a consultant on October 5, 2009—to pay additional bribes to a member of the Indonesian Parliament. This wire transfer would prove vital for the rest of the case, as it was the only act to fall within the statute of limitations of the first indictment.

Second, the statute of limitations remains tolled for a superseding indictment, as long as that new indictment does not substantially alter the original filing.

The DOJ filed a superseding indictment, sealed, in the District Court for the District of Connecticut on February 26, 2015. The indictment alleges the same bribery scheme and includes the same criminal counts. The most significant difference here is the inclusion of two additional named defendants: Moenaf and Sulianto. But, because the statute of limitations was tolled in the original Kusunoki indictment, for purposes of assessing permissible prosecutorial reach, this indictment retains the same legal footing as the first one.

Third, the statute of limitations remains tolled even if the indictment, immediately upon filing, is sealed and kept secret for years.

This gave the DOJ the authority, without fear of running down the clock, to keep the indictment sealed for nearly five years.

Finally, for conspiracy offenses, the DOJ need only prove that a single overt act in furtherance of the conspiracy occurred during the five-year statute of limitations period. Then, all parts of the conspiracy become punishable.

The counts the DOJ selected to include in the indictment are of particular importance here. The indictment alleges a conspiracy, several counts of violating the FCPA, and conspiracy to commit money laundering. Ultimately, all of the conduct falls within the statute of limitations because the indictment alleges a single wire transfer in 2009 was committed in furtherance of the rest of the conspiracy.That 2009 wire transfer provides the missing link to reach conduct from as early as 2002, when the companies first set out to recruit consultants to sway the relevant foreign officials.

This is all to say that the five-year statute of limitations cannot be read literally to mean defendants should only fear legal repercussions for conduct that occurred in the last five years. In fact, the FCPA legal framework provides remarkable flexibility for the prosecution of older conduct. And this may yet prove a powerful tool in the prosecutor’s toolbox as the DOJ turns increasingly to punishing individual misconduct in FCPA investigations.

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1 Comment

  1. Extremely helpful comments, Jesse. I’ll likely use this in future courses! Thanks for the contribution.

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