Georgia Resident and DOD Employee Charged with Bribery

As reported by Reuters, Desi Deandre Wade, of Climax, Georgia, was a chief of fire and emergency services for U.S. Department of Defense, based in Kabul, Afghanistan. Wade has been charged with allegedly accepting a $95,000 bribe from a contractor in exchange for providing the contractor with quotes from competing bidders.

Wade was arrested last week in Atlanta while attending a Fire Rescue International Conference.

Alabama Legislators and Casino Employees to Be Re-Tried


The U.S. District Court for the Southern District of Alabama has postponed the retrial of eight defendants on corruption charges relating to the gambling industry and various State legislators and employees, originally scheduled to commence on October 3, until January 9, 2012, according to The charges stemmed from an FBI investigation into alleged bribery of legislators relating to an upcoming vote on a gambling bill. Two of the defendants, Alabama State Senator Quinton Ross and VictoryLand casino lobbyist Bob Geddie, were acquitted on August 11, following a nine week trial and an additional week of jury deliberations. The jury deadlocked as to the other defendants. None of the defendants were convicted.

The Court stated that ti would rule on whether to retry the defendants together or in separate trials. The defense has opposed severance, citing that the defendants were all tried jointly and claiming that the government is attempting to change the rules midway through the game.

The defense raised concerns regarding the rescheduled date, suggesting that it might conflict with the college football National Championship game in New Orleans. 

Harris County, Texas, Commissioner Faces Second Trial on Bribery and Other Charges Following Mistrial

Jerry Eversole, a Harris County (Houston), Texas, Commissioner, was charged in the U.S. District Court for the Southern District of Texas with conspiracy, accepting bribes and filing false income tax returns in 2003 and 2004. Eversole was alleged to have accepted $100,000 in gifts from a developer, Michael Surface, in exchange for being awarded County contracts.

Eversole was tried on the charges back in March. The defense put up no evidence of its own at trial. Nevertheless, the jury, during deliberations, raised questions about Eversole's friendship with Surface and the line between friendship and criminal conspiracy. On March 30, 2011, the Court declared a mistrial after jurors deadlocked on the charges. Eversole has spent $1.1 million on his defense. His second trial is scheduled to commence on October 24. He has just $51,000 remaining in legal defense funds.

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Mistrial in First Trial Following Massive Foreign Corrupt Practices Bribery Sting

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.

Image source: normandy12341

Supreme Court Declines to Hear Conrad Black's Appeal of His Two Remaining Convictions

The U.S. Supreme Court yesterday denied the petition for certiorari by former international media mogul, Canadian citizen and British Lord, Conrad Moffat Black, as reported in the Washington Post.

Mr. Black was the CEO of Hollinger International, Inc., which owned newspapers worldwide. He was indicted (in an indictment made available by FindLaw which may be viewed here) with other officers and employees of Hollinger in the Northern District of Illinois in November of 2005 on 11 counts, in an original indictment which charged mail fraud conspiracy, wire fraud conspiracy and substantive counts of mail and wire fraud. The counts all referenced the "honest services" fraud statute, 18 United States Code section 1346. Testifying to the vigorousness of his defense, on July of 2007, a jury acquitted Mr. Black on 9 counts but convicted him on three others.

Mr. Black then challenged his convictions on appeal. In June of last year, the Supreme Court handed down its three "honest services" decisions, Skilling v. U.S., Black v. U.S., and Weyrauch v. U.S. In Skilling, the main decision involving former Enron President Jeffrey Skilling, the Court rejected the old "intangible right" to an employee's honest services theory and held that, in order to avoid being unconstitutionally vague, section 1346 applies to bribery or kickback schemes, and not to mere self-dealing by an employee. In Mr. Black's case, the Court unanimously held that the jury had not been properly instructed on honest services fraud at trial, and vacated his convictions and remanded. Then in October of last year, the Seventh Circuit Court of Appeals, in an opinion authored by distinguished Judge Richard Posner, struck two of the three remaining counts against Mr. Black, leaving him convicted on a single fraud count and a count for obstruction of justice. Mr. Black again appealed these two remaining convictions to the Seventh Circuit, which upheld them last December, and then to the Supreme Court, which has now declined to review them. Mr. Black is scheduled to be resentenced on June 24.

Source: McLean'

Prominent Cuban-American Acquitted of Healthcare Fraud in the 1990s, Indicted a Second Time for Submitting False Claims to Medicare

Ernesto Angel Montaner, aged 70, a member of a prominent Miami Cuban family, is facing healthcare fraud charges for the second time, according to the South Florida Sun Sentinel. Montaner was the sole defendant acquitted in a vast healthcare fraud prosecution in the 1990s for an alleged $15 million in false claims to Medicare. 

The government alleges that, from 2006 to 2008, Montaner submitted approximately $6.2 million in false claims to Medicare at rehabilitation clinics which he operated, including Infinity Therapy and Miami Dade Medical Group. Montaner and others are alleged to have bribed or paid kickbacks to assisted-living facilities, home health care agencies, patient recruiters and patients in exchange for referrals. Many of the patients referred to Montaner did not require physical therapy/occupational therapy services.

Montaner fled to Costa Rica in early 2009 after government agents raided his offices, where he lived on a farm worth $1 million. However, the government successfully extradited Montaner back to the U.S. in February. The current set of charges against Montaner arose out a sting operation by the FBI using a registered nurse and convicted felon posing as a patient recruiter, as well as a physician convicted of Medicare fraud and other ex-felons and recruits posing as patients with ailments. Montaner allegedly paid the informants cash to refer Medicare patients to him. The informants also signed off on claims for 17 rehabilitation sessions which were never given.

The government has also charged Montaner's business partner and his son, Ernesto Montaner Jr., 45, who entered a guilty plea to manipulating Medicare billing codes to maximize patient visits, was sentenced to four years in prison and is cooperating with authorities. Montaner's partner, Jose A. Varona, 39, a patient recruiter, has been sentenced to three years imprisonment and has also given information to the FBI.

New York Senator May Be Retried in Wake of Supreme Court's "Honest Services" Fraud Decision

New York Senator Joseph L. Bruno was indicted in January of 2009 on eight counts of fraud. A jury in the U.S. District Court for the Northern District of New York acquitted Bruno, who is now 81 years old and the former Republican Majority Leader of the New York State Senate, on five of the remaining charges and deadlocked on the sixth in December of 2009. The charges were based on allegations that Bruno allegedly took approximately $3 million in kickbacks from businesses seeking to do business in New York, as well as labor unions. In particular, Bruno s alleged to have accepted $280,000 in "consulting fees" from companies associated with Loudonville, New York, businessman Jared Abbruzzese. Bruno was sentenced to two years' imprisonment last May, but has remained free pending his appeal in the U.S. Court of Appeals for the Second Circuit.

Now the U.S. Attorney's Office has filed a brief with the Court of Appeals requesting that the dismiss the charges against Bruno and remand his case for a new trial, as reported in the Saratogan. The prosecution argued that Bruno's convictions under 18 United States Code Section 346--the honest services fraud statute--cannot stand following the U.S. Supreme Court's decision in U.S. v. Skilling, the case against former Enron executive Jeffrey Skilling, as the Blog has noted here. However, it maintains that it can obtain another indictment of Bruno under the statute, as amended by Skilling. The government contends that it will be able to prove a quid pro quo if Bruno is ordered retried. Bruno and his counsel have filed a brief with the Court of Appeals arguing that any retrial of Bruno would violate double jeopardy.

Roswell Man and Military Contracting Firm Indicted in Rhode Island for Fraud Against Navy

 The Washington Examiner reports that Anjan Dutta-Gupta of Roswell, Georgia, and Ralph M. Mariano of Arlington, Virginia, have been charged in the U.S. District Court for the District of Rhode Island on bribery and kickback charges. Mariano was a senior engineer at the Washington Navy Yard. Gupta was the founder of Advanced Solutions for Tomorrow (AST), a Georgia technology company. The charges assert that Mariano and Gupta allegedly engaged in a scheme to defraud the U.S. Navy dating back to 1998 and resulting in approximately $10 million in losses in inflated costs to the Navy. During this time, AST gained 10 contracts with the Navy totalling $120 million. Gupta and AST allegedly paid kickbacks to Mariano, who allegedly distributed the gains to his father, brother, girlfriend and associates. Prosecutors claim to have recorded conversations in which Mariano describes the alleged scheme.

Gupta also allegedly contributed to U.S. Democratic Senator Jack Reed, a member of the Senate Appropriations Committee. Senator Reed allegedly helped earmark military funding for ASFT. Senator Reed has pledged to donate the contributions from Gupta to charity.

FBI Investigating "Pay for Play Plan" Allegations Surrounding Auburn Quarterback Cam Newton and Father

It is college football season, and appropriately the most notable news in an otherwise slow Federal criminal news day appears to be that the Federal Bureau of Investigation has interviewed John Bond, a former quarterback for the Mississippi State Bulldogs, regarding Auburn quarterback Cam Newton, according to the Atlanta Journal and Constitution.

Bond told Mississippi State officials in January that a former teammate had asked him for $180,000 in order to secure Newton's commitment to the Bulldogs. The teammate was subsequently revealed to be Kenny Rogers, another former player for the Bulldogs and owner of a company called Elite Football Preparation, which holds camps in Alabama, Chicago and Mississippi, and matches football prospects with colleges. Rogers, in turn, has publicly stated that he met with Newton's father, Cecil Newton, as well as assistant coaches for MSU, on November 27, 2009, in Starkville, Mississippi, and that Newton demanded between $100,000 and $180,000 in order to ensure that his son signed with the Bulldogs.

Newton originally signed a letter of intent with the University of Florida, where he spent the 2007-2008 season as a back-up quarterback to Heisman Trophy winner Tim Tebow. He subsequently transferred to Blinn College in Texas, where he led the Blinn Buccaneers to the NJCAA National Championship before signing with Auburn. According to ESPN, Cecil Newton told Rogers at the meeting that his son's transfer to Auburn was not going to be "free." Rogers was referred to Mississippi State booster and former Bulldogs offensive lineman Bill Bell. Bell confirmed to ESPN that Rogers did contact him to ask for money in exchange for Newton signing with Mississippi State. Rogers has stated that he doesn't know if Cam Newton knew about his father's demand for money. However, ESPN reported that recruiting sources for Mississippi State had disclosed that they had had telephone conversations with Cam Newton, as well as his father, that Newton's college choice would be based on a pay-for-play plan.

The allegations are further not limited to Newton's dealings with Mississippi State. One recruiter has reported that Cam Newton telephoned him after committing to Auburn and informed him that he had chosen Auburn over Mississippi State because "the money was too much."

Mississippi State compliance officials reported the allegations to Southeastern Conference compliance officials in January. The NCAA and the FBI are both conducting investigations into these allegations. The news has cast a shadow over Auburn's so-far undefeated season, and Newton himself, the current leading contender for the Heisman Trophy. Newton's reputation was already previously marred by charges of burglary, larceny and obstruction relating to an alleged stolen laptop while he was at the University of Florida.

The Federal investigation could result in criminal proceedings for conspiracy, fraud, bribery and other offenses. In a case which college football fans will have some familiarity with, U.S. v. Young, NO. 03-20400 BV, (W.D.Tenn. 2004), Tennessee businessman and University of Alabama booster Logan Young was indicted for structuring, in violation of 31 U.S.C. § 5324; Travel Act violations under 18 U.S.C. § 1952; and conspiracy, in violation of 18 U.S.C. § 371, for paying $150,000 to Lynn Lang, coach of Trezvant High School in Memphis, to ensure that high school defensive player Albert Means signed a letter of intent with Alabama. Young, Lang and Trezvant Assistant Coach Milton Kirk were subsequently convicted. Alabama was placed on probation for five years by the NCAA as a result of the conduct, and given a two year bowl ban. The University of Kentucky was given a one year bowl ban for a $6,000 payment by a booster to Lang in order to have Means visit the school. Similar misconduct was alleged against the University of Georgia, the University of Arkansas and the University of Memphis, however those schools were not sanctioned. An old Sports Illustrated article has more on the Means scandal.

Alabama Contractor Roger Taylor Acquitted of Conspiracy, Bribery and Obstruction Charges Following Federal Trial; Avoyelles Parish Sheriff Bill Belt and Family Acquitted

On Tuesday, a jury in the U.S. District Court for the Northern District of Alabama in Tuscaloosa found construction contractor Roger Taylor not guilty on one count of conspiracy, five counts of bribery and two counts of obstructing justice, according to Tuscaloosa News. Mr. Taylor was one of numerous individuals investigated in relation to Alabama's Community College System. Mr. Taylor, co-owner of Hall-Taylor Construction, and was alleged to have bribed former two-year college Chancellor Roy Johnson by paying for more than $92,000 in construction costs and appliances at Johnson’s home in Opelika, Alabama, in exchange for awards of construction management work within the system. The government alleged that Mr. Taylor  was awarded $4 million in no-bid state contracts from 2002 to 2006 in exchange for the alleged bribes.

Mr. Taylor's trial began on October 25. He  was originally charged with 17 counts, but the majority of these were dropped after a successful appeal by a co-defendant. At trial, however, the prosecution failed to present any testimony showing that Johnson alleged directed or threatened college presidents to hire Hall Taylor on contracts for a massive makeover of the college system. On the contrary, witnesses testified that another construction management firm received a fair share of the contracts. The witnesses at the trial also praised Hall-Taylor's work. Mr. Taylor's counsel made the trial into a referendum on Johnson's credibility. Johnson pled guilty to 14 charges of conspiracy, bribery, witness tampering and money laundering in January of 2008. He is scheduled to be sentenced on November 18.

17 individuals, including former state legislators, college presidents and the system chancellor, have either pled guilty or been found guilty by a jury as a result of the investigation. A spokesperson for the U.S. Attorney’s Office for the Northern District of Alabama issued a statement that the prosecution believed it had presented sufficient evidence to find Mr. Taylor guilty of the bribery and obstruction charges, but that it respected the jury's verdict. The government has a companion civil forfeiture case against Hall-Taylor's assets. Mr. Taylor's counsel stated that the prosecution intimidated and threatened witnesses at the grand jury investigating Johnson, and have indicated that Mr. Taylor may seek recourse for the prosecution's actions.

In other positive Federal criminal news, Bill Belt, the former Sheriff of  Avoyelles Parish, Louisiana, his wife, Tracy Belt, and his sister, Julie Bernard, were found not guilty of conspiracy, mail fraud and obstruction of justice last week by a jury in the U.S. District Court for the Western District of Louisiana after a trial which also began on October 25, according to

In 1988, Sheriff Belt allegedly contracted with Michael and Rae Johnson to install pay  telephones  for prisoners in Avoyelles Parish in a venture called Cajun Callers. Under the agreement, Cajun Callers would pay a monthly commission to the Sheriff's Office. The Johnsons made large amounts of money  from the venture, which they failed to pay taxes on. Johnson subsequently became a Louisiana  State Judge, but  was removed from the bench due to ethical violations relating to Cajun Callers. The government alleged that Sheriff Belt was paid kickbacks.

In 1990, Sheriff Belt's future wife began keeping the books for two companies She owned: Southern Louisiana Communications, which operated public pay phones; and Central Louisiana Communications, which operated phones in Louisiana parish jails.

Rae Johnson testified at trial that Tracy Belt would allegedly take money collected from the pay phones and deposit it and then write three checks in identical amounts--one of which was to her husband's tax account from which taxes were never paid. Johnson stated that she would allegedly cash one of the other checks and deliver the money to Mrs. Belt. Sheriff Belt's counsel undermined Johnson's account of the triple-check scheme on cross-examination, however. Counsel argued in closing that Johnson was a liar who escaped prosecution herself by making up stories about the Belts. The government also presented the testimony of a convicted male pedophile who installed the Cajun Callers phones in the jails, and another convicted felon who served time for crimes including insurance fraud.

Federal Prosecutors Observe "No Touch" Ruling on Possible Retrial of San Diego Councilman for Alleged Honest Services Fraud; Former Alaska Chief of Staff to Have Honest Services Conviction Dismissed

Last week was a good one for public officials charged with Federal crimes. First, the U.S. Attorney's Office for the Southern District of California announced that it would not seek a second trial of former San Diego Councilman Michael Zucchet on alleged honest services fraud charges pursuant to 18 U.S.C. 1346, relating to political contributions from the owner of a strip club, as reported by the Los Angeles Times. Mr. Zucchet was indicted with two other City Council members and an aide in 2003. The government alleged that the Council members had a meeting with a lobbyist for the strip club owner for the alleged purpose of changing the City's "no touch" ordinances relating to strip clubs. The Council members, however, argued that they reported the contributions on their financial disclosure forms. The government's decision was prompted by the U.S. Supreme Court's recent decision in U.S. v. Skilling, No. 08-2349, in which, as we have noted,  the Court held that the "honest services" mail fraud statute, 18 U.S.C. §1346, applies to bribery and kickback schemes, and not to mere "undisclosed self-dealing by a public official or private employee," alone.

Councilman Charles Lewis died before trial. Mr. Zucchet and Councilman Ralph Inzunza were convicted by a jury following trial in July of 2005. However, U.S. District Judge Jeffrey Miller dismissed the jury's guilty verdict on seven counts against Mr. Zucchet. The Judge permitted the government to retry Mr. Zucchet on the two remaining counts. The Ninth Circuit Court of Appeals upheld the district court's ruling on appeal. Mr. Inzunza has also appealed his convictions. Mr. Zucchet resigned from the Council soon after his conviction, and is currently General Manager of the San Diego Municipal Employees Association.

Then, according to the Achorage Daily News, the U.S. Attorney's Office for the District of Alaska announced that it would agree to the dismissal of the honest services fraud conviction of Jim Clark. Mr. Clark was the former Chief of Staff to Alaska Governor Frank Murkowski, a lobbyist and attorney, and was once viewed as the most powerful unelected official in Alaska. The U.S. Attorney's Office announced that Mr. Clark's 2008 guilty plea was to a felony that no longer exists, pursuant to the Supreme Court's Skilling decision. Mr. Clark pled guilty to alleged conspiring with former officials of the defunct oil-field services company Veco Corp. to channel $68,550 in illegal contributions to Governor Murkowski's political campaign -- without the Governor's knowledge. He is expected to be a witness for the government in a possible upcoming trial of State Representative Bruce Weyhrauch on bribery, extortion and conspiracy charges. Mr. Clark's law license, which was suspended following his guilty plea, is expected to be reinstated by the Alaska Supreme Court.

Supreme Court's Skilling Decision Affects Retrial of Abramoff Associate; Georgia Attorney Gets 5 Years for $4.3 Million Fraud Against Clients; Dutch Company Enters $240 Million Settlement of Foreign Bribery Allegations in Texas

On June 24, the United States Supreme Court rendered its decision in the case of former Enron executive Jeffrey Skilling. The majority in U.S. v. Skilling, No. 08-2349, in an opinion authored by Justice Ruth Bader Ginsberg (which may be read in its 114 page entirety here), held that the "honest services" mail fraud statute, 18 U.S.C. §1346, applies to bribery and kickback schemes, and not to mere "undisclosed self-dealing by a public official or private employee," alone. The majority held that Skilling did not violate §1346 since, although the Government charged Skilling with conspiring to de-fraud Enron’s shareholders by misrepresenting the company’s financial health and therefore profiting, the government never alleged that Skilling solicited or accepted any payments from third parties in exchange for making the misrepresentations.

The recent Skilling decision is already having an impact on federal prosecutions. As reported by, this week, Judge Ellen Segal Huvelle of the U.S. District Court for the District of Columbia told the parties in the prosecution of Kevin Ring, a former associate of convicted lobbyist Jack Abramoff, that the Court would grant Ring more time to file a motion for judgment of acquittal in light of Skilling. Ring was charged with bribery and tried last year, however the trial ended in a hung jury. The Court intentionally delayed Ring's retrial to await the Supreme Court's decision in Skilling and the cases of Black v. U.S. and Weyhrauch v. U.S. The prosecution has announced its intent to push forward with a second trial of Ring.

In Georgia news, attorney M. Dewey Bain, of Sugar Hill, Georgia, was sentenced to 5 years and 3 months imprisonment today in the U.S. District Court for the Northern District of Georgia for defrauding clients--including a 97 year-old woman--out of $4.3 million, as reported by the Atlanta Journal-Constitution. Bain entered into trust agreements with clients in which Bain falsely promised he would invest their monies in safe accounts, but instead fraudulently diverted the monies to his own personal use.

In Southeastern news, Snamprogetti Netherlands B.V.--yes, that Snamprogetti Netherlands B.V.--has agreed to pay $240 million in penalties to the government for alleged violations of the Foreign Corrupt Practices Act (FCPA) for allegedly bribing officials in Nigeria to obtain engineering, procurement and construction (EPC) contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, according to an FBI press release. Snamprogetti is a Dutch corporation and a wholly owned subsidiary of Snamprogetti S.p.A., an Italian corporation. Snamprogetti was alleged, along with Kellogg Brown & Root Inc. (KBR), Technip S.A. (Technip), and a Japanese engineering and construction company to have engaged in a joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG), between 1995 and 2004 to build LNG facilities on Bonny Island. Snamprogetti allegedly caused the venture to hire two agents, Jeffrey Tesler and a Japanese trading company, to pay approximately $172 million in bribes to Nigerian officials. The deferred prosecution agreement was filed today in the U.S. District Court for the Southern District of Texas. Snamprogetti also reached a settlement of a related civil action by the SEC.

Developer, Bank Executives Indicted Over $80 Million in Loans/Failure of Integrity Bank

Last week, an indictment was unsealed in the U.S. District Court for the Northern District of Georgia, charging Guy Mitchell of Coral Gables, Florida, and Douglas Ballard and Joseph Todd Foster, of Atlanta, with bribery, insider trading and securities fraud, as reported in the Atlanta Journal Constitution.

Mitchell was a hotel developer and Ballard was a vice president with Integrity Bank in Alpharetta, Georgia. Beginning in 2004, Mitchell allegedly took out tens of millions in loans from Integrity for alleged real estate ventures, including $29 million to purchase Casa Madrona, a 63 room resort hotel overlooking San Francisco Bay, and for the purchase of an island in the Bahamas. Ballard allegedly authorized the loans and draw downs, in exchange for accepting more than $230,000 in kickbacks from Mitchell.

The indictment alleges that Mitchell misled Integrity's Board of Directors regarding the amount of work which had been done on the hotel. Integrity's Board claims that it never approved many of the loans.

Foster, vice president of risk management for Integrity, allegedly sold 30,000 shares for $350,000 after discovering that Integrity did not have enough liquid security to cover a $20 million loan to Mitchell.

Integrity, a faith-based bank, sustained an alleged $80 million in losses and constitutes the fourth largest of Georgia's many bank failures. The bank was shut down by the Federal Deposit Insurance Corporation in August of 2008.

The defendants have pled not guilty. Mitchell was released on a $2.5 million bond and Ballard was released on a $200,000 bond.

Foreign Corrupt Practices Act Investigation of Aluminum Giant Alcoa for Alleged Bribery, Per WSJ Law Blog

Ashby Jones at the Wall Street Journal Law Blog also notes the rise in Foreign Corrupt Practices Act enforcement actions by the government. In the latest instance, Jones cites U.S. and British authorities' investigation of Alcoa, the third largest producer of aluminum in the world, based in Pittsburgh, for alleged bribery in negotiating contracts in the Middle East and elsewhere. The authorities are also investigating Victor Dahdaleh, a Canadian citizen and businessman who resides in London, for alleged bribery and money laundering. The allegations center on possible bribes to officials in Bahrain. Specifically, between 2001 and 2005, a company controlled by Dahdaleh allegedly made several million dollars in payments to the bank account of an executive for Alba, a Bahrain government-owned manufacturing company.

The investigation of Alcoa and Dahdaleh began in 2008 after Alba filed suit against Alcoa and Dahdaleh in the U.S. for allegedly conspiring to overcharge Alba for the purchase of thousands of tons of alumina, which is used to make aluminum. Representatives of Alcoa and Alba have issued statements stating that they are cooperating with authorities. Alcoa and a spokesperson for Dahdaleh have also stated that they will "vigorously" defend themselves.

Daimler AG Agrees to Pay $184 Million to Settle SEC and DOJ Allegations; Alleged Conduct Includes Sales of Vehicles and Parts to Iraq Under U.N. Oil for Food Program

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.

British Multinational Defense Contractor BAE Systems Pleads Guilty to Foreign Corrupt Practices Violations and Other Offenses; Ordered to Pay $400 Million Fine

On Monday, BAE Systems PLC, a United Kingdom-based, multinational defense contractor, pled guilty in the U.S. District Court in the District of Columbia to charges of allegedly conspiring to defraud the United States by impairing and impeding its lawful functions, allegedly making false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and allegedly violating the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR), according to PR Newswire. U.S. District Judge John D. Bates ordered BAE Systems to pay a $400 million criminal fine. The fine is one of the largest ever imposed in a foreign corrupt practices/export control case. BAE Systems also agreed to retain an independent compliance monitor.

BAE Systems, the prime military contractor in the UK, was alleged to have represented to various U.S. government agencies from 2000 to 2002 that it would would create and implement policies and procedures to ensure its compliance with anti-bribery provisions of the FCPA and the Organization for Economic Cooperation and Development (OECD), but failed to implement the policies and procedures. BAE Systems was alleged to have saved approximately $200 million in failing to implement the policies and procedures.

The government also alleged that BAE Systems made payments to shell corporations and third party intermediaries which were not subject to the scrutiny required by the U.S. government. BAE Systems is alleged to have retained "marketing advisors" to secure defense contracts and to have allegedly concealed its relationship with these advisors from the U.S. government and made undisclosed payments to them, encouraging them to set up offshore shell corporations to receive payments. The company is alleged to have created one company in the British Virgin Islands in order to allegedly conceal its marketing advisor relationships, the identities of the advisors and how much they were paid; to help the advisors avoid tax liability, and  to obstruct investigating authorities and circumvent laws of countries which prohibit such relationships. BAE Systems is alleged to have made more than £135 million in payments through the shell entity.

BAE Systems was also alleged to have given benefits to an official of the Kingdom of Saudi Arabia in order to influence sales of fighter jets and other armaments to the country without properly reviewing or verifying the benefits pursuant to U.S. law. BAE Systems is alleged to have transferred millions through a bank account in Switzerland controlled by an intermediary in relation to the deal.

Former Willbros Executives Sentenced for $6 Million Bribe to Nigerian Officials in Violation of the Foreign Corrupt Practices Act

The culture of corruption of some foreign nations may heavily influence to U.S. companies doing business abroad to play along in order to be competitive. Regardless of the competitive disadvantages, the Foreign Corrupt Practices Act (FCPA) stands as a serious deterrent to engaging in bribery or kickbacks in business transactions abroad. The force of the FCPA was demonstrated once again on Thursday, when two former executives of Willbros International, a subsidiary of Willbros Group, an engineering-construction firm headquartered in Houston, were sentenced in the U.S. District Court for the Southern District of Texas for participating in a $6 million bribe of Nigerian officials to secure a contract for a major natural gas pipeline. As reported by the Houston Chronicle, Jason Edward Steph and Jim Bob Brown had pled guilty to violating the FCPA. U.S. District Judge Sim Lake sentenced Steph to 15 months imprisonment and Brown to a year and a day. Willbros Group has also agreed to pay $32.3 million under a deferred adjudication settlement.

The bribe was made in relation to a $387 million natural gas pipeline project in the Niger Delta known as the Eastern Gas Gathering System. Steph and Brown gave bribes to Nigerian officials to ensure that Willbros was awarded the contract, at one point keeping $1 million in a suitcase.

The prosecution requested consideration for Steph and Brown based on their cooperation with and assistance to the government. Steph told the court that he was doing what his superiors had told him to do.

Brown's attorney pointed out at the sentencing hearing that Brown had been threatened, kidnapped, beaten and shot at while in Nigeria. The court noted the corrupt conditions in Nigeria, observing that one of the Nigerian officials bribed is currently running for office. However, the court stated that it wanted to send a message to the business community in sentencing Steph and Brown.

Another former executive, Kenneth Tillery, remains a fugitive in the case.


Telecommunications Company UTStarcom Enters into $3 Million Settlements with DOJ and SEC for Alleged Foreign Corrupt Practices Act Violations

As reported by the Wall Street Journal and DOJ, UTStarcom Inc., a California-based global communications corporation which designs, manufactures and sells network equipment and handsets has agreed to pay $1.5 million in penalties to the government for alleged acts of bribery in the People’s Republic of China in violation of the Foreign Corrupt Practices Act (FCPA). The company simultaneously reached a settlement with the Securities and Exchange Commission over the same conduct in which it agreed to pay an additional $1.5 million.

UTStarcom entered an agreement with the government--in which UTStarcom neither admitted nor denied the allegations--which states that, between 2002 and 2007, the company's employees and agents allegedly arranged and paid for employees of Chinese state-owned telecommunications companies and UTStarcom customers to travel to popular tourist destinations in the U.S., including New York City, Las Vegas and Hawaii, purportedly to participate in training at UTStarcom facilities. However, UTStarcom purportedly had no facilities in the locations and conducted no training. UTStarcom recorded the trips as alleged "training" expenses. The government charged that the trips were for the alleged purpose of securing telecommunications contracts in China. The value of the trips and other gifts to foreign employees was alleged to be approximately $7 million.

The SEC has also alleged that UTStarcom obtained work visas for employees of its foreign customers to work in the U.S. and paid the individuals salaries and benefits although the individuals allegedly did no work. It claims that UTStarcom allegedly falsely accounted for payments to the individuals as employee compensation and created false annual performance reviews for personnel files of the individuals.

In addition to paying penalties, the agreement requires UTStarcom to implement various internal controls and to cooperate fully with the Department of Justice. The agreement also recognizes UTStarcom's voluntary disclosures to, and cooperation with, the government, and the company's efforts to correct the conduct. DOJ has agreed not to prosecute UTStarcom or its subsidiaries in exchange for its cooperation and its compliance with the agreement.

UTStarcom's focus has been Asian markets, in particular China. The company does business in China through UTStarcom China Co. Ltd., a wholly-owned subsidiary.

Hollywood Film Producer Couple Convicted for Bribing Thai Official

According to, a jury in the U.S. District Court for the Central District of California found Gerald and Patricia Green guilty of conspiracy, money laundering and violation of the Foreign Corrupt Practices Act (FCPA).

The Greens were film producers based in Beverly Hills. They were charged and found guilty of conspiring to bribe a government official of Thailand in exchange for being awarded contracts, including for control of the annual Bangkok International Film Festival. The Government alleged that the Greens paid approximately $1.8 million in bribes to Juthamas Siriwan, the former Governor of the Tourism Authority of Thailand, between 2002 and 2007, in exchange for contracts. The kickbacks were paid to Siriwan's daughter through banks in the United Kingdom and SIngapore. The Greens used different business names, with false addresses and telephone numbers, to conceal the payments. It alleged that the Greens' businesses earned approximately $13.5 million from the contracts.

The Greens' trial was the first involving the FCPA and the film industry, and lasted nearly three weeks. They will be sentenced in December. Mr. Green is 77 and Mrs. Green is 52. They face a maximum of up to 20 years in prison.

The Green case once again raises the dilemma of the interplay of U.S. laws and corrupt foreign customs and practices in some cases. Bribery, corruption and graft can be deeply ingrained in some foreign countries (fully recognizing that some areas of the U.S. suffer from the same!) and U.S. nationals and businesses operating in those countries may be expected or required to play along. For industries such as the U.S. film industry which frequently operates abroad, these situations can carry serious consequences under U.S. law. Individuals and businesses operating overseas which are confronted with such situations should consult counsel before determining how to act or respond.

Trial Ends in Case of Former Representative William Jefferson; Jury Deliberations to Begin Today

The trial of former Representative William Jefferson, which has gone on for six weeks in the U.S. District Court for the Eastern District of Virginia, will come to an end today. As reported by Ashby Jones at the Wall Street Journal Law Blog and UPI, both sides gave their closing arguments yesterday. Judge T.S. Ellis will give jury instructions and likely send the case to the jury this morning.

The case is best known for the infamous discovery of $90,000 in cash stuffed in boxes for burgers and pie crusts in the freezer at Jefferson's home by federal agents. Jefferson was indicted in 2007 on 16 counts of bribery, racketeering, and violations of the Foreign Corrupt Practices Act. The government charged Jefferson with using his position to promote business ventures in West Africa in exchange for cash payments for his family.

Assistant U.S. Attorney Rebecca Bellows argued during the govenrment's closing that Jefferson allegedly schemed to give at least $100,000 in cash (the "freezer money") to the Vice President of Nigeria, Atiku Abubakar, as a bribe in exchange for granting rights to a telecommunications company with ties to Jefferson's family. The government also played video and audio tapes of meetings between Jefferson and Virginia businesswoman Lori Mody, who was working for the government as an informant. In one video, Jefferson supposedly informed Mody that the cash would be "doled out" to "make sure the hook is in there," and on another tape Jefferson allegedly referred to the bribe as "a goodwill present."

The defense maintained during trial that Jefferson's conduct was stupid or unethical, but not criminal. Defense attorney Robert Trout told the jury during his closing arguments that the government wanted to make Jefferson's actions a crime when it was really a "gray area." He told the jury that Jefferson only agreed to give the money to Abubaker in order to please Ms. Mody.

Prior to closing arguments, Judge Ellis refused to dismiss an obstruction of justice count against Jefferson. Jefferson faces a lengthy prison sentence if convicted.


FBI Operation "Bid Rig" Nabs 44 Suspects in New Jersey Public Corruption, Illegal Organ Transplant and Designer Merchandise Schemes


The 44 public officials and other persons arrested in the massive sweep on Thursday by the FBI, the result of efforts by the convicted son of a rabbi, include:

Daniel Van Pelt, State Assemblyman;

Peter Cammarano III, Mayor of Hoboken, New Jersey;

Dennis Elwell, Mayor of Secaucus, New Jersey;

Anthony Suarez, Mayor of Ridgefield, New Jersey;

Leona Beldini, Deputy Mayor of Jersey City;

Mariano Vega, President of the Jersey City Council, Commissioner with the Jersey City Housing Authority and Director of Parks, Engineering and Planning for Hudson County, New Jersey;

L. Harvey Smith, President of the Jersey City Council and former State Assemblyman;

Lou Manzo former State Assemblyman;

Edward Cheatam, Jersey City Housing Authority Commissioner and Hudson County Affirmative Action officer;

Michael Schaffer an employee of the North Hudson Sewerage Authority and former Hoboken Councilman;

John Guarini, city taxi inspector and former 13th District Congressional candidate

Denis Jaslow, former 32nd District State Senate candidate;

Guy Catrillo, Michael J. Manzo and LaVern Webb Washington, former Jersey City City Council candidates;

Richard Greene, former aide to L. Harvey Smith;

Joseph Cardwell, Jack Shaw, political operatives;

Also Moshe Altman, Charles Amon, Joseph Castagna, Schmulik Cohen, Levi Deutsch, Yeshayahu Ehrental, Mordchai Fish, Yolie Gertner, David S. Goldhirsh, Shimon Haber, Eliahu Ben Haim, Itzak Friedlander, Saul Kassin, Maher A. Khalil, Ron Manzo, Edmond Nahum, Abraham Pollack, Levi Izhak Rosenbaum, Lori Serrano, Jack Shaw, Vincent Tabbachino, Jeffrey Williamson, Lavel Schwartz, Binyomin Spira, Naftoly Weber and Arye Weiss.

As reported by various sources here, here and here, the arrests were part of a 10-year, two-track investigation by the FBI, code named “Bid Rig” which uncovered three criminal schemes: bribery of public officials; an international money laundering ring operating between Deal, New Jersey, and Israel; and trafficking in illegal kidneys and Gucci bags. The schemes were uncovered by a confidential informant had been charged with bank fraud in 2006 and agreed to work with the FBI. Five rabbis from New Jersey and New York were among those arrested. Hundreds of federal agents raided the suspects’ homes in New Jersey and New York. There were so many arrestees that they had to be brought to FBI headquarters in Newark, New Jersey, by bus. One religious leader arrived in a Mercedes-Benz. Bail was set as high as $3 million for some of the suspects.

FBI Special Agent Ed Kahrer stated to reporters that New Jersey has one of the worst, if not the worst, public corruption problems in the nation, and that corruption has become “engrained” in New Jersey’s “political cult.” Acting U.S. Attorney Ralph J. Marra, Jr., announced that the conspiracy, which was headed by rabbis cloaked their criminal activity in a “facade of rectitute.”

Investigators stated that they have hundreds of hundreds of hours of video and audio recordings containing evidence of money laundering and bribery.

The Public Corruption and Bribery Cases

A criminal complaint filed against Hoboken Mayor Peter Cammarano, 32, alleges that Cammarano accepted a bribe in exchange for giving priority to an FBI informant posing as a real estate developer wanting to develop property in Hoboken. Hoboken’s waterfront contains prime real estate across from Manhattan. The informant is believed to have been Solomon Dwek, who was arrested in 2007 and charged with bank fraud for bouncing a $25 million check. Dwek is the son of Rabbi Isaac Dwek of the Deal Synagogue in Deal, New Jersey, which was raided by the FBI on Thursday. Dwek told the conspirators that he was in bankruptcy and was interested in hiding his assets.

The informant met Cammarano while he was running for Mayor and told Cammarano that he would give him $10,000. The complaint alleges that Cammarano promised the informant that he would sponsor the plans and treat the informant like a “friend.” Michael Schaffer, a North Hudson Utilities Authority commissioner and former Hoboken Councilman, allegedly acted as a middle man for the bribe.

Cammarano has only been in office for three weeks. He allegedly told the informant that those who oppose him get “ground into powder.” When the discussion turned to a possible runoff election with Cammarano’s challenger Dawn Zimmer, who lost the election by only 161 votes, Cammarano allegedly told the informant “I could be indicted and still get 85 to 95 percent of the vote.” Cammarano’s attorney, Joseph Hayden, has made a statement that Cammarano intends to fight the charges.

Cammarano is charged with allegedly accepting a total of $25,000 in cash bribes. Dennis Elwell, 64, Mayor of Secaucus is charged with allegedly accepting a $10,000 cash bribe and Anthony Suarez, 42, Mayor of Ridgefield, is also charged with allegedly accepting a $10,000 cash payment—for his legal defense fund.

L. Harvey Smith, Jersey City Council President, and several other current and former Jersey City public officials also are accused of allegedly accepting money to help the fake developer gain permits and approvals. Deputy Mayor of Jersey City Leona Beldini is charged with conspiracy to commit extortion for allegedly accepting $20,000 in illegal campaign contributions.

FBI agents raided the home and office of New Jersey Department of Community Affairs Commissioner and former State Senator Joe Doria as part of the investigation. Doria resigned on Thursday afternoon. Officials have not stated whether he will face charges.

The Money Laundering and Black Market Organ and Designer Goods Cases

Five rabbis from Deal and Brooklyn were charged with alleged money laundering and sale of fake designer bags. The rabbis were approached by Dwek and dealt with him, despite the fact that it was well known that he had been charged by the government. Dwek’s dealings with the rabbis eventually uncovered the public corruption case when a Jersey City building inspector accepted a $20,000 bribe. Rabbi Saul Kassin of Deal is charged with allegedly laundering more than $200,000. Mordchai Fish, a rabbi at Congregation Sheves Achim, and his brother, Lavel Schwartz, laundered nearly $600,000 for Dwek, giving him cash and taking a 15% cut.

Agents raided “cash houses” run by associates of the rabbis, including a charity called Bnoth Jerusalem and a beeper store.

Levy Rosenbaum, a Brooklyn resident, was charged in a criminal complaint with allegedly conspiring to broker a sale of a human kidney for transplant for $160,000. The complaint further alleged that Rosenbaum had been selling kidneys from vulnerable persons in Israel for 10 years, which he would purchase for $10,000 and sell in the U.S. for $160,000.

The public corruption scandals will undoubtedly figure into the current U.S. Senate contest between Senator Jon Corzine and former U.S. Attorney Chris Christie, who claims to have obtained 130 convictions of elected and appointed officials on corruption charges.


Judge Denies Motions to Dismiss in Miss. Judicial Corruption Case

Judge Davidson of the Northern District of Mississippi denied Circuit Judge Bobby Delaughter’s Motions to Dismiss the judicial bribery and mail fraud counts in the Dickie Scruggs related judicial bribery prosecution. Count One charges a conspiracy to violate 18 U.S.C. § 666, the federal bribery statute. The defense alleged that Count One failed to charge an offense because the bait dangled in front of Judge Delaughter, consideration for a federal judgeship, is not a thing of value. Giving short shrift to the motion to dismiss as more akin to a civil motion for summary judgment, Judge Davidson, opines that the government is entitled to put their proof on at trial.

As to the mail fraud counts, the defense contended that they failed because an ex parte communication does not equal a federal crime. Judge Davidson, states that, in fact, the indictment, “alleges that DeLaughter afforded the Scruggs’ legal team secret access to the court, along with the court’s proposed opinions, and therefore, received an unfair advantage in the Wilson v. Scruggs litigation.” Of course, this just simply makes sense, and the defense’s attempt to minimize this conduct will blow up on them if they take this case to trial. And, quite frankly, it is almost inconceivable that any fair minded judge could argue with a straight face that unfettered, ex parte access to the judge, in what is supposed to be an adversary system is not a violation of honest services mail fraud. Couch it as they may, Judge Delaughter’s counsel are straining at gnats in attemmpting to put the broad brush of innocence on this conduct.

Eleventh Circuit Reverses Former Alabama Gov. Seigelman's Convictions for Honest Services Fraud, Otherwise Affirms Siegelman's/Scrushy's Convictions in Bribery/HealthSouth Case

Former Alabama Governor Don Siegelman and former HealthSouth CEO Richard Scrushy were convicted of federal funds bribery, honest services conspiracy, honest services mail fraud, racketeering conspiracy, racketeering, honest services wire fraud, obstruction of justice and extortion in the U.S. District Court for the Middle District of Alabama back in 2006. Siegelman has alleged that his prosecution was spurred by the Republican party, especially former White House advisor Karl Rove. Siegelman and Scrushy appealed their convictions.

On March 6, a three judge panel of the Eleventh Circuit issued a per curiamopinion, U.S. v. Siegelman, NO. 07-13163, 2009 WL 564659 (11th Cir., Mar. 06, 2009) (per curiam). The Court began its opinion by acknowledging that the case was an “extraordinary” one, involving corruption at the highest levels of theAlabama government, and straining the resources of both the Alabama and federal governments. Id. at *1. It recited the facts as follows: Siegelman was elected Governor in 1998 and, after his election, established the Alabama Education Lottery Foundation (“Foudation”) to raise money for a ballot initiative to establish a state lottery. Id. at *2. Scrushy had served on the Alabama Certificate of Need (CON) Board, a healthcare regulatory body, by appointment under three previous Governors, but had supported Siegelman’s opponent in the 1998 election. Id. After the election, Nick Bailey, one of Siegelman’s associates, met with Eric Hanson, a lobbyist for HealthSouth, and told Hanson that Scrushy needed to contribute at least $500,000 to the Foundation to “make it right.” Id. Bailey and Mike Martin, former Chief Financial Officer of HealthSouth, testified at trial that Scrushy communicated that he was interested in making the contribution in exchange for the position on the CON Board. Id. at *2, *3. Martin testified that Scrushy instructed him to have HealthSouth’s investment banker, Bill McGahan of UBS, make the contribution, but McGahan balked at doing so, and instead had Integrated Health Services (“IHS”) of Maryland write a $250,000 donation to the Foundation in July of 1999, which Scrushy personally delivered to Siegelman. Id. at *3, *4. Siegelman subsequently contacted the designee Chariman of the CON Board and informed her that Siegelman wanted Scrushy to be Vice-Chair of the CON Board, and the CON Board selected Scrushy for the position. Id. at *4. In March of 2000, Scrushy gave Siegelman another check from HealthSouth for $250,000. Id.

The Court first considered Siegelman’s and Scrushy’s argument that the trial court’s instructions to the jury on bribery, pursuant to 18 U.S.C. § 666, erroneously failed to require the jury to find a quid pro quo, and that the defendants “expressly” agreed to a quid pro quo, in order to convict them.Id. at *6, *7. The Court recognized that the Supreme Court’s decision in McCormick v. United States, 500 U.S. 257 (1991) required more to convict a defendant of bribery than mere proof of a campaign donation followed by an act favorable for the donor. Id. at *7. It noted the Supreme Court’s holding that payments are only criminal if they “‘are made in return for an explicit promise or undertaking by the official to perform or not to perform an official act…’” Id. (emphasis in original) (quoting McCormick, at 273). However, the Court held that an “explicit” promise does not mean an “express” promise, and cited the Supreme Court’s subsequent decision in Evans v. United States, 504 U.S. 255 (1992), which held that the “‘Government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.’”Id. at *8 (quoting Evans, at 258). “[T]here is no requirement that this agreement be memorialized in a writing, or even, as defendants suggest, be overheard by a third party. Since the agreement is for some specific action or inaction, the agreement must be explicit, but there is no requirement that it be express.” Id. (emphasis in original). On the contrary, an “explicit” agreement may be implied from words and actions. Id. (citing Evans, at 274). The Court also rejected Siegelman’s and Scrushy’s arguments that the evidence was insufficient to support their bribery, conspiracy and honest services mail fraud convictions, noting that Bailey had testified at trial that Siegelman had told him that Scrushy wanted “the CON Board” in exchange for the donation, and that Bailey and Martin had given other testimony which indicated that Scrushy bribed Siegelman, holding that the jury could have inferred that Scrushy and Siegelman agreed to a corrupt quid pro quo from the surrounding circumstances. Id. at *10, *11.



However, the Court held that the Government failed to prove that Siegelman was guilty of two counts of honest services mail fraud. Id. at *13. The counts alleged that, after Scrushy’s appointment to the CON Board, Scrushy resigned and Siegelman appointed HealthSouth Vice-President Thom Carman to the Board. Id. at *11. Carman paid another Board member, Tim Adams, to prepare an application for a PET scanner, which was later approved by the Board. Id. While the Court noted the rules that if one participant of a fraudulent scheme uses the mails, then all participants are liable for that use of the mails, and that the acts of one partner in furtherance of a criminal enterprise are the acts of the other partner also, it observed that only one witness who testified regarding Scrushy’s bribery of Siegelman had any knowledge of Scrushy’s later self-dealing on the CON Board, and that there was not evidence that Siegelman and Scrushy entered into any agreement regarding self-dealing on the Board, or that Siegelman attempted to influence any decision of the Board. Id. at *12, *13 (citing United States v. Ward,486 F.3d 1212 (11th Cir. 2007); Belt v. United States, 73 F.2d 888, 889 (5th Cir. 1934)). The Court reversed Siegelman’s convictions on these counts. Id. at *29.

The Court also held that the defendants had waived their argument that their bribery convictions were barred by the statute of limitations by not raising the argument either before or during trial, stating that“[a]llowing a defendant to raise a limitations defense for the first time in a post-verdict Rule 29 motion ‘is inconsistent with the characterization of the statute of limitations as an affirmative defense and would unfairly sandbag the government.’” Id. at *15 (quoting United States v. Thurston, 358 F.3d 51, 63 (1st Cir.2004), vacated on other grounds, 543 U.S. 1097 (2005)). It found that there was sufficient evidence that Siegelman commited obstruction of justice in covering up a $9,200 “pay to play” payment to Lanny Young, a business associate of Siegelman’s, from federal investigators, by making it appear that Bailey had borrowed the money from Young to purchase a motorcycle from Siegelman. Id. at *15-*18. The Court rejected the defendant’s argument that the trial court erred in admitting an out-of-court statement by Hanson to Martin, holding that the statement furthered the conspiracy and was therefore admissible under Federal Rule of Evidence 801(d)(2)(E). Id. at *18, *19. Moreover, the Court rejected Siegelman’s and Scrushy’s numerous claims of juror misconduct, including juror exposure to extraneous information, which consisted of a copy of the Second Superseding Indictment obtained from the district court’s website and information from the court’s website concerning the foreperson's obligation to preside over the jury’s deliberations, and selected media coverage. Id. at *19-*22. It also dismissed as meritless Scrushy’s argument that he was entitled to a new trial based upon the fact that the trial judge possessed an ownership interest in two aviation companies doing business with the Government and failed to recuse himself. Id. at *26. The Court also held that the defendants’ arguments that the jury wheels from which the jury was selected violated the Juror Selection and Service Act of 1968, 28 U.S.C. §§ 1861 et seqId.

Furthermore, the Court rejected the defendants’ allegations of juror misconduct and improper deliberations based on purported electronic mails exchanged by the jurors during trial and deliberations, concluding that there were concerns regarding the authenticity of the purported e-mails, the strength of the government’s case against the defendants, the length of the jury’s deliberations, the trial court’s instructions to the jury, and the fact that the jury acquitted Siegelman of many of the charges against him supported  a conclusion that the jury carefully weighed the evidence and reached a reasoned verdict free of undue influence. *24-*25.

Finally, the Court held that the district court did not abuse its discretion in upwardly departing in sentencing Siegelman under Comment 5 to U.S.S.G. § 2C1.1, which permits an upward departure where the court finds that there was pervasive corruption of a governmental function resulting in a loss of public confidence in state or local government. Id. at *28. The Court cited the government’s argument that Siegelman had “for over six years abused the Executive Branch of the state of Alabama.” Id.