Prosecutors in the District of Connecticut have appealed a district court’s ruling that conspiracy and aiding and abetting charges cannot be used to extend the FCPA’s jurisdictional reach.
The FCPA has three jurisdictional bases:
- where a “domestic concern” or U.S. “issuer” of securities, or any officer, director, employee, or agent thereof (regardless of their nationality) makes use of U.S. interstate commerce in furtherance of a corrupt payment, 15 U.S.C. §§ 78dd-1(a), 78dd-2(a);
- where a U.S. citizen, national, or resident acts outside the United States in furtherance of a corrupt payment, regardless of whether they make use of U.S. interstate commerce, id. § 78dd-2(i); and
- where any other person, while in the territory of the United States, acts in furtherance of a corrupt payment, regardless of nationality and the use of interstate commerce, id. § 78dd-3.
The question presented in United States v. Hoskins, 12-CR-238 (D. Ct.) is whether conspiracy or aiding and abetting charges can be used to extend the reach of the FCPA to a nonresident foreign national even if he is not an agent of a domestic concern and does not commit acts while physically present in the territory of the United States.
The defendant, Lawrence Hoskins, is a British national and was employed as a Senior Vice President for the Asia Region by Alstom UK and assigned to Alstom Resources Management S.A. in France. Hoskins is facing charges that he conspired by acting “together with” a domestic concern (Alstom Power U.S.) to violate various provisions of the FCPA.
Although the DOJ’s FCPA Resource Guide provides that foreign nationals and companies can be held liable for conspiring to violate the FCPA “even if they are not, or could not be, independently charged with a substantive FCPA violation,” the district court held that such artful pleading cannot extend the FCPA’s jurisdictional reach. Parsing the statute’s legislative history, the district court concluded that Congress had purposefully carved such individuals out of the reach of the FCPA. It then applied the so-called Gebardi principle (named after the Supreme Court’s decision in Gebardi v. United States, 287 U.S. 112 (1932)), which provides that the Government cannot use a conspiracy or aiding and abetting charge to circumvent Congressional intent.
After losing its bid for reconsideration, the government filed a notice of appeal this month.
The government’s continuing efforts to expand the FCPA’s substantive and jurisdictional reach, combined with courts’ heightened sensitivity to issues of extraterritoriality, will serve as an important backdrop to this appeal.