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In Blow to U.S. Government, Court Overturns Former Alstom Executive's FCPA Convictions

February 28, 2020
Firm Memoranda
On February 26, 2020, a federal judge in Connecticut dealt yet another blow to the U.S. Department of Justice's (DOJ) aggressive approach to prosecuting foreign companies and individuals for overseas bribery. In a 29-page decision, U.S. District Court Judge Janet Bond Arterton held that prosecutors failed to prove beyond a reasonable doubt that former Alstom S.A. executive Lawrence Hoskins was an "agent" of a U.S. domestic concern and granted Hoskins's post-trial motion for acquittal on all seven counts relating to the Foreign Corrupt Practices Act (FCPA). The Judge denied the motion as to four money laundering counts.
DOJ had previously suffered a significant setback in the case when the U.S. Court of Appeals  for the Second Circuit ruled that foreign nationals acting outside the physical territory of the United States cannot be prosecuted for violating the FCPA under aiding-and-abetting or conspiracy theories. The Second Circuit stated that "the FCPA clearly dictates that foreign nationals may only violate the statute outside the United States if they are agents, employees, officers, directors, or shareholders of an American issuer or domestic concern." United States v. Hoskins, 902 F.3d 69, 97 (2d Cir. 2018). Following this decision, the U.S. Government tried, and a jury ultimately convicted, Hoskins on the theory that-although he was a British national and former executive of a French company who operated outside the United States-he had acted as the agent of Alstom's U.S. subsidiary.
In overturning the jury's verdict on the FCPA charges, Judge Arterton concluded that while the Government demonstrated that the U.S. subsidiary had exercised authority over the process of hiring consultants for a project in Indonesia (which consultants Alstom allegedly used to bribe foreign officials in order to secure a contract), and that at times Hoskins assisted the U.S. entity in conducting that process, prosecutors had identified no evidence that the U.S. company "control[led] Mr. Hoskins's actions in a manner consistent with agency relationships." This decision, and the Second Circuit's earlier ruling, shows that DOJ's jurisdictional reach has its limits. On the other hand, it must be noted that the Government can and likely will appeal; that even if the acquittals are affirmed on the facts of this specific case, DOJ will still have the ability to prosecute foreign nationals for FCPA violations in other cases where agency can be shown; and that the money laundering convictions against Mr. Hoskins continue to stand. It is thus clear that U.S. prosecutors still have powerful tools at their disposal to go after non-U.S. persons accused of overseas corruption.

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If you have any questions about the issues addressed in this memorandum, or if you would like a copy of any of the materials mentioned in it, please do not hesitate to reach out to:
William Burck
Phone: 202-538-8120
Stephen Hauss
Phone: 202-538-8111