view of the exterior of an Alstom building

Conspiracy Count Dismissed in Ruling on United States v. Hoskins

In a recent case heard by the U.S. Court of Appeals, Lawrence Hoskins, a former executive at Alstom, was charged with conspiracy to bribe foreign officials. The Court’s decision in the case calls into question just how long the DOJ’s reach really is with respect to the FCPA.

The Justice Department’s attempt to assert broad jurisdiction over foreign nationals was rebuked in a recent U.S. Court of Appeals decision in United States v. Hoskins. As a result, the appellate court affirmed the lower court’s decision to dismiss the FCPA conspiracy count against defendant Hoskins, a former Alstom executive.

The government will still be able to prosecute Hoskins for substantive FCPA violations based on the theory that he acted as an agent of a U.S. company, Alstom’s subsidiary, based in New Jersey.

The practical effect of the Court’s decision will be minimal since the FCPA already includes broad categories of foreign nationals’ subject to prosecution. Hoskins’ unique factual circumstances occur relatively rarely. However, the Court’s decision stands as a rebuke to the Justice Department’s interpretation of the statute.

Hoskins, who worked for an Alstom subsidiary, was charged with FCPA conspiracy despite the fact that he had no contact with the United States, worked for a foreign subsidiary and did not carry out any acts in the United States. Hoskins was charged with other defendants with a conspiracy to bribe foreign officials in Indonesia.

The Court was faced with an interesting issue: whether a defendant could be charged with conspiracy to violate a statute where he did not fall within the categories of persons covered by the statute.

The FCPA creates three categories of persons who can be prosecuted under the statute:

  1. Issuers of securities and their officers, directors or employees;
  2. S. companies and U.S. persons using facilities of interstate commerce to carry out a bribery scheme; and
  3. Foreign companies or persons who carry out bribery schemes while acting in the United States.

Alstom is based in France. Hoskins worked at an Alstom subsidiary in France. The government alleges that Hoskins participated in a bribery scheme by Alstom’s U.S. subsidiary to secure a $118 million power contract in Indonesia. Hoskins allegedly was involved in the selection of, and authorization of, illegal payments to a third-party, who in turn paid bribes to an Indonesian official.

Several parts of the bribery scheme occurred in the United States: one of the consultants had a bank account in Maryland, bribery payments were made from funds in the United States, several executives met and discussed the bribery scheme while in the United States and email and phone communications occurred in the United States relating to the bribery scheme. Hoskins communicated with U.S.-based executives and employees about the scheme, but was never physically present.

The legal question presented by the appeal was fairly technical and required the Court to determine if Hoskins could be charged with conspiracy to violate a substantive statute that did not cover his activities. The Court upheld the lower court decision based on the following factors:

  1. The Court ruled that the conspiracy charge was restricted to those specific enumerated categories of persons subject to the FCPA. The Court found the language of the statute instructive on this question since it specifically listed the persons subject to the statute and excluded any category applicable to Hoskins.
  2. The Court found that the legislative history surrounding the FCPA supported the exclusion of foreign nationals falling into Hoskins’ category of persons covered by the FCPA. The Court carefully analyzed the legislative history citing Congress’ decision to exclude foreign nationals that do not fall within the enumerated categories.
  3. The Court cited the presumption against extraterritorial application of the FCPA in the absence of an affirmative statement from Congress in the statute.

This article was republished with permission from Michael Volkov’s blog, Corruption, Crime & Compliance.

Michael Volkov

Michael Volkov

Michael-Volkov-leclairryanMichael Volkov is the CEO of The Volkov Law Group LLC, where he provides compliance, internal investigation and white collar defense services.  He can be reached at [email protected].  His practice focuses on white collar defense, corporate compliance, internal investigations, and regulatory enforcement matters. He is a former federal prosecutor with almost 30 years of experience in a variety of government positions and private practice.

Michael maintains a well-known blog: Corruption Crime & Compliance which is frequently cited by anti-corruption professionals and professionals in the compliance industry.Michael has extensive experience representing clients on matters involving the Foreign Corrupt Practices Act, the UK Bribery Act, money laundering, Office of Foreign Asset Control (OFAC), export controls, sanctions and International Traffic in Arms, False Claims Act, Congressional investigations, online gambling and regulatory enforcement issues.

Michael has assisted clients with design and implementation of compliance programs to reduce risk and respond to global and US enforcement programs.

Michael has built a strong reputation for his practical and comprehensive compliance strategies.Michael served for more than 17 years as a federal prosecutor in the U.S. Attorney’s Office in the District of Columbia; for 5 years as the Chief Crime and Terrorism Counsel for the Senate Judiciary Committee, and Chief Crime, Terrorism and Homeland Security Counsel for the Senate and House Judiciary Committees; and as a Trial Attorney in the Antitrust Division of the U.S. Department of Justice.

Michael also has extensive trial experience and has been lead attorney in more than 75 jury trials, including some lasting more than six months. His clients have included corporations, officers, directors and professionals in, internal investigations and criminal and civil trials. He has handled a number of high-profile criminal cases involving a wide‐range of issues, including the FCPA and compliance matters, environmental crimes, and antitrust cartel investigations in countries all around the world.

Representative Engagements

  • Successfully represented three officers of a multinational company in two separate criminal antitrust investigations involving a criminal antitrust investigation in the District of Columbia and the Southern District of New York.
  • Defended pharmaceutical company before the Food and Drug Administration and Senate Finance Committee relating to application for approval of generic drug.
  • Conducted internal investigation which exonerated company against allegations of false statements in submissions to the FDA and against improper conduct alleged by Senate Finance Committee.
  • Represented company before the US State Department on alleged violations of ITAR which lead to voluntary disclosure and imposition of no civil or criminal penalties.
  • Advised several multinational companies on compliance with anti‐corruption laws, and design and implementation of anti‐corruption and anti‐money laundering compliance programs.
  • Advised hospitals, pharmaceutical companies and medical device companies on compliance issues relating to Stark law and Anti‐Kickback law and regulations.
  • Conducted due diligence investigations for large multinational companies for anti‐corruption compliance of: potential third party agents, joint venture partners and acquisition targets in Europe, Africa, Asia and Latin America.
  • Represented individual in white collar fraud case in Alexandria, Virginia and secured dismissal of criminal charges and expungement of criminal record.
  • Represented company before Congress and Executive Branch in effort to modify Justice Department regulations concerning use of federal funds.
  • Advised and assisted World Bank in review of global corruption policies, enforcement programs and corruption investigations and prosecutions.

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