Federal Securities Law Blog
Hung Jury in Trial of Second Group in the FCPA Sting Cases Means Mistrial For Remaining Three Defendants
On January 31, 2012, Judge Richard Leon declared a mistrial in the trial of the second group of defendants in the FCPA Sting case when the jury was unable to reach a verdict as to John and Jeana Mushriqui and Mark Morales. The mistrial occurred the day after the jury returned a partial verdict, finding two of the defendants not guilty. The result adds to the string of litigated FCPA cases where the Government has failed to secure (or maintain) a conviction in recent weeks.
The case began in December 2009 when the Government charged 22 defendants with conspiring to violate the FCPA, violating the FCPA and conspiring to launder money, alleging 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, planning to disguise the payments as sales commissions. The Minister turned out to be an undercover FBI agent.
The case has been divided into four groups for the purposes of trial. On July 7, 2011, D.C. Federal Judge Richard Leon declared a mistrial in the case against the first four defendants (Trial Group No. 1) when the jury was unable to reach an unanimous verdict on all charges.
The present trial, involving six defendants (known as Trial Group No. 2), began on September 26, 2011. As discussed here, on December 22, 2011, Judge Leon dismissed Count 1 (conspiracy to violate the FCPA) as to all six defendants in Trial Group No. 2 and dismissed the Government's case in its entirety against one defendant, Stephen Giordanella. The remaining defendants moved for a mistrial, arguing that they were prejudiced by the admission of evidence regarding the now-dismissed conspiracy count, but Judge Leon denied that Motion on January 9, 2012 (as discussed here).
The Jury began deliberating on January 13, 2012. According to Richard Cassin of the FCPA Blog, on January 24, 2012, the jury reported to the Judge that they had reached a unanimous verdict regarding some defendants, but deadlocked as to others.
On January 30, 2012, Judge Leon accepted a partial verdict, acquitting two of the defendants, Patrick Caldwell and John Godsey. At that point, the jury, remained hung as to the other three defendants (the Mushriqui siblings and Mr. Morales). Judge Leon instructed the jury to continue its deliberations, but indicated that he was planning to declare a mistrial if the jury was unable to break its deadlock – which is exactly what he did Tuesday afternoon.
According to Rachel Jackson's piece on Main Justice's Just Anti-Corruption page, the jurors told the Court that there "had been no movement" in the deliberations for a week and that further deliberations would be "fruitless." The article reported that 9 of the 12 jurors had voted not guilty with respect to the Mushriquis and that 10 of 12 had voted the acquit Mr. Morales as well.
Since the August 5, 2011 conviction of Joel Esquenazi and Carlos Rodriguez in the Haiti Teleco case, the Government has suffered a string of defeats in the litigated cases, including the decision by Judge Matz to vacate the convictions of Lindsey Manufacturing, Keith Lindsey and Steve Lee, and the recent decision by Judge Hughes to dismiss the FCPA charges against John O'Shea. On the other hand, both DOJ and SEC continue to successfully settle a number of cases involving FCPA charges against corporations – as detailed by some commentators such as Mr. Cassin, who maintains a "Top Ten" list detailing the accomplishments on his FCPA Blog.
In the FCPA Sting Case, of the 22 defendants, the Government has secured three guilty pleas, but has lost as to three defendants and had mistrials declared as to seven defendants. The next group of defendants are scheduled to be tried beginning February 28, 2012. Two of those defendants, Amaro Goncalves (joined by three other defendants) and Israel Weisler, have filed motions on January 20, 2012 and January 30, 2012, respectively, asking the Court to dismiss the FCPA conspiracy count (and two other counts) against him "consistent with the Court’s prior decisions that have dismissed the same or similar counts against other defendants as a matter of law."
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