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The FCPA Sting Case – Judge Leon Dismisses The Central Conspiracy Count As To Six Defendants in Trial Group No. 2

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

On Thursday, December 22, 2011, Judge Richard Leon ruled on the Rule 29 Motions for Judgment of Acquittal in the FCPA Sting Case by dismissing Count 1 (on the grounds that there was not sufficient evidence to that the six defendants participated in the overarching conspiracy to violate the FCPA) as to all six defendants in Trial Group No. 2. In addition, Judge Leon dismissed the Government’s case against defendant Stephen Giordanella in its entirety. The trial will resume on January 3, 2012 with the remaining five defendants having their opportunity to put on their defense. The rulings are considerable setback for the Government in what the Department of Justice called the first sting operation in an FCPA case.

In December 2009, the Government filed 16 indictments charging 22 defendants with conspiring to violate the FCPA, violating the FCPA and conspiring to launder money stemming from an agreement to bribe the Minister of Defense of Gabon (who was, in reality, an undercover FBI agent. In April 2010, the Government filed a Superseding Indictment naming all 22 defendants in a single case. 3 of the 19 defendants pled guilty to conspiracy charges in March and April 2011. The case was divided into four groups for the purposes of trial. As discussed here, on July 7, 2011, D.C. Federal Judge Richard Leon declared a mistrial in Trial Group No. 1 when the jury was unable to reach an unanimous verdict on all charges.

The case against Trial Group No. 2 commenced on September 26, 2011, and, the Government did not finish its case-in-chief until December 19. After hearing argument on the Rule 29 Motions for Acquittal during last week, Judge Leon ruled on December 22, 2001.

• The Judge dismissed Count 1 of the Superseding Indictment (which charged all defendants with conspiring to violate the FCPA) as to the six defendants in Trial Group No. 2. According to Professor Mike Koehler of the FCPA Professor Blog, Judge Leon stated:

[V]iewing the evidence in the light most favorable to the Government, the Court does not believe the Government has produced sufficient evidence to enable a rational trier of fact to conclude beyond a reasonable doubt that each of these six defendants participated in the overarching conspiracy charged in the superseding indictment in this case.

• The Judge dismissed the charges against Mr. Giordanella, who was only charged in Count 1. Originally, he also had been charged conspiracy to commit money laundering, but the Government had dismissed that charge against in September 2011, shortly before trial began.

• The Judge also dismissed two of the substantive FCPA counts as to two defendants, but denied the remaining Rule 29 motions and the trial against the five remaining defendants in Trial Group No. 2 will proceed on January 3, 2012.

As discussed by Mike Scarcella of the Blog of the Legal Times, the ruling came only a week after Judge Leon "criticized prosecutors for mishandling evidence" and "voided a portion of the testimony from a key witness."