It seems that at present in the UK hardly a week goes by without somebody calling for a public inquiry or the government announcing that it intends to launch one. There have been, and remain, many calls for a public inquiry or inquiries into issues related to the COVID-19 pandemic, but there are also calls
In late December, the United States Court of Appeals for the Second Circuit affirmed the conviction of Chi Ping Patrick Ho on seven counts alleging multiple FCPA and money laundering (and related conspiracy) violations. The decision is notable for its construction of various FCPA provisions, and further demonstrates the expansive jurisdictional reach of anti-money laundering laws to dollar-denominated transfers.
Ho, a citizen of Hong Kong, served as an officer and director of the Hong Kong-based non-governmental organization China Energy Fund Committee (CEFC-NGO), which was funded by Shanghai-based energy conglomerate China CEFC Energy Company Limited (CEFC). Ho also served as an officer and director of a CEFC-affiliated US non-profit (US NGO), funded by CEFC NGO.
Ho’s conviction, for which he was sentenced to 36 months imprisonment and a US$400,000 fine, stemmed from two alleged bribery schemes involving (1) an attempted US$2 million cash delivery to the President of Chad (which was purportedly rejected by the President) and (2) a US$500,000 wire transfer to a charity associated with the foreign minister of Uganda. Notably, the US dollar-denominated wire originated from a bank in Hong Kong, which was transmitted through its operating unit in the United States as a correspondent to another bank in New York, which in turn was acting as a correspondent for a beneficiary bank in Uganda for final credit to an ultimate beneficiary NGO. Both acts were allegedly made for the benefit of CEFC’s commercial interests in Africa.
In a recent roundtable as part of the World Bank Office of Suspension and Debarment’s Fifth International Debarment Colloquium, panelist Joseph Mauro (an Integrity Compliance Specialist with the Bank’s Integrity Vice Presidency (INT)) discussed efforts to move from a “stick” to a “carrot” approach with respect to corporate compliance programs.
Under the Bank’s current system, while implementation of a compliance program is a remedial measure for which mitigating credit may apply, individuals within the Integrity Compliance Office were rarely involved in reviewing a compliance program to any significant extent until after a company has already been sanctioned. Under this process, a company’s compliance program was typically reviewed in-depth only as a condition for release from sanction.
On March 5, 2019, federal prosecutors indicted Mikaela Sanford, former employee of Varsity Blues mastermind William “Rick” Singer, alleging a racketeering conspiracy between Sanford, two proctors for the ACT and SAT exams, and 12 coaches and officials from Georgetown University, the University of Southern California, the University of California, Los Angeles and Wake Forest University. On August 7, 2020, Sanford agreed to plead guilty to one count of conspiracy to commit racketeering, becoming the 7th individual to plead guilty to the charge.
Five days later, US District Judge Nathaniel M. Gorton sentenced Morrie Tobin – the man who tipped off federal prosecutors to the Varsity Blues college admissions scheme – for his role in two unrelated securities fraud schemes. According to federal prosecutors, Tobin alerted the government – during the government’s investigation into Tobin for securities fraud – that former Yale University women’s soccer coach Rudy Meredith sought a bribe in exchange for getting Tobin’s daughter into Yale. Although federal prosecutors did not charge Tobin in connection with the Varsity Blues scheme, Tobin’s sentencing hearing confirmed his identity as the Varsity Blues tipster in open court for the first time.
On July 29, 2020, US District Judge Nathaniel M. Gorton sentenced Hercules Capital, Inc. Founder Manuel Henriquez to six months in prison for his part in the “Varsity Blues” college admissions scheme. In addition to the six-month term, Judge Gorton also ordered Henriquez to complete 200 hours of community service and pay a $200,000 fine. Henriquez’s sentence is one month less than that of his wife, Elizabeth Henriquez, who received a seven-month sentence on March 31, 2020. Manuel Henriquez, who pled guilty on October 21, 2019, is the 16th parent sentenced, and the last of four parents federal prosecutors dubbed “the most culpable parents charged.”
Manuel Henriquez’s Conduct
Prosecutors alleged Henriquez and his wife paid William “Rick” Singer nearly $50,000 to facilitate cheating on their two children’s college entrance exams. According to prosecutors, the Henriquezes cheated on more standardized test than any other co-conspirator: twice for their oldest daughter and three times for their youngest daughter. Prosecutors also alleged that the Henriquezes paid Singer $400,000 in bribes to get their oldest daughter into Georgetown as a fake tennis recruit in 2016, and that Manuel Henriquez agreed to use his position as a prominent alumnus and former Member of the corporation at Northeastern University to advocate for the admission of one of Singer’s other students.
On July 3, the US Department of Justice (DOJ) and Securities and Exchange Commission (SEC) issued the second edition of the Resource Guide to the US Foreign Corrupt Practices Act (the 2020 Guide), the first full-scope overhaul of the Resource Guide since its issuance in 2012. As with the original edition, the 2020 Guide…
Institutions of Higher Education are increasingly finding themselves in the crosshairs of high-profile criminal enforcement efforts. Recent headlines have highlighted a number of investigations and prosecutions that have achieved literal celebrity status:
- The indictments and convictions of wealthy parents of college applicants in the Varsity Blues investigation, who are alleged to have paid bribes in
The Second Circuit’s latest opinion in the FIFA bribery investigation – United States v. Napout (United States v. Napout, Nos. 18-2750 (L), 18-2820 (Con), __ F.3d__, 2020 WL 3406620 (2d Cir. June 22, 2020)) – wades into the murky waters of the extraterritorial reach of US fraud statutes and the inherent ambiguity continuing to plague the so-called right to “honest services.”
The US government’s expansive interpretation of its jurisdiction under various fraud statutes in cases involving only minimal, attenuated, links to US territory through US electronic mail systems, cellular phone networks, and bank wire transfers, coupled with the ubiquity of these facilities in modern commerce, substantially increases the risk that foreign entities and individuals may be forced into US criminal investigations.
The Second Circuit’s opinion in Napout, which was deferential to the district court’s findings, leaves room for future courts to reach a different outcome in similar cases.
On June 22, the US Supreme Court weighed in on a question it explicitly left open in Kokesh v. SEC – whether, and to what extent, the Securities and Exchange Commission (SEC) in a civil enforcement action may seek “disgorgement” as “equitable relief that may be appropriate or necessary for the benefit of investors” under…
Remarkably, we issued the advisory notice below a decade ago to serve as a guide for avoiding and managing the most sensitive matters before increasingly ambitious US state prosecutors – guidance that, following years of public corruption, pay-to-play and other high-profile financial matters, particularly in New York and California, is every bit as apt now…