Court rules that the US Department of Justice cannot expand the FCPA’s reach simply by charging non-resident foreign nationals with conspiracy.

Earlier this summer, Lawrence Hoskins, a British national and former senior vice president for the Asia region of French energy firm Alstom Holdings SA, filed a motion to dismiss a conspiracy count in the US government’s prosecution of him for alleged violations of the Foreign Corrupt Practices Act (FCPA).^[1] In 2013, the US Department of Justice charged Hoskins, “together with others,” with bribing Indonesian officials in exchange for assistance in securing a power contract.^[2] This month, US District Court Judge Janet Bond Arterton dismissed the conspiracy charge, in part, holding that a nonresident foreign national cannot be subject to criminal liability under the FCPA under an accomplice theory of liability where he or she is not an agent of a domestic concern and does not commit acts while physically present in US territory.^[3] Under the court’s opinion, Hoskins can still be found liable for conspiring to violate the FCPA where the government proceeds under the theory that he was an agent of a domestic concern.^[4]

In his motion to dismiss, Hoskins asserted that the government could not charge conspiracy to violate the FCPA unless the charge alleges that the non-resident defendant is an officer, director, employee, agent of, or stockholder acting on behalf of a domestic concern.^[5] The government’s theory was that, even if a jury found that Hoskins was not an agent, he could still be convicted on one of the other accomplice theories, namely “‘aiding and abetting, causing, and Pinkerton’ liability.”^[6] Thus, in a motion in limine simultaneously considered by the court, the government sought to prohibit Hoskins from arguing to the jury that the government must prove Hoskins was an agent of a domestic concern.^[7]

In partially dismissing the conspiracy charge, Judge Arterton relied on a 1930s-era US Supreme Court case, Gebardi v. United States,^[8] for the proposition that where Congress excludes a class of individuals from liability under a statute, the Executive Branch cannot circumvent that intent by charging a conspiracy to violate the same statute.^[9] The district court found that the text, structure, and legislative history of the FCPA demonstrate that Congress “did not intend to impose accomplice liability on non-resident foreign nationals who were not subject to direct liability.”^[10] Thus, it granted, in part, Hoskins’ motion to dismiss and denied the government’s motion in limine.

The case is not dismissed in its entirety. The government alleges six substantive FCPA violations, asserting that Hoskins was an agent of a domestic concern and aided and abetted the domestic concern.^[11] The indictment also contains one count for conspiracy to commit money laundering and four substantive money laundering and aiding and abetting charges.^[12] Moreover, as stated above, a conspiracy conviction is still possible if Hoskins is determined to have been an agent of a domestic concern. In late 2014, Judge Arterton ruled that it is for a jury to decide whether Hoskins acted as an agent of a domestic concern for purposes of the FCPA.^[13] For the time being, it appears that a jury will have the chance to do so.

_{[1]. Caroline Simson, “Ex-Alstom Exec Fights FCPA Charges In Corruption Suit,” Law360 (June 4, 2015), available here; US Department of Justice, “Former Senior Executive of French Power Company Charged in Connection with Foreign Bribery Scheme” (July 30, 2013), available here; United States v. Hoskins, 3:12cr238 (JBA), Dk. # 209 (Apr. 15, 2015) at 1.}

_{[2]. US Department of Justice, “Former Senior Executive of French Power Company Charged in Connection with Foreign Bribery Scheme” (July 30, 2013), available here.}

_{[3]. Prof. Mike Koehler, “Judge Trims DOJ’s FCPA Enforcement Action Against Lawrence Hoskins,” FCPA Professor (Aug. 17, 2015), available here; United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 1, 4-5.}

_{[4]. Stephanie Russell-Kraft, “Judge Raises Hurdle for DOJ FCPA Conspiracy Charge,” Law360 (Aug. 14, 2015), available here; United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 20.}

_{[5]. United States v. Hoskins, 3:12cr238 (JBA), Dk. # 254-1 (June 4, 2015) at 1, 4–5.}

_{[6]. United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 4.}

_{[7]. Prof. Mike Koehler, “Judge Trims DOJ’s FCPA Enforcement Action Against Lawrence Hoskins,” FCPA Professor (Aug.17, 2015), available here.}

_{[8]. Gebardi v. United States, 287 U.S. 112 (1932)}

_{[9]. United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 8. The court noted that this principle also extends to aiding and abetting liability. Id. (citing United States v. Amen, 831 F.2d 373, 381 (2d Cir. 1987).}

_{[10]. United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 11–21.}

_{[11]. United States v. Hoskins, 3:12cr238 (JBA), Dk. # 209 (Apr. 15, 2015) at 28; United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 3 n. 1.}

_{[12]. United States v. Hoskins, 3:12cr238 (JBA), Dk. # 270 (Aug. 13, 2015) at 30, 32–33.}

_{[13]. Stephanie Russell-Kraft, “Judge Raises Hurdle for DOJ FCPA Conspiracy Charge,” Law360 (Aug. 14, 2015), available here.}