Following a two week trial, on August 4, 2011, a federal jury convicted Joel Esquenazi and Carlos Rodriguez, former executives of Terra Telecommunications Corp. (“Terra”), on all counts for their roles in a scheme to pay bribes to Haitian government officials at the state-owned Telecommunications D’Haiti S.A.M (Haiti Teleco). The DOJ’s press release is here.
- Esquenazi was the president and Rodriguez the vice president of Miami-based Terra. Both were convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and wire fraud, seven counts of FCPA violations, one count of money laundering conspiracy, and 12 counts of money laundering.
- According to the DOJ, Esquenazi and Rodriguez “authorized more than $800,000 in illegal bribe payments to Haitian officials in exchange for business advantages” in violation of the FCPA."
- Per DOJ, the purpose of these bribes “was to obtain various business advantages from the Haitian officials for Terra, including the issuance of preferred telecommunications rates, reductions in the number of minutes for which payment was owed, and the continuance of Terra’s telecommunications connection with Haiti.”
- The DOJ also said they “used shell companies to pay $890,00 in bribes from 2001 through 2005 to "successive directors of international relations" at Haiti Telco, and “created false records claiming that the payments were for “consulting services,” which were never intended to be performed or actually performed.”
- The defendants face a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost on the FCPA conspiracy charge. Each of the seven FCPA counts carries a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost.
- The money laundering conspiracy counts carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transactions.
- The government is seeking forfeiture against all defendants.
- This is just the latest entry of the DOJ's extensive FCPA enforcement action regarding bribes allegedly paid to Haitian government officials at Haiti Teleco. The jury verdicts rendered in this case were based upon indictments filed in December 2009. Multiple individual defendants had already plead guilty to FCPA violations and related money laundering charges.
- Esquenazi and Rodriguez are unique in the Haiti Teleco prosecutions in that they contested the DOJ’s charges at trial and also challenged the DOJ’s definition of “foreign official” under the FCPA. Esquenazi and Rodriguez almost certainly will appeal both the Court’s pre-trial ruling on their convictions.
- Additionally, whether the Court’s jury instruction on what constitutes a “instrumentality” of a foreign government under the FCPA survives appellate scrutiny is worth watching and should be instructive as to the limits of the FCPA’s jurisdictional reach.