In FCPA Milestone, Calif. Company, Officers Convicted of Bribing Mexican Utility

Amanda Bronstad All Articles

The National Law Journal

May 13, 2011

A federal jury has found a California company and two of its senior executives guilty of violatingthe Foreign Corrupt Practices Act by paying bribes, including a $300,000 red Ferrari, to two officials from a state-owned electric utility company in Mexico.Lindsey Manufacturing Co., Chief Executive Officer Keith Lindsey and Chief Financial Officer Steve Lee each was convicted on Tuesday on all counts -- one of conspiracy to violate the FCPA and five of FCPA violations.

The jury also convicted Angela Aguilar on one count of conspiracyto launder money. U.S. District Judge A. Howard Matz had thrown out a second count of money laundering against her on Monday. She is the wife of Enrique Aguilar, president of Mexican company Grupo International, which worked as a sales agent for Lindsey Manufacturing.

Jan Handzlik, a shareholder in the Los Angeles office of Greenberg Traurig who represents Lindsey Manufacturing and Keith Lindsey; Janet Levine, a partner in the Los Angeles office of Crowell & Moring, who represents Lee; and Stephen Larson, a partner at Girardi & Keese in Los Angeles, who represents Angela Aguilar, did not respond to requests for comment.

"Today's guilty verdicts are an important milestone in our FCPA enforcement efforts," said Assistant Attorney General Lanny Breuer of the Justice Department's criminal division, in a prepared statement. "Lindsey Manufacturing is the first company to be tried and convicted on FCPA violations, but it will not be the last."

Steven Martinez, FBI special agent-in-charge of the Los Angeles field office, added: "The guilty verdicts announced today should send a strong message to large public corporations and small businesses alike, that bribing foreign officials to obtain a competitive advantage is a crime and will be prosecuted."

The case was one of the few to go to trial over FCPA violations and had been closely watched nationwide.

Sentencing is scheduled for Sept. 16. Lindsey and Lee face maximum prison sentences of 30 years -- five years and a fine of at least $250,000 on the FCPA conspiracy charge, and five years and a fine of at least $100,000 for each of the additional five FCPA counts. Aguilar, who is scheduled to be sentenced on Aug. 12, faces a maximum of 20 years in prison and a fine of at least $500,000. Her husband has been charged but remains a fugitive.

The jury deliberated for one day following a one-month trial. The verdict came one day after Handzlik and Levine filed a motion alleging prosecutorial misconduct, arguing that an FBI special agent lied during her grand jury testimony.

"Sadly, there is considerable evidence of substantial and sustained prosecutorial misconduct throughout this case," they wrote. FBI Special Agent Susan Guernsey's grand jury testimony was "riddled with material misrepresentations and falsehoods," they added.

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