UPDATED on May 16, 2011 — As mentioned previously, Lindsey Manufacturing Company (a privately-held company) was the first corporate defendant to be convicted after trial of FCPA charges (for conspiracy to violate the FCPA and five counts of FCPA violations based on payments to employees of the Comisión Federal de Electricidad ("CFE"), an electric utility company owned by the government of Mexico). Assistant Attorney General Lanny Breuer stated last fall that it was a "new era of FCPA enforcement." The Lindsey Manufacturing verdict and some of the arguments raised by the defense present some indication of exactly how aggressively these issues will be fought by the government and defendants alike.
In the aftermath of the verdict, Jan Handzlik of Greenberg Trauig, counsel to Lindsey Manufacturing and its President, Keith Lindsey vowed to continue fighting the charges:
We are very disappointed by the verdict and continue to believe in our clients’ innocence. We will pursue our motion to dismiss the indictment on grounds of prosecutorial misconduct. We will also seek to have the verdict thrown out and a new trial granted.
The prosecutorial misconduct motion, filed on behalf of the company, Mr. Lindsey and CFO Steve Lee, accused the Government of presenting the Grand Jury with "knowingly false and misleading representations on critical matters" and omitting the "disclosure of material facts" during the testimony of an FBI Special Agent. The defendants further accused the Government of covering up this testimony by refusing to produce the complete Grand Jury transcript of the agent’s testimony until ordered by the Court in the middle of the trial.
According to Mr. Handzlik, Keith Lindsey and Steve Lee "were unaware of any corrupt activities" by Enrique Aguilar of Grupo International SA, the intermediary who made the corrupt payments to CFE at issue in the case. The prosecutorial misconduct motion filed on May 9 (before the verdict) cited numerous examples of misconduct by the Government, including:
• the agent concealed the fact that Lindsey Manufacturing had done business with the CFE as far back as 1991, eleven years before retaining Grupo, and had a long-established business relationship;
• the agent falsely testified that Lindsey Manufacturing obtained an advantage over competitors through bribery when there were no competitors for certain contracts; and
• the agent falsely testified that Lindsey Manufacturing obtained an immediate advantage when retaining Grupo, when, in fact, it did not obtain any significant contracts until four years later.
On the same day that Lindsey Manufacturing filed its motion, the Court granted, in part, a Rule 29 motion for judgment of acquittal by co-defendant Angela Aguilar, dismissing one of the two money laundering counts against her (she was subsequently convicted on the remaining money laundering count). Ms. Aguilar’s motion argued, in part, that the same FBI agent had misled the Grand Jury about her (Ms. Aguilar’s) alleged involvement in the money laundering scheme.
The prosecutorial misconduct motion filed by Lindsey Manufacturing is still pending, along with defendant’s Rule 29 motion for judgment of acquittal.
Despite the arguments, Lindsey Manufacturing (as well as Messrs. Lindsey and Lee and Ms. Aguilar) will continue to face a difficult fight as the case proceeds, especially now that the jury has spoken. Richard Cassin, the author of The FCPA Blog, has provided a thoughtful analysis (available here) regarding some of the difficulties facing defendants in FCPA cases.
