On August 5, 2009, the government secured its second trial conviction of the year when former U.S. Congressman William J. Jefferson, the first U.S. public official to be charged under the FCPA, was found guilty by a federal jury in Alexandria, Virginia, on 11 of 16 counts of the indictment, including soliciting and taking bribes, depriving constituents of his honest services, money laundering, racketeering and conspiracy to violate the FCPA.1 Jefferson was acquitted on the counts that charged him with a substantive violation of the FCPA and with obstruction of justice.
Jefferson was indicted in June 2007 by a federal grand jury on multiple corruption related charges.2 The indictment alleged that from August 2000 to August 2005, Jefferson, then a member of the U.S. House of Representatives from Louisiana, used his public office to corruptly seek, solicit and direct that things of value be paid to himself and his family members in exchange for his performance of official acts to advance the interests of persons and businesses who offered him the bribes.3 He and members of his family were alleged to have sought and received hundreds of thousands of dollars in the form of monthly retainers, consulting fees, revenues and profits from certain businesses, flat fees for the sale of items, and stock ownership in the companies seeking his official assistance.4 The indictment further alleged that Jefferson agreed with representatives of certain of these companies to pay bribes to various Nigerian government officials. According to the indictment, Jefferson was responsible for negotiating, offering and delivering bribes to high-ranking “Nigerian Official A,” identified at trial as former Nigerian Vice President Atiku Abubakar.
The indictment alleged that, on or about July 18, 2005, Jefferson met with Abubakar, identified in the indictment as “Nigerian Official A,” at his home in Potomac, Maryland, and offered to pay him a bribe to induce him to use his influence to gain “commitments” from NITEL, the government-controlled main telecommunications service provider in Nigeria, for the benefit of one of Jefferson’s business ventures.5 In a subsequent meeting with a partner in that venture, Jefferson allegedly explained that the bribe would include a “front-end” cash payment to Abubakar and, thereafter, profit-sharing in the business. According to the indictment, Jefferson later received $100,000 in cash from his business associate for delivery to Abubakar. The Jefferson associate, businesswoman Lori Mody6 cooperated with the government and taped her conversations with the congressman.7
On August 3, 2005, Federal Bureau of Investigation agents executed a search warrant at Jefferson’s Washington, D.C., home where they found $90,000, in $10,000 increments, wrapped in aluminum foil, and concealed in the freezer in boxes of Boca burgers and Pillsbury pie crusts.8
The Trial and the Verdict
In addition to testimony regarding the money found in the freezer, prosecutors introduced a videotape of Mody giving Jefferson a briefcase containing $100,000 in marked bills. During that conversation, Jefferson told Mody that in order for her telecom company to win a contract in Nigeria, he would need to provide Abubakar $500,000 “as a motivating factor.” 9 Prosecutors argued that Jefferson had been unable to deliver the cash because the FBI had raided his home four days after he received the money from Mody. Jefferson’s attorney contended that Jefferson had placed the cash in his freezer for safekeeping while he was away during the August Congressional recess.10
The jury acquitted Jefferson on the substantive FCPA count of the indictment, but convicted him on the count which charged him with conspiracy to solicit bribes, deprive citizens of honest services by wire fraud and violate the FCPA. As no special verdict form was used, it is not known whether the jury found that each object of the charged conspiracy had been proved.
Judge Ellis scheduled sentencing for October 30, 2009 and allowed Jefferson to remain on bond despite the government’s claim that he posed a flight risk.11 Under federal sentencing guidelines, which are optional, Jefferson could face up to twenty years in prison.12 He must also contend with an upcoming forfeiture hearing based on the jury’s finding that he and his family received $470,000 and over 30 million shares of stock as a result of criminal activities.13 Jefferson also faces a shareholders derivative action by investors in iGate Inc., the technology company for which Jefferson sought contracts with several West African nations in return for payments to companies controlled by his family. The iGate shareholders are seeking restitution from Jefferson, his wife and Vernon Jackson, iGate’s Chief Executive Officer.14 On August 12, 2009, Jefferson filed a motion for a new trial.15
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