Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

Earlier this month, as reported in the Wall Street Journal's MarketWatch, a Federal jury in the U.S. District Court for the Central District of California acquitted Howard H. Berger, a business consultant, on four criminal tax charges. The charges stemmed from Mr. Berger's alleged filing of 2006 personal and partnership tax returns allegedly claiming a false charitable donation of $1 million.

The defense at trial presented compelling evidence that Mr. Berger never personally reviewed or authorized his 2006 return. The compelling evidence was that, four days before the return was due in October of 2007, Mr. Berger's ex-wife kidnapped their 4 year-old son from his preschool and fled with the child to her native country of South Africa. Furthermore, this was not the first time the former Mrs. Berger had abducted the child--she had refused to return to the U.S. after taking the child to visit her family in 2005. It took Mr. Berger 8 months working with the U.S. State Department to obtain a court order for the return of his son. The defense furthermore undermined the testimony of IRS agents regarding alleged false statements by Mr. Berger regarding his access to the charity's bank accounts or statements.

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As reported by Reuters, last week, the U.S. District Court for the District of Columbia declared a mistrial in the trial of four arms salesmen for alleged bribes under the Foreign Corrupt Practices Act (FCPA). The defendants,  Andrew Bigelow, Pankesh Patel, Lee Tolleson and John Wier, were accused of attempting to bribe two individuals who were posing as representatives of the defense ministry of the African nation of Gabon in order to win a $15 million deal to provide guns, body armor and other equipment. The defendants were alleged to have told the informants that they would add a 20 percent commission to any prices quoted as bribes. The mistrial was declared following a six week trial in which the jury failed to reach a unanimous verdict after six different votes.

The sting operation, which involved a staggering 250 FBI agents, resulted in 22 individuals being charged, including a former U.S. Secret Service agent and an executive for U.S. firearm manufacturer Smith & Wesson Holding Co. Department of Justice officials have informed the media that the Department intends to retry the case. Three of the 22 individuals charged as a result of the sting have pled guilty. Trials have been scheduled for the remaining defendants.

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The Federal government has massively ramped up enforcement against domestic and foreign corporations for violation of the Foreign Corrupt Practices Act (FCPA), essentially an anti-bribery or kickback statute applicable to overseas transactions. The latest target to fall to FCPA allegations, according to an SEC press release, is German automotive giant Daimler AG. The Securities and Exchange Commission had alleged that Daimler allegedly paid bribes to foreign government officials to secure business in Eastern Europe, Africa and Asia. Last Thursday, the SEC announced that Daimler had entered into a settlement agreement with the SEC in which Daimler agreed to pay $91.4 million in disgorgement. Daimler also agreed to pay $93.6 million in fines to settle alleged criminal charges which were announced by the Department of Justice last week.

The SEC complaint, filed on March 22, charges that Daimler allegedly paid $56 million in improper payments, involving more than 200 transactions in 22 countries, over a period of 10 years. The government contends that Daimler allegedly earned $1.9 billion in revenue and at least $90 million in illegal profits as a result of the payments. Included in the government's allegations are allegations that Daimler paid kickbacks to Iraqi officials in relation to sales of vehicles and spare parts to Iraq under the United Nations Oil for Food Program. The complaint also alleges that Daimler kept ledger accounts of credit balances for the benefit of foreign government officials.

Daimler allegedly made bribes or kickbacks through several methods. Amounts of alleged discounts or rebates on sales contracts were allegedly kicked back to foreign officials. Daimler also alleged used false sales intermediaries, corrupt business partners and cash desks to funnel bribes to officials. The government alleges that Daimler's management sanctioned the practices.

Daimler has issued a press release relating to the settlement. The company notes that it cooperated with SEC and DOJ during their investigations, entering into a consent agreement with the SEC and a deferred prosecution agreement with DOJ. The release also notes that Daimler North East Asia Ltd., also entered into a deferred prosecution agreement with DOJ and Mercedes-Benz Russia SAO and Daimler Export und Trade Finance GmbH pled guilty to charges of violations of the FCPA in the U.S. District Court for the District of Columbia.

Daimler also states that it has taken steps to ensure that its future conduct will comply with all applicable laws and Daimler's "Integrity Code." Daimler states that under its deferred prosecution agreements, it must maintain a comprehensive compliance program and not commit any further violations of the FCPA for two years. If Daimler successfully complies with these terms, the charges against the corporation and its subsidiaries will be dismissed.

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