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District Court Sets Parameters of Agency Liability for Foreign Nationals in FCPA Prosecutions

Recently, the United States District Court for the District of Connecticut issued its order in United States v. Hoskins, vacating a jury’s November 2019 conviction of a foreign entity’s executive for violating the Foreign Corrupt Practices Act (“FCPA”). The court’s decision, which looks closely at the defendant’s relationship with a domestic concern1, is likely to guide future FCPA prosecutions that premise liability on an agency relationship.

Defendant Lawrence Hoskins is a British citizen, employed by Alstom UK Limited, a British subsidiary of Alstom, who worked primarily for Alstom Resource Management SA, a French subsidiary of Alstom. Hoskins allegedly participated in a corruption scheme to secure a $118 million contract in Indonesia for Alstom’s American subsidiary, Alstom Power, to provide power-related services to Indonesia. Hoskins allegedly hired two consultants, who bribed Indonesian officials to secure the contract.  For his role, Hoskins never traveled to the United States while the alleged bribery scheme was ongoing.

The case went to trial, and in November 2019, the jury found that Hoskins, a foreign national, employed by a foreign entity, who never set foot in the United States, violated the FCPA for his conduct related to Alstom Power.

Hoskins later argued that he was entitled to an acquittal on all FCPA related counts because the government failed to prove that he was an agent of Alstom Power, the relevant domestic concern. The court agreed with Hoskins. Relying on the traditional agency-based liability principles, the court found that Alstom Power lacked sufficient control over Hoskins. Specifically, there was no evidence that Alstom Power controlled Hoskins’ efforts to achieve the objectives set by Alstom Power. Nor was there evidence that Alstom Power had the power to terminate Hoskins’s authority to participate in the hiring of consultants to lobby for the Indonesian project, assess his performance, or otherwise exert control over his actions. It is expected that the government will appeal the court’s decision. 

FCPA prosecutions continue to be premised on novel theories, including cases against foreign nationals, working for foreign entities, and acting outside the territorial boundaries of the United States, which require experienced and nimble defense teams. Interested readers are encouraged to check back for future e-alerts on the FCPA any updates in Hoskins


 “Domestic concern” is a broad term that covers any individual who is a citizen, national, or resident of the United States, and most business organized under state or federal law or with principal places of business in the United States. 15 U.S.C. § 78dd–2(h)(1)(A), (B).

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 80

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About this Author

Melissa S. Ho Shareholder Phoenix Antitrust, Antitrust - Health Care Compliance, Fraud and Abuse, Stark, Financial and Securities Litigation, Financial Technology, Regulation Government Investigations, Health Care Litigation
Shareholder

Melissa Ho is a trial attorney with a detailed understanding of government regulations and business litigation. A former prosecutor, she is sympathetic to the disruption and chaos a government inquiry and criminal investigation can cause. 

Melissa defends individual clients against a wide variety of criminal allegations, including health care fraud, qui tam, RICO violations, bank fraud, real estate fraud, mortgage fraud, foreign corrupt practices, securities fraud, water and air quality violations, government corruption, procurement and public fraud, professional misconduct, civil...

602-650-2028
Andrew T. Fox Phoenix Polsinelli Government Investigations Labor and Employment Commercial Litigation Litigation and Dispute Resolution
Associate

As a member of Polsinelli’s Government Investigations practice, Andrew assists clients in all aspects of white collar criminal defense and internal corporate investigations. Working to understand each client’s unique situation, he helps guide clients through government inquiries and provides counsel that aligns to their business strategies. Andrew has experience drafting briefs, memoranda and responding to discovery requests.

Prior to joining Polsinelli, Andrew served as a law clerk to The Honorable Judge Douglas L. Rayes on the United States District Court for the District of Arizona.

602-650-2014