U.S. Traders Charged With Conspiring to Bribe Foreign Bank Officials Plead Guilty

Two men have pleaded guilty in a New York federal court to six charges in connection with an alleged scheme to bribe government banking officials in Venezuela. The guilty pleas include conspiracy to violate the Foreign Corrupt Practices Act (FCPA), a statute that prohibits bribery, or similar influence, of foreign officials by “domestic concerns.” 15 U.S.C. § 78dd-2. The Securities and Exchange Commission (SEC) has filed a separate civil lawsuit against the two defendants and several others, asserting causes of action for various alleged violations of the Securities Act and the Securities Exchange Act. The case, which includes U.S.-based traders and a Venezuelan government official as defendants, demonstrates the broad extent of U.S. jurisdiction over white collar crime.

According to the government’s criminal complaint, which it filed under seal in March 2013 and released to the public in May, employees of a broker-dealer in Miami, Florida conspired to pay bribes or kickbacks to an official at the state economic development bank in Caracas, Venezuela. In exchange, the official would direct trading business to the broker-dealer. United States v. Clarke Bethancourt, No. 1:13-cr-00670, sealed complaint (S.D.N.Y., Mar. 12, 2013). The complaint identifies multiple wire transfers in six- and seven-figure amounts from the Miami defendants to a bank account in Switzerland allegedly controlled by an associate of the Venezuelan banking official, which the government alleges proves conspiracy to violate the FCPA and other offenses.

The FCPA applies to “domestic concerns,” defined as individual residents, nationals, and citizens of the U.S., as well as business organizations organized under U.S. law or with a primary place of business in the U.S. 15 U.S.C. § 78dd-2(h)(1). It prohibits such individuals or businesses from using “any means or instrumentality of interstate commerce” to attempt to influence a foreign official, or to induce a foreign official to use their influence on their own government, via payment or the promise to pay money or other incentives. Id. at § 78dd-2(a)(1). Individuals who violate the FCPA, in addition to civil penalties, may be punished by up to five years in prison and a $100,000 fine, while businesses may be fined up to $2 million. Id. at § 78dd-2(g). In practice, this means that any attempt to bribe or otherwise influence foreign countries is prosecutable under U.S. law if it involves a “domestic” actor using U.S.-based means of communication. The present case involved actions allegedly undertaken in Miami, on U.S. soil, even if the alleged undue influence took place in Venezuela.

The SEC has also filed a civil suit claiming that many of the trades that occurred in the alleged scheme, as well as the resulting transaction fees, were fraudulent. SEC v. Clarke Bethancourt, No. 1:13-cv-03074, first am. complaint (S.D.N.Y., Jun. 12, 2013). This lawsuit seeks civil penalties against the individual defendants, injunctive relief, and disgorgement of all “ill-gotten gains” from the allegedly unlawful conduct. Id. at 37.

Defendants in criminal cases should consult an experienced criminal defense attorney in order to ensure their Constitutional and procedural rights are secure. White collar criminal defense attorney Michael J. Brown has fought for the rights of west Texas defendants in criminal cases for more than twenty years. To schedule a confidential consultation to discuss your case, contact us today online or at (432) 687-5157.

Web Resources:

United States v. Clarke Bethancourt (PACER registration required), No. 1:13-cr-00670, U.S. District Court, Southern District of New York
Sealed complaint (PDF file), United States v. Clarke Bethancourt, No. 1:13-cr-00670, U.S. District Court, Southern District of New York, March 12, 2013
First amended complaint (PDF file), SEC v. Clarke Bethancourt, No. 1:13-cv-03074, U.S. District Court, Southern District of New York, June 12, 2013
More Blog Posts:

SEC Enforcement Action Results in Five-Year Ban on Acting as Officer or Director in Any Public Company, Texas Criminal Lawyer Blog, August 21, 2013
SEC Uses Facebook to Identify Insider Trading Suspect’s Alleged Source, Texas Criminal Lawyer Blog, June 26, 2013
Trader Waives Indictment and Pleads Guilty in Alleged Fraudulent Stock Scheme, Texas Criminal Lawyer Blog, April 24, 2013

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