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Foreign Corrupt Practices.


Azerbaijan began privatizing various state assets and the candidates for privatization included SOCAR, a state-owned oil company. Defendants Viktor Kozeny and Frederic Bourke Jr. conspired with others in a scheme to illegally purchase SOCAR by bribing the Azerbaijani president and other officials. After a jury trial, Bourke was convicted of conspiring to violate the Foreign Corrupt Practices Act ("FCPA"), 15 U.S.C. [section] 78dd-1 et seq., 18 U.S.C. [section] 371, and the Travel Act, 18 U.S.C. [section] 1953, and of making false statements in violation of 18 U.S.C. [section] 1001. The district court denied Bourke's motions for new trial and for judgment of acquittal. On appeal, Bourke argued that the jury instructions given with regard to the FCPA were incorrect.

The U.S. Court of Appeals for the Second Circuit affirms the district court's denial for a new trial and judgment for acquittal.

Regarding the jury instructions for the FCPA violation, the Court evaluates the instructions given for three elements of the charge, including conscious avoidance, mens rea, and good faith.

For conscious avoidance, the district court instructed the jury:

The FCPA provides that a person's state of mind is knowing with respect to conduct, a circumstance, or a result if, and I'm quoting from the statute, the FCPA, if such person is aware that such person is engaging in such conduct; that such circumstance exist [sic] or that such result substantially is certain to occur, or such person has a firm belief that such circumstances exist or that such result is substantially certain to occur. That's the end of the quote. When knowledge of existence of a particular fact is an element of the offense, such knowledge may be established when a person is aware of a high probability of its existence, and consciously and intentionally avoided confirming that fact. Knowledge may be proven in this manner if, but only if, the person suspects the fact, realized its high probability, but refrained from obtaining the final confirmation because he wanted to be able to deny knowledge. On the other hand, knowledge is not established in this manner if the person merely failed to learn the fact through negligence or if the person actually believed that the transaction was legal. [Slip op. 13]

"A conscious avoidance instruction permits a jury to find that a defendant had culpable knowledge of a fact when the evidence shows that the defendant intentionally avoided confirming the fact." United States v. Ferrarini, 219 F.3d 145, 154 (2d Cir. 2000). "The jury may be instructed on conscious avoidance only where '(1) the defendant asserts the lack of some specific aspect of knowledge required for conviction, and (2) the appropriate factual predicate for the charge exists. ...' Id." [Slip op. 13-14]

Quoting the Court's decision in United States v. Ferrarini, 219 F.3d 145 (2d Cir. 2000), it states that "[A] jury could be given a conscious avoidance instruction in a case where there was only equivocal evidence that the defendant had actual knowledge and where there was no evidence that the defendant deliberately avoided learning the truth. Under those circumstances, a jury might conclude that no actual knowledge existed but might nonetheless convict, if it believed that the defendant had not tried hard enough to learn the truth." Id. at 157; [Slip op. 14]. Since the Court finds that there was ample evidence that Bourke had actual knowledge of the bribery scheme, it determines that the district court's jury instruction was sufficient.

Secondly, for the mens rea element of the conspiracy to violate the FCPA charge, the district court instructed:

The third element, corruptly and willfully: The third element of a violation of the FCPA is that the person intended to act corruptly and willfully. A person acts corruptly if he acts voluntarily and intentionally, with an improper motive of accomplishing either an unlawful result or a lawful result by some unlawful method or means. The term "corruptly" is intended to connote that the offer, payment, and promise was intended to influence an official to misuse his official position. A person acts willfully if he acts deliberately and with the intent to do something that the law forbids, that is, with a bad purpose to disobey or disregard the law. The person need not be aware of the specific law and rule that his conduct may be violating, but he must act with the intent to do something that the law forbids. [Slip op. 19]

The Court finds that this jury instruction was proper because it directed the jury to make the necessary findings. Since the district court instructed that in order for the jury to convict, it must find that Bourke knew and intended for the conspiracy to occur, one possible object of the conspiracy was to violate the FCPA, and that one must act willfully and corruptly to violate the FCPA, the instructions were proper.

Third, with regard to the good faith element of the conspiracy charge, the district court did not give a jury instruction, which Bourke argued was an error. The Court holds that the district court was not required to give an instruction simply because the defendant requested it. Instead, the Court determines that the good faith element of the charge was found elsewhere in other instructions. For instance, the district court instructed the jury that the government did not meet its burden if the defendant merely failed to learn the fact through negligence or if the person actually believed that the transaction was legal.

The Court analogizes the instructions given by the district court to the ones given in another Second Circuit case, United States v. Doyle, 130 F.3d 523 (2d Cir. 1997), where it held that it was not error for the district court to refuse to charge that the Government had the burden to prove bad faith. Since the instructions were similar, the Court upholds the district court, and affirms Bourke's conviction.

CITATION: United States v. Kozeny, 2011 U.S. App. LEXIS 24740 (2d Cir. Dec. 14, 2011).
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Publication:International Law Update
Geographic Code:9AZER
Date:Jul 1, 2011
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