Complex FCPA Case Concludes with 366 Day Sentence for Frederic Bourke

After a nearly decade long investigation which spanned the globe, dismissal of FCPA substantive charges on statute of limitations grounds, reinstatement of the FCPA substantive charges, a superseding indictment which then dropped the FCPA substantive charges in exchange for “only” conspiracy to violate the FCPA, and a six week jury trial this past summer, the DOJ finally extracted its “pound of flesh” from Frederic Bourke.

As has been widely reported, this afternoon Judge Shira Scheindin (S.D.N.Y.) sentenced Bourke to a year and a day in federal prison (followed by three years probation) and ordered him to pay $1 million fine. The DOJ sought a 10 year prison sentence. The DOJ release announcing the sentence is presumably forthcoming.

Bourke who? What’s this about?

To those of you wading into the details of this case for the first time or only recently, you will be well served by reading Andrew Longstreth’s superb piece which recently appeared in the American Lawyer (see here).

Bourke was convicted in July by a jury for conspiring to pay bribes to Azerbaijan officials. The DOJ news release announcing the conviction (see here) called it a “massive [bribery] scheme.”

What was Bourke guilty of? According to the DOJ release:

“Evidence presented at trial established that Bourke was a knowing participant in a scheme to bribe senior government officials in Azerbaijan with several hundred million dollars in shares of stock, cash, and other gifts. According to evidence presented at court, the bribes were meant to ensure that those officials would privatize the State Oil Company of the Azerbaijan Republic (SOCAR) in a rigged auction that only Bourke, fugitive Czech investor Viktor Kozeny and members of their investment consortium could win, to their massive profit.”

Bourke lawyers (and many other observers) feel that Bourke was simply guilty of being negligent and not asking enough questions before making a foreign investment, an investment that was also made by former U.S. Senate Majority Leader George Mitchell and Columbia University (among others). An investment that resulted in Bourke reportedly losing $8 million.

The Bourke case is arguably the most complex and convoluted case in the history of the FCPA.

Yet it is not over as Bourke’s lawyers have promised an appeal.

Under our legal system, if a grand jury indicts you, a jury convicts you, and a judge sentences you … well, that is just sometimes “how the cookie crumbles.”

However, the Bourke case and his sentence does not exactly leave one with “warm, fuzzy feelings.”

In fact, Judge Scheindin (i.e. the sentencing judge and the judge who denied Bourke’s post-verdict motions) is being widely reported as saying this at today’s sentencing hearing:

“After years of supervising this case, it’s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both.”

That seems an appropriate end to this chapter of the Bourke saga.

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I haven’t read every pleading in this case, every motion filed, nor obviously heard every word of evidence the convicting jury did. There is certainly enough in this case for a law school to one day offer an LLM in the Bourke case!

Nonetheless, it is a seriously open question in my mind as to whether this case was an appropriate exercise of prosecutorial discretion and whether justice has indeed been served with Bourke’s sentence.

So what do you think? What are your thoughts on the Bourke case and his sentence?

I would like to do a post on reader commentary in the coming days, so please do contact me if you are so inclined.

For starters, Brian Whisler of Baker & McKenzie contacted me. He is what Brian (a former federal prosecutor) had to say:

“In federal parlance, 12 months and one day translates into 10 months due to some quirky Bureau of Prisons calculus. This sentence is also less than the 2 years that the US Probation Office represented as the appropriate guideline sentence. I expected that the district judge would impose a sentence less than the two years because (1) Bourke lost $8 million in a bribery scheme that did not meet its objective; (2) Bourke has no criminal history and does not represent a future danger, economic or otherwise. This bribery case, while certainly important to DOJ in its dedicated effort to eradicate corruption globally, stands in sharp contrast to the likes of Madoff and others whose harm to others is readily apparent.”

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This article originally appeared on Professor Koehler’s FCPA Professor website (www.fcpaprofessor.com) and is reprinted with his permission.

Mr. Koehler is also CCI’s Featured FCPA Columnist. He has a wide range of experience and expertise on this emerging topic, and he contributes regularly to our discussion of current FCPA matters.

Follow the link to his bio page to learn more about Mike Koehler.

About the Author

Mike Koehler

fcpa-professor-Mike-KoehlerAbout the Author Mike Koehler is an Assistant Professor at Southern Illinois University School of Law and is an expert FCPA columnist for Corporate Compliance Insights. Professor Koehler is a leading expert on the FCPA and other anti-corruption laws and initiatives and he founded and maintains the site FCPA Professor, an industry leading forum that has earned national and international recognition.