On Tuesday, March 27, 2012, the Government filed a motion in the FCPA Sting Case to dismiss the charges against Jonathan M. Spiller, Haim Geri, and Daniel Alvirez, the three defendants who had previously pled guilty to conspiracy charges in the case and were awaiting sentencing. This unusual event occurred after the Court had dismissed the same conspiracy charge against other defendants in the case and the Government dropped all other charges against the other defendants. As a result, the Sting Case, which was announced in January 2010 as a "turning point" in FCPA prosecutions, will end with zero convictions.
The Government originally charged twenty-two defendants with conspiring to violate the FCPA, violating the FCPA and conspiring to launder money, based on dealings with an informant and an undercover FBI agent posing as the Minister of Defense of Gabon in what Assistant Attorney General Lanny A. Breuer called "the first large-scale use of undercover law enforcement techniques to uncover FCPA violations and the largest action ever undertaken by the Justice Department against individuals for FCPA violations." When the indictments were announced in January 2010, Mr. Breuer also said "The fight to erase foreign bribery from the corporate playbook will not be won overnight, but these actions are a turning point. From now on, would-be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent."
The Government filed a Superseding Indictment in April 2010, naming all 22 defendants in a single case. The defendants were divided into four separate groups for the purposes of trial. However, before the trials began, three defendants pled guilty in the case. On March 1, 2011, Mr. Alvirez pled guilty to what the Government now calls the "Gabon conspiracy count" and a separately charged conspiracy count relating to the sale of military and law enforcement equipment to the Republic of Georgia ("the Georgia conspiracy count"). Mr. Spiller and Mr. Geri also pled guilty to the Gabon conspiracy count on March 29, 2011 and April 28, 2011, respectively.
When the trials began, the Government was not as successful. The first trial (against four defendants) resulted in a hung jury and a mistrial in July 2012. In the second trial (against six defendants), Judge Richard Leon dismissed the Gabon conspiracy count as to all six defendants and dismissed the Government’s case in its entirety against one defendant. At the conclusion of the second trial, two of the defendants were acquitted and another mistrial was declared as to the remaining three defendants when the jury was unable to break its deadlock.
On February 21, 2012, the Government filed a motion to dismiss all charges against the defendants (other than the three who had pled guilty), citing (1) the outcomes of the first two trials; (2) the impact of certain evidentiary and other legal rulings in the first two trials and the implications of those rulings for future trials; and (3) the substantial resources that would be necessary to proceed additional trials.
In the motion filed on March 27, 2012 with respect to Messrs. Spiller, Geri, and Alvirez, the Government "concluded that the Court’s ruling in the second trial as to the Gabon conspiracy count would apply equally to defendants Spiller, Geri, and Alvirez. Although, as the Court knows, the government argued extensively in opposition to the defendants’ Rule 29 motions and does not agree with the Court’s ruling, the [G]overnment accepts the Court’s decision." Citing that ruling and other reasons identified in the February 21, 2012 motion regarding the other defendants, the Government reached the conclusion that further prosecution of the Gabon-related charges against the three were "unlikely to be successful."
With respect to Mr. Alvirez, the Government elected to not prosecute defendant him on the other charge (the Georgia conspiracy count), but warned that the investigation of that and related conduct will continue. Despite the losses in the Sting Case, the Government will determine whether to bring criminal charges relating to that conduct.
The case has received a great deal of scrutiny, including statements from the foreman in the second trial (discussed here) and an interesting story from the Washington Post regarding the relationship between the informant and federal agents. However, after 25 months, what Mr. Breuer termed "the largest action ever undertaken by the Justice Department against individuals for FCPA violations," resulted in no convictions.