Canadian white collar criminals doing business abroad beware: offering bribes around the globe does not protect you from prosecution here in Canada. Nazir Karigar, the first individual to be convicted at trial under Canada’s Corruption of Foreign Public Officials Act(CFPOA), was recently sentenced to three years in jail for a bribe that was never actually paid.
The CFPOA came into force in 1999 as Canada’s means of ratifying the OECD’sConvention on Combating Bribery of Foreign Public Officials in International Business Transactions. Soon after the Act was enacted, the Canadian government was criticized by both the OECD and Transparency International for its failure to take action against Canadians alleged to have bribed officials abroad.
Karigar was convicted of offering bribes to Air India officials and India’s then Minister of Civil Aviation in order to secure a major contract from Air India for the provision of facial recognition software and related equipment contrary to s. 3(1)(b) of the CFPOA. At the time of the offence, Karigar acted as a consultant to Cryptometrics Canada, which is based out of Ottawa. Karigar approached Cryptometrics with a plan to obtain a contract with Air India by bribing Indian public officials to get the deal done. Karigar and his business partner were to receive thirty percent of the revenue stream from any resulting Air India contract.
The bribes were never paid, but not from any lack of effort on Karigar’s part. According to the trial decision, Karigar travelled regularly to India to meet with the key public officials and was able to obtain “inside information” about proposed tender terms and competitors. He kept Cryptometrics informed about which Air India officials would be paid bribes, the amounts to be paid, and shares in Cryptometrics to be doled out. This incriminating evidence all ended up in spread sheets, and Karigar admitted in statements to the RCMP that he was the one that furnished this incriminating evidence.
On two separate occasions, Cryptometrics transferred to Karigar a total of $450,000 for the payment of bribes, and the plan appeared to bear fruit. Cryptometrics and another company controlled by Karigar were the only two companies short-listed as qualified bidders. Everything appeared to be falling into place as draft contracts together with updated bribe spreadsheets were circulated, but the project faced delays and the plans ultimately came crashing down.
Karigar and Cryptometrics had a falling out. Cryptometrics sought a return of the monies it had given to Karigar. Karigar acted quickly by reporting the bribes, under a variety of pseudonyms, to both Canadian and American authorities, and a criminal investigation was commenced.
In the trial decision, Justice Hackland held that a conspiracy to bribe foreign public officials is a violation of the Act, and the mental element of the offence is the agreement to pursue an unlawful object – in this case the plan to bribe public officials. Karigar was found guilty for the intention to bribe: there was no need for the bribe to have actually been paid.
Under the CFPOA as it read at the time of Karigar’s illegal actions, the maximum sentence that could be imposed for a breach of the Act was five years imprisonment. Amendments to the Act have since increased this amount to 14 years, reflecting a trend in Canada’s increased prosecution of white collar crime.
In sentencing 67-year old Karigar to three years in jail, Justice Hackland emphasized the deterrence aspect of his decision, and, in particular, the negative effects of bribery on the rule of law in developing countries.
This decision is an example of how the Canadian government is taking steps to give the CFPOA more teeth. In addition to this recent conviction, the RCMP is in the process of conducting at least 34 other investigations. Amendments to the Act made in June of 2013 have also made it easier to obtain convictions and impose more serious consequences for breaches of the Act. While Karigar was the first, he will not be the last to be tried and convicted under the CFPOA.