United States v. Lawrence Hoskins, No. 3:12-CR-238 (D. Conn. Aug. 13, 2015) [click for opinion]

Defendant, a British national, worked as senior vice president of the Asia region for an energy company based in the UK.  Defendant was indicted by the U.S. government for approving improper payments to Indonesian officials to secure a project to build power stations for Indonesia’s state owned electricity company, in violation of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 78dd-1, et seq.  The government initially alleged that Defendant was directly liable under the FCPA as an “agent” of his company’s U.S. subsidiary.  Later, the government changed its theory to allege that Defendant was liable as a co-conspirator of the U.S. subsidiary.  Defendant filed a motion to dismiss the conspiracy count on the basis that he could not be subject to conspirator or accomplice liability under the FCPA.

The FCPA prohibits bribery of foreign government officials.  The statute provides three bases for jurisdiction over improper payments: (1) where “domestic concerns” or U.S. “issuers” of securities or their agents use U.S. interstate commerce in furtherance of the payment; (2) where the payments are made by U.S. citizens, nationals, or residents regardless of whether they use U.S. interstate commerce; and (3) where any persons acting in furtherance of an improper payment does so within the territory of the United States.

Defendant argued these jurisdictional provisions demonstrate that Congress did not intend for the FCPA to reach non-resident foreign nationals who act outside the territory of the United States, unless the actor was a U.S. issuer of securities, a domestic concern, or one of its agents.  The government countered that, even if Defendant did not fall into one of these categories, he was liable for conspiracy based on the general rule that accomplice liability applies even to persons who are be incapable of committing the substantive crime.

The court agreed with Defendant and dismissed, in part, the conspiracy charge.  The court relied on the principle set forth in the U.S. Supreme Court’s decision in Gebardi v. United States.  The Gebardi principle provides that, if Congress passes a statute that is meant to exclude a certain class of persons from liability, those persons cannot be subject to accomplice liability for violating the statute.  

The court reviewed the text, structure, and legislative history of the FCPA and concluded that Congress did not intend for non-resident foreign nationals to be subject to accomplice liability if they were not subject to direct liability.  The court noted, however, that, if the government pursued the theory that Defendant was subject to direct liability as an agent of a domestic concern, the Gebardi principle would not preclude conspiracy liability.  However, the government was precluded from arguing that Defendant could be held liable even if he was not an agent of a domestic concern.

Christina Wong of the San Francisco office contributed to this summary.