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Government insists 'honest mistakes' don't warrant tossing FCPA convictions

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  • suesarkis@aol.com
    Government insists honest mistakes don t warrant tossing FCPA convictions Amanda Bronstad The National Law Journal U.S. District Judge Howard Matz Federal
    Message 1 of 1 , Sep 8, 2011
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      Government insists 'honest mistakes' don't warrant tossing FCPA convictions
      Amanda Bronstad
      The National Law Journal

      U.S. District Judge Howard Matz

      Federal prosecutors acknowledged that they made some "honest mistakes" in
      a high-profile Foreign Corrupt Practices Act case, but disputed in a brief
      filed on Sept. 5 that those oversights rose to the level of misconduct.

      The government's filing addressed concerns voiced by U.S. District Judge
      Howard Matz in Los Angeles that the government's "astonishing" and
      "troublesome" mishandling of the case might warrant dismissing the indictment
      against two former executives of Lindsey Manufacturing Co. who were convicted on
      FCPA charges.

      Defense lawyers moved to dismiss the charges based on prosecutorial
      misconduct one day before a May 10 jury verdict went against their clients.
      During a June 27 hearing, Matz ordered both sides to submit supplemental briefs
      discussing whether the indictment should be dismissed. The judge acted
      after Assistant U.S. Attorney Douglas Miller acknowledged that his team had
      failed to produce all the grand jury testimony of an FBI special agent who
      investigated the case.

      In their brief, prosecutors wrote that the mishandling of FBI Special
      Agent Susan Guernsey's testimony was "regrettable" and possibly "negligent,"
      but was an accidental mistake that didn't justify throwing out the verdict.
      Rather, "the defendants strain to find misconduct where there is none, and
      they try to transform honest, non-prejudicial mistakes into something they
      are not," they wrote.

      The prosecutors argued that the alleged misconduct did not harm the
      ability of the accused to present a defense.

      The verdict was one of the few that the government has won under the FCPA,
      which prohibits individuals and businesses from bribing foreign officials
      to secure work.

      Lindsey Manufacturing and two executives, Chief Executive Officer Keith
      Lindsey and Chief Financial Officer Steve Lee, were convicted of paying
      bribes, including a $300,000 red Ferrari, to two officials of a state-owned
      electric utility in Mexico. The jury found each man guilty of five FCPA counts
      and one count of conspiracy to violate the FCPA. They each face 30 years in

      During the recent hearing, Jan Handzlik, a solo practioner in Los Angeles
      who represents Lindsey Manufacturing and Keith Lindsey, said he was
      preparing to argue his dismissal motion when he discovered that some of Guernsey's
      testimony was missing from the transcript provided by the government.

      Prosecutors have maintained that they had not planned to produce
      Guernsey's testimony because they had no intention of calling her as a witness.
      After being asked, however, the government produced 166 pages but inadvertently
      failed to identify 19 additional pages until after the trial, according to
      the brief.

      Prosecutors quoted Miller's statements to Matz during the hearing, when he
      acknowledged for the first time that a portion of Guernsey's grand jury
      testimony had not been turned over to the defense because it had
      inadvertently been filed with records from another case. The slip was not, however,
      "flagrant misconduct or intentional behavior by the government," Miller is
      quoted as saying. "It was an oversight and one that should not have been made
      given the history of this case. I regret more so than in my career that
      this took place, but that I'm dealing with."

      Matz described the government's handling of the case as "extraordinarily
      sloppy" with a "bad odor at times," citing the search of two buildings
      without warrants and the government's unauthorized acquisition of e-mails of a
      defendant who was in jail. On March 29, Matz suppressed statements that
      Lindsey made during an FBI raid of his office because he hadn't been warned of
      his Miranda rights.

      Defense attorneys have raised several more instances of potential
      prosecutorial misconduct. But prosecutors, in their brief, denied that they "played
      games" with the witness list, provided false statements in the drafting of
      a search warrant affidavit or belatedly turned over discovery material.
      They also defended their decision to call as a summary witness an FBI special
      agent who had not participated in the investigation.

      "The defendants cite no case, and the government is aware of none, that
      says a federal agent must have been involved in the investigation in order to
      testify at trial," the prosecution team wrote.

      A hearing on the prosecutorial misconduct issue is scheduled for Nov. 17.

      [Non-text portions of this message have been removed]
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