Publications - 27/04/20
Federal Judge in the United States partially upholds request for acquittal to former British Alstom employee for alleged FCPA violations performed abroad
On February 26, 2020, a US federal court in Connecticut granted, in part, a motion of acquittal for the defendant Lawrence Hoskins, in the case United States v. Hoskins. This case is relevant, as there are few cases in which a final court decision on FCPA charges is reached.
Hoskins is a British citizen and a former employee of Alstom UK Limited, a British subsidiary of Alstom, and worked mostly for Alstom Resource Management SA, another subsidiary of Alstom. The charges are related to the Tarahan Project in Indonesia, in which an Alstom subsidiary in Indonesia was contracted, along with other companies, to build a power plant in Indonesia. In connection to the Tarahan Project, Hoskins assisted Alstom to hire two consultants, Pirooz Sharafi and Azmin Aulia, to pay bribes to Indonesian authorities in order to guarantee the Taharan Project contract. Alstom Power Inc. (API), an American subsidiary of Alstom, is the headquarter of Alstom international utility boiler business and it was heavily involved on the Taharan Project.
The Department of Justice accused Hoskins, on July 30, 2013, of FCPA violations and of money laundering. Regarding the FCPA violations, in the absence of evidence that Hoskins would have performed any action in American territory, the American government argued that he was acting as an agent of Alstom American Subsidiary, although he was linked to another company and worked in another location other the US.
The prosecution was made supported by article §78dd-2 of the FCPA, which establishes that any manager, director, employee, agent, or stockholder of an American company can be prosecuted by the American jurisdiction for acts of corruption performed abroad, even if any of acts of the criminal practiced did not happened in the US. This means that anyone who works for an American company – such as a manager, director or employee – can be prosecuted in the US, if acts of corruption are perform in behalf of such company, even if not in American territory. The term agent can be understood as someone who acts in the interest and under control of the company, but does not necessarily have a working relationship with such company.
The jury found Hoskins guilty for FCPA violations and acts of money laundering. After reviewing the case, the Court granted the request for acquittal regarding the FCPA violations charges. The Court found that a rational jury, a concept that does not exist in Brazilian law, but which resembles the hypothesis that the jury convicted without the support of enough evidence in the case, could not have concluded that was enough evidence to prove that Hoskins acted as an agent of Alstom Power Inc in the Taharan Project.
The Court recognized, on the other hand, that API was in control of the Taharan Project and that Hoskins worked together with the company on the project. Moreover, the Court also found that Hoskins was shown to have completed tasks at the request of the American company. However, there was no evidence that there was an understanding between Hoskins and the company in order to assume that the company would be in control of his actions during the development of the project.
For this reason, in the absence of the element “understanding ” to characterize Hoskins as an agent, the Court granted the request for acquittal for the allegations regarding the FCPA violations, but maintained the conviction concerning the money laundering charges. The Court found that federal prosecutors were able to demonstrate, beyond reasonable doubt, that Hoskins was aware that bank accounts located in the United States have been used for bank transfers to Sharafi, a consultant accused of paying Indonesian authorities to maintain the contract. The Court also considered that there was sufficient evidence that the transfer carried out constituted a continuing transaction, in order to establish a direct relationship between the American bank account and the payment made to the consultant. It is worth clarifying that the definition of money laundering in the US has different elements of the equivalent crime in Brazilian law.