U.S. BUSINESSMEN CONVICTED FOR PAYING BRIBES TO AZERI LEADERS

[gamavor]

U.S. BUSINESSMEN CONVICTED FOR PAYING BRIBES TO AZERI LEADERS

 

/PanARMENIAN.Net/

13.07.2009 11:13 GMT+04:00

 

Frederic Bourke, the co-founder of handbag maker Dooney & Bourke

who was once part of the Ford family, was convicted by a U.S. jury

of conspiring to pay bribes to government leaders in Azerbaijan in

a 1998 oil deal. The federal jury in Manhattan returned its verdict

yesterday after a monthlong trial that featured testimony from former

U.S. Senator George Mitchell. Jurors found Bourke conspired with Czech

expatriate Viktor Kozeny to bribe to Azerbaijan leaders including

former President Heidar Aliyev to spur the sale of the state-owned oil

company. The verdict is a win for U.S. prosecutors as they step up

enforcement of the Foreign Corrupt Practices Act, the law that bars

payments to non-U.S. officials in return for business. Few criminal

cases under the FCPA have gone to trial. "By bringing and winning the

case, the government has expanded the FCPA's coverage," said Richard

Cassin, the founder of Singapore-based law firm Cassin Law LLC,

who also writes the FCPA Blog. "This was probably the hardest FCPA

prosecution the government has ever brought. Bourke didn't pay the

bribes himself. He only knew about them." Bourke, 63, was on trial

for investing with Kozeny knowing he gave Azeri leaders millions

of dollars in cash and a secret two-thirds interest in a venture

Kozeny formed to buy the state oil company, known as Socar. Defense

attorney John Cline said an appeal is "very likely." Bourke was

accused of conspiring to violate the FCPA, conspiring to violate

money-laundering laws and lying to agents of the Federal Bureau of

Investigation. He was acquitted of money laundering. U.S. District

Judge Shira Scheindlin said she will impose less than the 10-year

prison sentence that prosecutors said Bourke faced. He is free on

$10 million bail. Bourke, a Greenwich, Connecticut, entrepreneur who

launched startups in the home-building, accessory and biotechnology

industries, denied knowing of the bribes. His lawyers said Kozeny stole

more than $180 million from Bourke and other investors including the

hedge fund Omega Advisors Inc. and the insurer American International

Group. A Bourke investment vehicle put up $8 million in the deal.

 

Azerbaijan, a former Soviet Republic on the Caspian Sea, never sold

Socar, wiping out the investment. Kozeny, who also has been charged,

is a fugitive living in the Bahamas. He admits bribing Azeri leaders,

denies stealing from his investors and claims they knew their money

was being used as payoffs. He says the FCPA doesn't apply to him.

 

Trial witnesses told of plane flights into Azerbaijan with millions of

dollars stuffed into suitcases, of shakedowns in government offices,

and of dealings with Chechen mobsters who provided protection to

Kozeny's operation. Kozeny said his investors might control about

half of the Azeri economy if they captured Socar. Others believed

their investment might grow tenfold, witnesses said. The jury of

seven women and five men began deliberating July 8 after hearing

testimony since early June. Jury foreman David Murphy, 52, said the

panel believed Bourke learned of the bribes after investing and then

should have gotten out. By then Kozeny was known as the "Pirate of

Prague" for allegedly stealing money from investors in his native

Czech Republic. "It was Kozeny, it was Azerbaijan, it was a foreign

country," Murphy, an electrician, said in an interview after the

verdict. "We thought he knew and definitely could have known. He's

an investor. It's his job to know." The government's case centered

on two witnesses, former Kozeny aide Thomas Farrell and ex-Kozeny

lawyer Hans Bodmer, both of whom testified that they told Bourke of

the payments. The two have pleaded guilty and are cooperating with

prosecutors in bids for leniency. Prosecutors also offered evidence

that Bourke "consciously avoided" learning about the bribes by not

asking questions about them. Jurors were allowed to convict if they

found Bourke knew or took steps to avoid learning of the payments.

 

The defense sought to poke holes in Farrell's and Bodmer's accounts

and said Bourke believed Azeri leaders had lawfully paid for their

stake in the company Kozeny formed to buy Socar. Juror Barbara

Robertson said jurors rejected a central defense claim that Bourke

wasn't in Azerbaijan when Farrell and Bodmer said they told him of

the bribes. "The judge's instruction was clear," she said. "If you

think the substance is right and the dates are wrong, it doesn't

matter." Bourke, who was once married to a member of the Ford

family, didn't testify. Among his witnesses was his friend Mitchell,

the ex-senator, whom Bourke brought into the deal as a $200,000

investor. Mitchell told jurors he was unaware of the bribes even

after meeting with Aliyev. Mitchell, 75, is a special U.S. Middle

East envoy. He was a Democratic senator from Maine in the 1980s.

 

Besides the president, intended bribe recipients included current

President Ilham Aliyev and two officials overseeing the sale of state

property in 1998, prosecutors said. Along with Farrell and Bodmer, a

former Omega executive has pleaded guilty. Benjamin Brafman, Kozeny's

lawyer, said the verdict "does not affect Mr. Kozeny, who has always

maintained that the FCPA does not apply to him because he is not a

citizen" of the U.S. The U.S. says it's appealing a Bahamian court's

refusal to extradite him. "The jury had decided that Mr. Bourke lied

and bribed," Kozeny said in an e-mailed statement. He said Bourke

deserved a "minimal" sentence. "In our Judeo-Christian culture,

we base our life on forgiveness," Kozeny said, Bloomberg reported.

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I've never heard before such a solid legal argument!)))))))))

Edited July 14, 2009 by gamavor