Article: From 20 Years to Zero in Six Trial Days

As widely reported in the national media, Quinn Emanuel achieved a stunning outcome in the trial of our client, Joseph Sigelman, the co-founder and former Co-CEO of a Colombian oil company called PetroTiger (see, e.g., http://www.bloomberg.com/news/articles/2015-06-15/justice-department-stumbles-in-closely-watched-foreign-bribery-case; http://www.wsj.com/articles/ex-ceo-of-petrotiger-sentenced-to-probation-over-bribery-1434469990; What Does the PetroTiger Case Mean for FCPA Compliance? Sigelman’s Attorneys and Other Experts Weigh In, The FCPA Report, June 24, 2015). When trial began on June 2, 2015 in federal district court in New Jersey, Sigelman faced more than twenty years in prison and multi-million dollar penalties on multiple counts of bribery, receiving kickbacks, money laundering and wire fraud. After less than two weeks of a trial projected to last six weeks, the Government dropped five and a half of the six counts, including all of the most serious ones, and agreed to a deal that got Sigelman a sentence of probation with no jail time and financial penalties only a small fraction of what was originally sought by the Government.

As significant as the favorable sentence was the nature of the plea agreed to by the Government. Rather than insisting on an admission that Sigelman knew he was making improper payments to a foreign official (which Sigelman, in fact, did not know), the Government accepted a “conscious avoidance” plea that Sigelman would have known had he conducted appropriate due diligence. In essence, Sigelman was permitted to plead to a form of criminal negligence instead of actual knowledge. In sentencing Sigelman to probation with no jail time, Judge Joseph Irenas criticized aspects of the Government’s case, while comparing Sigelman’s offense to a “character flaw” and praising his prior good works and capacity to create jobs and do good in the future.
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In May 2014, after a two-year investigation, the U.S. Department of Justice indicted Sigelman on six counts alleging that he had conspired with Gregory Weisman (PetroTiger’s general counsel) and Knut Hammarskjold (PetroTiger’s Co-CEO), to accept kickbacks, launder money, commit wire fraud, traffic in criminal proceeds, and bribe an employee of the Colombian state-owned oil company, Ecopetrol, to win a multi-million dollar contract. At the time of his indictment, the deck was stacked against Sigelman, as both Weisman and Hammarksjold already had pled guilty to conspiring with Sigelman to pay bribes and accept kickbacks and had agreed to cooperate with the Government.

In fact, even before pleading guilty, Weisman had engaged in robust cooperation with the Government. In December 2012, only days after being approached by the FBI, Weisman agreed to surreptitiously record a three-hour long conversation he had with his client Sigelman in which Weisman tried with little success to get Sigelman to admit to the crimes with which the Government would eventually charge him. At the time the recording was made, Weisman was acting as the general counsel of one of Sigelman’s ventures, a multinational construction company based in the Philippines. He also had acted at various times throughout their relationship as Sigelman’s personal attorney.

Even though the recording was mostly favorable to Sigelman, Quinn Emanuel moved to exclude its use at trial on the basis that Weisman, as Sigelman’s current general counsel and sometime personal attorney, should not be permitted to exploit the privileged relationship between himself and Sigelman in an attempt to gather information against his client, a significant ethical breach by Weisman. Although the Court denied the motion, it proved to be an effective vehicle to introduce Judge Irenas to Weisman’s willingness to disregard his professional duties and act against his client. This issue ultimately would prove to be a critical one at trial.

In addition to the difficulties of having two of his former friends and colleagues cooperating against him, Sigelman faced the fact that the case against him had begun with a referral to the U.S. government by PetroTiger, the company that he had co-founded and once led as co-CEO, which had used a large U.S. law firm to conduct an internal investigation and report to the Government. While many white collar cases start with a defendant’s former employer making a self-disclosure, what made this one especially difficult was that the company itself was based in Colombia, and almost all of the relevant documents and witnesses were in Colombia as well. This meant that much of the key evidence in the case was not subject to the subpoena powers a criminal defendant usually enjoys. Without subpoena powers, Sigelman had very limited ability to obtain witnesses to testify on his behalf in court, and he had very limited access to documents. In contrast, the U.S. government had ready access to all the information it needed to put its case together because PetroTiger and Colombian law enforcement authorities were actively cooperating with the investigation. This was not a level playing field.

Quinn Emanuel immediately set to work assembling a team of lawyers familiar with the Colombian legal system and began fighting to get access to what Sigelman needed to defend himself. Through multiple rounds of litigation in the Colombian courts, the firm obtained documents that shed light on the allegations against Sigelman and provided critical information for investigative leads. Firm lawyers persuaded a number of Colombian witnesses to agree to come to the United States and testify on Sigelman’s behalf even though they had no legal obligation to do so and, due to the high-profile nature of the case in Colombia, faced the very real threat of retaliation in Colombia as a result.
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In total, the pretrial effort from May 2014 to June 2015 spanned several continents, multiple judicial systems, and involved firm personnel from a number of different offices both domestic and international.

On June 11, only six trial days into evidence, the Department of Justice agreed to the extraordinary deal that allowed Sigelman to walk away from the trial without spending a single day in jail. That watershed moment was the culmination of months of preparation and a sound trial strategy executed with great precision.

The first step was to persuade the jury that the Government’s case rested not on any hard evidence, but instead only on the untrustworthy and uncorroborated words of its two cooperating witnesses: Weisman and Hammarskjold. Lead partner Bill Burck set the stage in his opening statement, which carefully went through the key pieces of the Government’s documentary evidence and showed why none of it proved that Sigelman had committed any crime. At the same time, he introduced Weisman and Hammarskjold to the jury and explained why each was motivated to lie about Sigelman in order to save their own skins. The centerpiece of the opening was that the jury would ultimately conclude that the only truly incriminating evidence against Sigelman came from the testimony of the two cooperating witnesses who had every reason to lie to curry favor with the Government, but who could point to no hard documentary proof to corroborate their self-serving claims against Sigelman. The Quinn Emanuel team wanted to turn the Government’s greatest perceived strength—the testimony of Sigelman’s two friends and close business associates (one, his lawyer)—into its greatest potential weakness and make the case about the credibility of these cooperating witnesses. The press characterized Burck’s opening as folksy and down-to-earth, confident and compelling. See http://www.mainjustice.com/justanticorruption/2015/06/03/sigelman-trial-opens-with-tale-of-greed-by-prosecution-folksy-approach-by-defense/.

The next step was to prove that Weisman and Hammarskjold were not credible. As its first witness, the Government called the lead FBI agent who investigated the case. Burck conducted a seemingly friendly cross-examination and nudged the agent to embrace enthusiastically the accuracy of the notes he had taken during witness interviews. This would prove a problem for the Government’s next (and, as it turned out, last) witness, Weisman. The agent also admitted that the FBI had permitted David Duran, the alleged foreign official who was purportedly bribed, to enter and exit the U.S. without being charged with so much as a parking ticket. Duran was even allowed to vacation at Disneyworld with his wife while Sigelman was preparing for trial as an indicted criminal defendant. Duran’s adventures in the US would turn out to be significant at sentencing.

The prosecutors then conducted a three-day direct examination of Weisman and delivered their best salvo of evidence against Sigelman. At the end of the day on Monday, June 8, they relinquished the witness to partner Bill Price—and watched their case crumble.

In what the judge variously described as a “symphony” and as a “bloodletting,” Price conducted a cross-examination that systematically destroyed Weisman’s credibility. Within the first two hours of cross on Tuesday, Price had elicited admissions from Weisman that he had committed tax fraud, that he cared only about himself and not even his family members whom he had recruited to participate (probably unwittingly) in his tax fraud scheme, that he was testifying against Sigelman in hopes of avoiding jail time, and that he had sculpted several accusations against Sigelman, leaving out what Weisman conceded was the whole truth, to give the misleading impression that Sigelman had done something illegal (although, typical of Weisman, he blamed the Government, not himself). Under cross examination about discrepancies between his testimony and FBI notes of interviews they had previously conducted of Weisman, Weisman placed the blame squarely on the FBI agent—explaining that he had told the entire truth and the FBI agent had simply left out important information, mischaracterized what he told them, or taken inaccurate notes.

Relative to these other admissions, Weisman may have thought it innocuous when, as a result of Price’s carefully orchestrated questioning, he testified that during the course of his cooperation, an unnamed Government official had instructed him to commit a serious violation of his ethical duties as a lawyer. It was the third time in just a couple of hours that Weisman blamed the government for what appeared, on its face, to be inappropriate conduct by Weisman. In this last admission, the Quinn Emanuel team saw an opportunity to turn the Government against Weisman. During a break in testimony, the firm demanded that the Government identify the unnamed Government agent and hand over all the relevant documentation. Because its star witness had just testified that the Government had induced him to commit a serious ethical breach, the Government either had to own up to this misconduct or concede (as the Quinn Emanuel team always believed) that Weisman was lying. Minutes before Bill Price resumed his cross-examination of Weisman, the lead prosecutor told Price that Weisman’s statement was false.

Price then administered the coup de grâce. With just five questions, he was able to pin down Weisman and ask: “So what you said to the jury…under oath was false, correct?” “Yes,” Weisman responded. During follow up questioning, Weisman tried to back off this admission by saying that he had previously “misremembered” the facts. Price noticeably paused to consider which of the thousand deaths he could inflict by turning this statement against the witness, but the judge jumped into the silence and asked incredulously: “Misremembered? Did you have a hallucination?” “No, I just . . . .” Weisman trailed off.

Sensing that this was a prime opportunity to reach a favorable deal, Quinn Emanuel approached the prosecutors in the courtroom to see if they were ready to talk. They were. The judge sent the jury home early for a four-day weekend, and Burck negotiated the deal that resolved the case.

Perhaps the only downside to the early end of the trial was that the rest of the firm’s trial plan went unexecuted. In particular, partner Juan Morillo was waiting on deck to take on the most important legal issue in the case—whether Ecopetrol, the Colombian state-owned company that employed David Duran, was an instrumentality of the Colombian government as required by the FCPA. Morillo had used his unmatched expertise with transnational white collar investigations to pull together expert witnesses in Colombia, despite their initial reluctance to support a criminal defendant against the combined might of the United States and Colombian governments, and develop legal theories based on the complex interaction between American and Colombian law that went to the very heart of the case.

The efforts of Bill Burck, Bill Price, and Juan Morillo, would not have been possible without a dedicated team of counsel, associates, paralegals, and assistants who helped brainstorm the opening statement and cross-examinations, who found and prepared witnesses in the United States, Colombia, and Europe, who traveled across the globe to secure key documents, who penned the dozens of briefs and motions we filed pre-trial and during trial, and who handled the extensive logistics involved in bringing together a team of litigators from around the country to try a case against the U.S. government.

At sentencing, the judge questioned the Government’s complaint that FCPA cases present particular evidentiary difficulties that favor defendants. In particular, the judge noted that the Government had unique access to witnesses and evidence from Colombia, including David Duran, the alleged foreign official in this case. The judge rejected the assertion that Sigelman should receive any jail time as a deterrent to others, noting that the Government had made choices in the case, from relying on the testimony of Weisman to permitting Duran to enter and exit the U.S. at will, that helped lead to the outcome of the trial. The judge said to the lead prosecutor: “You chose not to complete the trial, not me. In some form you’re going to have to explain why.” For our client, the answer is clear.

The huge amount of preparation that went into every facet of this trial gave the Quinn Emanuel team confidence that they knew the Government’s case inside and out before the jury was even impaneled. There would be no surprises, and they were ready for anything and everything the prosecutors threw their way. The firm’s trial strategy wore down the Government’s case and opened up an opportunity to resolve the case favorably for our client without the risk inherent in taking the case to the jury. And then the Quinn Emanuel team’s solid relationship with the Government, built on professionalism and goodwill that were never compromised even in the heat of battle, enabled us to use that opportunity to secure for Sigelman the deal that saved him millions of dollars in penalties and, most importantly, saved him from potentially decades in prison.