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Perplexed – LexBlog


I am perplexed by some commentary regarding the Second Circuit’s recent decision in U.S. v. Hoskins (see here for the prior post).

For instance this law firm publication suggests that the Second Circuit limited the reach of the FCPA’s anti-bribery provisions.

This law firm publication states that the Second Circuit issued a decision regarding the scope of the FCPA.

Neither of these assertions are true.

First, some background.

In 2015, District Court Judge Janet Bond Arterton (D.Conn.) was faced with the disputed issue of  “whether a nonresident foreign national could be subject to criminal liability under the FCPA, even where he is not an agent of a domestic concern and does not commit acts while physically present in the territory of the United States, under a theory of conspiracy or aiding and abetting a violation of the FCPA by a person who is within the statute’s reach.”  Judge Arterton answered the question no and concluded that accomplice liability could not extend to Hoskins under the circumstances of the case and thus granted the motion to dismiss.

This decision was indeed a decision about the reach and scope of the FCPA’s anti-bribery provisions.

Similarly, when the DOJ appealed the decision to the Second Circuit the court framed the issue as follows:

“[W]e are asked to decide whether the government may employ theories of conspiracy or complicity to charge a defendant with violating the Foreign Corrupt Practices Act (“FCPA”), even if he is not in the categories of persons directly covered by the statute.”

This issue was indeed about the reach and scope of the FCPA’s anti-bribery provisions and the Second Circuit affirmed the district court’s ruling and stated that the “FCPA’s carefully-drawn limitations [did] not comport with the government” theory of prosecution.

Nevertheless, the Second Circuit allowed the government to pursue FCPA charges based on the factual issue of whether Hoskins was “an agent of a domestic concern.”

Six years after being charged and approximately 15 years after the alleged conduct at issue took place, in Fall 2019 the trial actually occurred and Hoskins “was found guilty … for his role in a multi-year, multimillion-dollar foreign bribery scheme and a related money laundering scheme.” (See here for the prior post).

However, in a major setback for the DOJ, in February 2020 Judge Arterton granted Hoskins motion for acquittal on all FCPA charges. (See here for the prior post). In pertinent part, Judge Arterton concluded “that even when drawing all reasonable inferences in the Government’s favor, the evidence adduced at trial cannot support the conclusion that Mr. Hoskins acted subject to API’s control such that Mr. Hoskins was an agent of API.”

Judge Arterton denied Hoskin’s motion for acquittal on the five money laundering charges he was convicted of by the jury. In sentencing Hoskins for the money laundering violations, Judge Arterton significantly rejected the DOJ’s 7-9 year sentencing recommendation and sentenced Hoskins to approximately 1 year.  (see here for the prior post).

Even so, and foolishly (see here), the DOJ appealed Judge Arterton’s granting of the motion for acquittal of the FCPA charges to the Second Circuit.

The DOJ framed the issue on appeal as follows:

“Whether, viewing the evidence in a light most favorable to the guilty verdict, a rational jury could have found that the defendant, a senior executive in a corporate support function of multinational holding company Alstom S.A., was an agent of a Connecticut-based Alstom business, Alstom Power Inc. (“API”), in the course of his assisting API to secure a power plant contract in Indonesia, including by hiring consultants to funnel bribes to Indonesian officials, where the defendant repeatedly followed API’s instructions and API was in charge of all facets of the project.”

In other words, the issue before the Second Circuit in the second Hoskins appeal was purely a factual and evidence issue.

As stated by the Second Circuit in its recent decision “the crux of this appeal is whether there was an agency relationship between Hoskins and API. […] The parties agree that the common law meaning of agency we apply here is the correct one.”

After reviewing the evidence presented at trial, the Second Circuit concluded that the “government failed to present sufficient evidence to allow the jury to find an agency relationship.”

That was not a finding about the reach or scope of the FCPA, it was simply a court acknowledging that a term is explicitly contained in the FCPA – “agent of … domestic concern” – and deciding whether the evidence was sufficient to satisfy the common law meaning of agency.

Another perplexing thread of commentary concerning the recent Second Circuit decision in Hoskins is how the decision
“could force DOJ to look beyond FCPA to prosecute foreign nationals.” (See here).

Umm … hello, news flash – Hoskins was charged, convicted and sentenced for money laundering offenses.

The post Perplexed appeared first on FCPA Professor.



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