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Hung Jury Results In Mistrial Being Declared in FCPA Sting Case

Posted in Criminal Charges in Securities Cases, Foreign Corrupt Practices Act

On Thursday, July 7, 2011, D.C. Federal Judge Richard Leon declared a mistrial in a criminal case against four defendants who were accused of conspiracy and FCPA violations when the jury was unable to reach an unanimous verdict on all charges. The case represented a setback for the Government, who had brought charges against 22 individuals based on a sting operation, the first of its kind to involve FCPA charges to be tried.

The Government initially filed 16 sealed indictments in December 2009 (unsealed in January 2010), charging 22 defendants with conspiring to violate the FCPA, violating the FCPA and conspiring to launder money. The Government alleged that the defendants met an informant who claimed to be an agent for the Minister of Defense of Gabon and arranged an introduction. The Government further alleged that the defendants met with and agreed to bribe the Minister, with the payments disguised as sales commissions. However, the "Minister" was, in reality, an undercover FBI agent. In April 2010, the Government filed a superseding Indictment in U.S. v. Goncalves, No. 09-cr-00335 (D.D.C.), naming all 22 defendants in a single case.

The case has been divided into four groups for the purposes of trial. 3 of the 19 defendants pled guilty to conspiracy charges in March and April 2011.

On May 16, 2011, the trial commenced against the first four defendants (Pankesh Patel, John Benson Wier, Andrew Bigelow and Lee Allen Tolleson). The testimony included that of the informant, Richard Bistrong, who had pled guilty to conspiring to violate the FCPA himself in U.S. v. Bistrong. No. 10-cr-00021 (D.D.C.) (and, according to the analysis of Richard L. Cassin of the FCPA Blog, had "severe credibility problems").

The Jury began deliberating on June 27, 2011. On Wednesday, July 6, the jurors had sent Judge Leon a note stating:

We have now voted on all counts 6 times. We are continuing to discuss all counts. How do we proceed if we have unanimous decisions on some counts but not all? Can the jury be hung on some counts and not others?

The following day, after the jury was unable to reach a verdict as to all defendants, the defendants moved for a mistrial, which Judge Leon granted. Both the FCPA Blog and the FCPA Professor Blog have each provided a thoughtful analysis of the result.

According to the Legal Times, Joey Lipton of the Department of Justice advised the Court that the Government would retry the four men. The Court has scheduled another hearing for all defendants for July 26, 2011.