A federal appeals court ruled Friday that a non-resident foreign national cannot be charged with conspiracy to violate the Foreign Corrupt Practices Act or with aiding and abetting a violation of the FCPA, unless the government can show that he acted as an agent of a “domestic concern” or while physically present in the United States.
The Second Circuit largely affirmed a lower court ruling in U.S. v. Hoskins from March 2016 that rejected the DOJ’s argument for expansive personal jurisdiction in FCPA cases.
Lawrence Hoskins, a British national and former Alstom UK executive based in Paris, was charged in 2013 with FCPA and money-laundering offenses.
The allegations tied Hoskins to a scheme to win a $118 million project to build power stations for Indonesia’s state electricity company. As a senior vice president for Alstom, he allegedly approved payments to “consultants” retained to bribe Indonesian officials.
In August 2015, the federal district court in Connecticut dismissed one count of the indictment against Hoskins, holding that he couldn’t be held criminally liable for conspiring to violate or aiding and abetting a violation of the FCPA.
In a March 16 ruling, Judge Janet Bond Arterton wrote a 21-page decision rejecting the government’s request for reconsideration. The DOJ appealed.
On Friday, a three-judge panel of the Second Circuit said the “central question of the appeal is whether . . . a person [can] be guilty as an accomplice or a co-conspirator for an FCPA crime that he or she is incapable of committing as a principal?”
In mostly affirming the lower court, the Second Circuit said since Hoskins was never a U.S. citizen, national, or resident, and wasn’t accused of having acted in furtherance of the bribery scheme while in the United States, he could only be charged as an agent of a domestic concern.
The DOJ can still pursue FCPA charges based on the factual issue of whether Hoskins was an agent of a domestic concern, the appellate court said.
Hoskins, 67, also still faces money laundering charges.
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Alstom SA pleaded guilty in December 2014 to violating the Foreign Corrupt Practices Act by bribing officials in Indonesia, Saudi Arabia, Egypt, and the Bahamas.
It paid the DOJ $772 million in criminal penalties to settle charges that it violated the FCPA by falsifying its books and records and failing to implement adequate internal controls.
Three Alstom executives have pleaded guilty in the United States to bribing officials in Indonesia.
In the UK, seven individuals have been charged in the Alstom case, along with two Alstom business units.
The FCPA Blog | August 27, 2018