Nadine Tushe Writing Sample Ethisphere
Published on: Mar 3, 2016
Transcripts - Nadine Tushe Writing Sample Ethisphere
28 29ETHISPHERE.COM ETHISPHERE.COM
This article will provide an overview of
four other laws that can be used to supple-
ment and expand the reach of the FCPA in
foreign bribery cases: (1) the Money Laun-
dering Control Act (MLCA); (2) the Travel
Act; (3) the mail and wire fraud statutes;
and (4) the Racketeer Influenced and Cor-
rupt Organizations Act (RICO).
1. The Money Laundering Control Act
With the paying of a bribe often comes
funds. The Money Laundering Control Act
(MLCA), 18 U.S.C. § 1956, enacted nine years
after the FCPA, made it a separate offense
to launder proceeds of “specified unlawful
activity,” including foreign public bribery.
The Department of Justice (“DOJ”) has
drawn on the MLCA both to supplement
the FCPA and to expand its reach.
One motivation for prosecutors to bring
in the MLCA is its comparatively severe
sentencing for individuals. An individual
may be sentenced to up to five years of
incarceration for an FCPA bribery count,
but up to 20 years for each money launder-
ing count. The longest ever FCPA sentence
of 15 years in prison, given in 2011 to tele-
com executive Joel Esquenazi, was driven
largely by his conviction on money laun-
The MLCA also has the power to expand
anti-corruption enforcement to areas un-
reachable by the FCPA. While “foreign offi-
the FCPA, they may be charged with vio-
lating the MLCA. The 11th Circuit brought
this into sharp focus earlier this year when
it affirmed the conviction of Haitian tele-
com official Jean Rene Duperval on money
laundering charges. Duperval had been
the first public official to be convicted at
trial for money laundering based on an
underlying FCPA bribery scheme.
The Duperval ruling has implications
beyond prosecutions of foreign officials
alone, as the DOJ may now better use
money laundering charges to convince
foreign officials and others to cooperate
in pursuing US companies and executives
for FCPA violations. Now that its power
has been demonstrated, expect the MLCA
to remain a feature of the US govern-
ment’s anti-bribery efforts.
2. The Travel Act
The Travel Act, 18 U.S.C. § 1952, prohibits
the use of the facilities of interstate or for-
eign commerce to intentionally support
any unlawful activity, including bribery in
violation of state or federal laws. These fa-
cilities of commerce include such common
transactions as cross-border phone calls,
emails, and wire transfers.
While the relevant provisions of the fed-
eral anti-bribery law, the FCPA, only ap-
ply to conduct involving public officials,
the majority of states have laws also
criminalizing commercial bribery. Thus,
as the SEC and DOJ themselves affirm in
the 2012 FCPA Resource Guide, the Travel
Act effectively enables the federal govern-
ment to reach commercial as well as pub-
lic foreign bribery. The Travel Act is also
formidable in that a violation is defined
by the mere use of the facilities of foreign
or interstate commerce, even if the bribe
or other underlying unlawful activity is
not ultimately successful.
The DOJ has not been hesitant to use the
Travel Act against both individuals and
corporations in the context of foreign
bribery, both to fortify and to expand the
reach of the FCPA. In 2009, investor Vik-
tor Kozeny was convicted of conspiracy to
violate the FCPA and Travel Act, with the
relevant “unlawful activity” being bribery
in violation of the FCPA in Azerbaijan.
That same year, California company Con-
trol Components pleaded guilty to con-
spiracy to violate the FCPA and Travel
Act based on both bribery of foreign offi-
cials and commercial bribery in violation
of California state law. When designing
employee trainings and other aspects of
a compliance program, companies must
take into account the enhanced reach
provided by the Travel Act.
3. Mail and Wire Fraud Statutes
The older, more general mail and wire
fraud statutes, 18 U.S.C. §§ 1341 and 1343,
are other possible complements to FCPA
prosecutions cited in the DOJ and SEC
Resource Guide. Like the Travel Act, the
mail and wire fraud statutes bring a crime
that might otherwise be local into federal
jurisdiction by virtue of the use of an in-
strumentality of interstate commerce.
In one 2006 case, SSI International Far
East, Ltd., a wholly owned foreign sub-
sidiary of a US issuer company, pleaded
guilty to wire fraud charges related to its
use of funds wired from the parent com-
pany’s Oregon bank account. The funds
were used to pay illegal commission pay-
ments and kickbacks to public and pri-
vate parties, disguised as refunds, com-
missions, and other legitimate payments.
This provides yet another illustration of
how other laws can be used to encompass
conduct that might not otherwise fall
squarely under the FCPA.
The Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. §§
1961-1968, prohibits the use of an “enter-
prise” to pursue a “pattern of racketeering
activity,” defined in the statute by certain
“predicate acts” including bribery, mail
Other US Laws Applied to Foreign Bribery
Written by Nadine Tushe
BEYOND THE FCPA
When designing a compliance program,
companies must be informed of the standards
demanded by the full array of legislation
applicable to businesses abroad.
In the headlines on bribery abroad, the Foreign Corrupt
Practices Act, or FCPA, is the law that often steals the
spotlight. With its groundbreaking extraterritorial
reach and colossal settlement figures, this attention
is not unwarranted. However, companies should be
aware that the FCPA is only one of the tools that can be
employed in prosecuting foreign bribery.
// Risk & Corruption
The majority of states have
laws criminalizing commercial
bribery, extended to federal
enforcement via the Travel
Act. These include:
• California, Cal. Penal Code
• Delaware, Del. Code Ann.
tit. 11, § 881
• Florida, Fla. Stat. § 838.16
• Illinois, 38 Ill. Comp. Stat.
• Massachusetts, Mass. Gen.
Laws ch. 271 § 39
• New Jersey, N.J. Stat. Ann.
• New York, N.Y. Penal Code
• Texas, Tex. Penal Code Ann.
and wire fraud, and money laundering.
The statute allows leaders of a criminal
operation to be tried for crimes that they
ordered or assisted others to perform.
Originally intended to target the Mafia,
the law has since been applied in a vari-
ety of contexts, with corporate CEOs and
controlling shareholders often taking the
place of “godfathers” as defendants.
RICO liability turns on whether foreign
bribery is found to be part of a “pattern of
racketeering.” Although courts have dif-
fered in finding whether or not the statute
should apply extraterritorially, its range
of criminal and civil penalties, the latter
including treble damages, makes it a pow-
erful possibility both for prosecutors and
for civil plaintiffs aware of a company’s al-
leged foreign bribery activities.
Along with the FCPA, these four stat-
utes are major features of the complex
and dynamic legal landscape surround-
ing foreign bribery. When designing a
compliance program, companies must be
informed of the standards demanded by
the full array of legislation applicable to
Nadine Tushe is an anti-bribery
anti-corruption (ABAC) specialist with
STEELE CIS. An attorney from The
George Washington University Law
School, her work experience includes
the World Bank, International Trade
Commission, and Overseas Private
Investment Corporation. She is a
published author on the subjects of
export controls, public procurement, and
trade and investment agreements.
This report is for informational purposes only,
and should not be construed as legal advice,
which has to be addressed to the particular
facts and circumstances. If you have questions
as to what laws apply to your situation, contact
an attorney with the relevant expertise.