Foreign Corrupt Practices Act (FCPA) enforcement and the prosecution of individuals continue to be key areas of focus for the U.S. Department of Justice, which has repeatedly emphasized its continuing “commitment to holding individuals accountable for transnational corruption.” Just last week, in one of the rare FCPA cases to go to trial, a federal jury in Boston found the chairman and CEO of an investment firm and a member of the investment firm’s board of directors guilty for participation in a scheme to bribe officials of the Republic of Haiti in connection with a planned multibillion-dollar infrastructure project in that country.
Joseph Baptiste, a retired U.S. Army colonel and Maryland dentist, and Richard Boncy, an attorney and dual U.S. and Haitian citizen who resides in Spain, were each convicted of conspiring to violate the FCPA and the Travel Act, while Baptiste was also found guilty of additional Travel Act violations and of money laundering conspiracy. The FCPA and Travel Act counts carry a maximum prison term of five years each, while the money laundering conspiracy charge carries a 20-year maximum.
The FCPA makes it a federal crime for any U.S. person or entity, or any foreign persons while in the U.S., directly or indirectly, to make or offer a corrupt payment to any foreign government official to obtain or retain business. In any individual prosecution under the FCPA, the government must demonstrate beyond a reasonable doubt an individual’s corrupt and criminal intent.
According to evidence presented at trial, Baptiste and Boncy solicited bribes from undercover FBI agents posing as potential investors in connection with a proposed development project for a port in the Mole St. Nicolas area of Haiti. The project involved the construction of multiple cement factories, a shipping-vessel recycling station, a power plant, and petroleum depot and tourist facilities. The estimated cost of the project was $84 million.
The government alleged (and ultimately proved) that the men intended to bribe government officials. For instance, during a recorded meeting in a Boston-area hotel, Baptiste and Boncy told agents that, to secure government approval for the project, they planned to channel payments to Haitian officials. The bribes would be funneled through Baptiste’s charity, the National Organization for the Advancement of Haitians, to high-level government officials. Payments to charities is a growing interest of the DOJ.
In another instance, Baptiste said in a recorded call that it would be necessary to “grease the paws” of candidates for elected office by contributing to their campaigns. In yet another call, Baptiste allegedly sought Boncy’s approval to offer a job to the Haitian prime minister’s aide, and then did just that in a call with the aide the next day. Prosecutors said the job offer helped secure a letter of support for the project from then-Prime Minister Evans Paul.
The government was represented in the case by a joint team from the DOJ’s Criminal Division and the U.S. Attorney’s Office for the District of Massachusetts. Baptiste and Boncy are both scheduled to be sentenced by U.S. District Judge Allison D. Burroughs on September 12, 2019.
Historically, the U.S. government has generally been able to avoid significant litigation challenging its broad interpretation of the FCPA because corporations – the targets of most FCPA investigations – are reluctant to risk indictment, let alone trials. By contrast, individual criminal defendants are more likely to go to trial, particularly in the FCPA context. Increased prosecution of individuals under the FCPA could, theoretically, result in more cases actually going to trial, as well as increased litigation and court rulings over the government’s aggressive interpretation and enforcement of the FCPA.
But individual prosecutions under the FCPA are by no means a novel occurrence. And there is no question, especially since the Yates Memorandum, that the DOJ is focused on bringing cases against responsible individuals. This is further reason why individuals who engage in international business transactions, particularly in high-risk countries and high-risk industries, are well-advised to be aware of these risks and to take appropriate steps to address and avoid them.