Non-US citizen convicted of violating the Foreign Corrupt Practices Act despite no practical ties to US

Posted in Risk advisory Compliance

A jury in a federal court trial in Connecticut recently convicted Lawrence Hoskins, a former Alstom SA executive and United Kingdom national, for participating in a scheme to bribe government officials in Indonesia.

This case raised significant questions about the jurisdictional reach of the Foreign Corrupt Practices Act (FCPA) as Hoskins is not a US citizen, was not employed by a US company, and never set foot on US soil while working for Alstom. Nevertheless, after only a single day of deliberations, the jury quickly determined that he was acting as an agent of Alstom's US subsidiary – Alstom Power Inc. of Connecticut – when facilitating a bribery scheme and therefore fell within the broad scope of the FCPA.

The question of what it means to be an agent for purposes of the FCPA became a critical question after the trial judge ruled, and the Second Circuit affirmed, that a non-US citizen, national, or resident could not be held criminally liable for conspiring to violate the FCPA or aiding and abetting a violation of the FCPA. Thus, the only path to criminal liability would be if the DOJ could prove beyond a reasonable doubt that Hoskins was acting as an agent for a culpable company that was within the FCPA's jurisdiction.

During the trial, the DOJ focused on, among other things, Hoskins' relationship with Alstom's US subsidiary, arguing that Hoskins identified how to make improper payments to certain specific Indonesian government officials in exchange for assistance in securing a US$118 million contract for Alstom Power Inc. of Connecticut and its consortium partner, Marubeni Corporation, to provide power-related services.

When US District Judge Janet Bond Arterton provided her instructions to the jury prior to deliberations, she told the jury that the definition of "agent" includes a manifestation by the principal (Alstom's US subsidiary) that the agent will act for it; the agent's acceptance of an "undertaking"— meaning "acts or services" for the principal; and an understanding that the principal is "in control" of those acts or services. Judge Bond Arterton specifically noted that in this case, agency must be "in connection with the specific events related to the contract" at issue.

With that definition in mind – which is not tethered to whether the alleged agent personally has any connection to the US – the jury convicted Hoskins of six counts of violating the FCPA (in addition to separate money laundering related charges) after a single day of deliberation.

Fully litigated FCPA cases are rare. Given its success in this case, the DOJ will be emboldened to keep pursuing aggressive theories of jurisdiction in ways that can capture foreign individuals with little practical connection to the US. 

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