Fifth Circuit Decides Government Appeal In FCPA And Money Laundering Case

• Jurisdiction: United States,Federal
• Law Firm: Baker Botts
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Money Laundering, Trials & Appeals & Compensation
• Author: Mr Brendan Quigley
• Published date: 30 March 2023

On February 8, 2023, the Fifth Circuit reversed a trial court's dismissal of a criminal indictment charging two defendants with Foreign Corrupt Practices Act and money laundering violations. Although clearly a government victory, the case leaves open several issues relevant to FCPA prosecutions and international criminal investigations more generally and highlights important differences between criminal and civil advocacy.

Background

In 2019, a grand jury in the Southern District of Texas returned an indictment charging Daisy Teresa Rafoi Bleuler ("Rafoi"), Paulo Jorge Da Costa Caquiero Murta ("Murta") (collectively "the defendants"), and others with conspiring to violate the FCPA, conspiring to commit money laundering, and substantive money laundering charges. The indictment was based on an alleged scheme to solicit bribes from companies that did business with Venezuela's state-owned oil company and stated that Rafoi and Murta, who worked at Swiss wealth management firms, assisted in laundering the proceeds of that scheme.

As a basis for the FCPA conspiracy charge, the government relied on an FCPA provision prohibiting "agents" of "domestic concern[s]" from bribing foreign officials,¹ and, alternatively, on an FCPA provision making it unlawful for "person[s]" "in the territory of the United States" to "use . . . the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance of" a scheme to bribe foreign officials.²

The district court granted both defendants' motions to dismiss the indictment and granted Murta's motion to suppress statements he had made to Portuguese authorities, who interviewed him at the request of U.S. authorities prior to his indictment.

After getting the required consent of the Solicitor General, the government appealed

The Fifth Circuit's Decision

The Fifth Circuit's opinion reinstated the indictment and reversed the grant of the suppression motion. The decision contains several points of interest related to the FCPA and money laundering and to advocacy in the criminal context more generally.

Sufficiency of FCPA allegations as "enumerated actors" The Court's held that the indictment sufficiently alleged that the defendants had conspired to violate the FCPA. First, the Court held indictment sufficiently pled the defendants were liable as "enumerated actors," i.e., as falling in the categories of defendants specifically mentioned in the FCPA, in both defendants' cases as "agents" of a "domestic...