Two Telecommunications Executives Convicted by Miami Jury on all Counts for their Involvement in Scheme to Bribe Officials at State-Owned Telecommunications Company in Haiti
On August 5, 2011, Joel Esquenazi and Carlos Rodriguez, former executives of Terra Telecommunications Corporation (Terra), were convicted by a federal jury on all counts for their roles in a scheme to pay bribes to Haitian government officials at Telecommunications DHaiti S.A.M. (Haiti Teleco).
Esquenazi, the former president of Terra, and Rodriguez, the former executive vice president of Terra, were convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering. Terra had a series of contract with Haiti Teleco, the the sole provider of land line telephone service in Haiti, that allowed the companys customers to place telephone calls to Haiti.
The Foreign Corrupt Practices Act makes it a federal crime for U.S. persons or companies, along with their subsidiaries and agents, to bribe officials of foreign countries in return for some business advantage. The conspiracy to commit violations of the FCPA and wire fraud count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the grater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count and the money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of property involved in the transaction.
According to prosecutors, the defendants participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005. The telecommunications company paid more than $890,000 to shell companies to be used for bribes to Haiti Teleco officials. To conceal the bribe payments, the defendants used the shell companies to receive and forward the payments. The defendants also created false records claiming that the payments were for “consulting services,” which were never performed.
The purpose of the bribes was to obtain various business advantages from the Haitian officials for Terra, including the issuance of preferred telecommunications rates, reductions in the number of minutes for which payment was owed, and the continuance of Terras telecommunications connection with Haiti.
Sentencing for both defendants was scheduled for October 13, 2011. Esquenazi was remanded into federal custody immediately after the verdict, while Rodriguez remains free on bond.
The verdict is significant because most FCPA prosecutions are resolved prior to trial via plea agreements or deferred prosecution agreements with the government. The government is emphasizing prosecutions of the FCPA against individuals, not just corporations for the deterrent effect of prison sentences on other potential violators. Most FCPA prosecutions are conducted by a team of prosecutors and agents based in Washington dedicated to that task.
Lawyers at Fuerst Ittleman are experienced in representing individuals and corporations facing scrutiny from the government regarding foreign bribery and money laundering allegations. We also conduct internal investigations of businesses to determine whether those businesses are in compliance with the FCPA and money laundering laws when conducting their international business.