On August 15, 2013, Mr. Justice Hackland of the Superior Court of Justice (Ontario) convicted Nazir Karigar of conspiring to bribe a foreign public official, contrary to the Corruption of Foreign Public Officials Act. This case is significant for several reasons, not least of which is that this marks the conclusion of the first trial under the Act. All previous prosecutions brought under the Act concluded in guilty pleas and involved charges against corporations, as opposed to individuals. The findings of Justice Hackland will doubtless have implications for the forthcoming trials of Ramesh Shah and Mohammad Ismail, two former executives of SNC Lavalin charged with violations under the Corruption of Foreign Public Officials Act in relation to the PADMA Multipurpose Bridge project in Bangladesh.
Mr. Nazir Karigar worked for the Canadian subsidiary of CryptoMetrics, an American company that was trying to win a lucrative contract with Air India for biometric security systems. Executives at CryptoMetrics allegedly conspired to bribe officials at Air India and the Indian government, including a federal cabinet minister.
There were three key issues during the trial:
Under recent amendments to the Corruption of Foreign Public Officials Act, the Canadian government can prosecute Canadian citizens or permanent residents, as well as companies incorporated in Canada, for crimes committed anywhere in the world regardless of whether the crime has any other connection to Canada (see BLG White Collar Crime Bulletin, “Significant Amendments to Canada’s Corruption of Foreign Public Officials Act”: http://www.blg.com/en/newsandpublications/publication_3416).
Mr. Karigar, however, was prosecuted under the previous version of the Act which required the Crown to provide that the conduct in question had a “real and substantial connection” to Canada. Mr. Karigar argued that the Canadian courts lacked jurisdiction over his conduct on the basis that CryptoMetrics was a US company, its directing minds were US citizens residing in the US, the funds for the alleged bribes came from the US, and any bribery that may have occurred took place in India.
While the court noted that crimes involving foreign corruption are inherently difficult to prosecute, since the illicit acts often take place in part or in whole in other countries, the court ultimately assumed jurisdiction over Mr. Karigar’s conduct by adopting a very liberal interpretation of territorial jurisdiction.
The Court held that the totality of the business relationship between CryptoMetrics and Air India had to be considered, not merely the corrupt activities alleged. If CryptoMetrics had been successful in winning Air India’s business, the contract would have been with CryptoMetrics Canada. Most of the work and resulting jobs would have been in Ottawa. This provided substantial and sufficient connection to Canada for the Canadian courts to take jurisdiction over the offence.
Of significance, the court found that no substantial element of an offence need occur in Canada for the court to take jurisdiction over crimes of foreign corruption. Justice Hackland noted that the entire purpose of the Act is establish a level playing field in international business, and this goal would be thwarted if people or corporations in Canada could avoid prosecution simply because the offence took place elsewhere.
Interpretation of the Word “Agree”
Section 3(1) of the Act makes it a criminal offence for anyone to directly or indirectly give, offer, or agree to give or offer a corrupt benefit to a foreign public official. Mr. Karigar argued that the term “agree” required both offer and acceptance (an “agreement”), such that the Crown should be required to prove that the accused had agreed to provide a bribe to a named recipient, who in turn had agreed to accept it. There was in fact no evidence that any bribe had actually been paid.
The Crown argued that it did not have to prove that a bribe had been completed (or accepted) in order to ground a prosecution under the Act. Instead, the Crown took the position that the term “agree” in the Act could cover an agreement between conspirators to bribe a foreign public official. Accordingly, merely being party to such a conspiracy was sufficient to ground a conviction under the Act.
The Court looked to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which is the acknowledged genesis of the Act. Noting that the OECD Convention requires member states to prohibit conspiracies as well as actual corrupt payments, the Court adopted the Crown’s position and held that the term “agree”, as used in the Act, extends to conspiracies as well as actual agreements to pay or receive a bribe.
Proof Beyond a Reasonable Doubt
As with any criminal case, the Crown had the burden of proving the accused’s guilt beyond a reasonable doubt. While the defence conceded that someone at CryptoMetrics had likely intended to bribe one or more Indian public officials, there was only circumstantial evidence against Mr. Karigar. There was considerable evidence that all business decisions at CryptoMetrics (which would include agreements to offer bribes) were tightly controlled by a handful of American executives. Mr. Karigar argued that even if it were assumed that he had knowledge of any bribes, mere knowledge of a crime committed by others does not result in criminal liability under Canadian law.
No directing minds from CryptoMetrics testified, nor did anyone from India. The Indian government did not provide any evidence or known investigative assistance.
However, the Crown supported their case with “voluminous” documentary evidence that had been obtained through search warrants, wiretaps, and voluntary statements by the accused to authorities in Canada and the US. A CryptoMetrics Canada executive testified under a grant of immunity.
This led the Court to the “inescapable conclusion” that there was at minimum a conspiracy to bribe public officials in India, and that the accused was a member of the conspiracy. Adopting the Crown’s broader definition of “agree”, the Court convicted Mr. Karigar of the crime charged. Mr. Karigar’s sentencing hearing will be scheduled in the near future.