Catch Me If You Can: Extradition of FCPA Violators
August 24, 2015
By: Lindsay Simmons
In this era of Foreign Corrupt Practices Act (FCPA) enforcement, the Department of Justice (DOJ) has a less than perfect track record of successful prosecutions against corporate defendants. As reported here previously, many of these cases are settled using resolution mechanisms that are not subject to any meaningful judicial scrutiny. Another problem – one that does not immediately come to mind regarding these prosecutions, but is an increasing dilemma in our global economy – is how DOJ can get its hands on its targets, that is, extradition of alleged FCPA violators to stand trial in the U.S.
For example, in April 2014 DOJ criminally charged Dmitry Firtash, a Ukrainian, and several others “with participating in an alleged international racketeering conspiracy involving bribes of state and central government officials in India to allow the mining of titanium minerals.” Prior to April 2014 Firtash was arrested in Austria and paid $174 million to post bail. The U.S. initiated extradition proceedings to bring Firtash to the U.S. to face FCPA charges.
During the extradition proceedings Firtash claimed he was an innocent party caught at the center of a “battlefield for the two biggest global players of Russia and the USA”. In its recent ruling on the U.S.’s request to extradite Firtash, the Austrian court agreed.
Specifically, the Austrian judge refused to order the extradition of Firtash “siding with defense lawyers who said the American request was politically motivated.” The court’s ruling “amounted to a scathing rebuke of the Justice and State Departments, and reflected the diminished credibility of the United States authorities, even in the eyes of a European ally.”
DOJ has denied any political motivation in the case and, in a statement issued by the State and Justice Departments, said it was “disappointed” by the ruling and hoped for an appeal.
The Firtash enforcement action is certainly not the first Foreign Corrupt Practices Act enforcement action against a foreign national in which the DOJ has suffered extradition defeat. In 2012, U.S. efforts to extradite Victor Kozeny from the Bahamas to stand trial and defend against FCPA/money laundering charges pending in the Southern District of New York were unsuccessful. In that case the opinion of the court (the Bahamian Privy Council) also included some unfavorable comments on the merits of the Justice Department’s extradition case. More recently the “Siemens cases” demonstrated the difficulties DOJ faces with extradition for FCPA violations.
It is impossible to say what will happen moving forward, but one thing appears clear: DOJ has not and will not give up on its aggressive prosecution of FCPA violations, regardless of the location of the alleged perpetrators and the difficulties associated with extradition.
Lindsay Simmons is responsible for the contents of this Article.
© Jackson Kelly PLLC 2015