Category: International

Indicting at the Top

March 12th, 2006
Indictments of leaders and former leaders seems to be the "in thing" these days. Just look at some of the recent indictments here in the United States:
- Former Atlanta Mayor Bill Campbell who was only convicted of tax charges despite an attempt by prosecutors to convict him on racketeering and bribery charges;
- The jury is out on Former Illinois Governor Ryan;
- Former Louisiana Governor Edwin Edwards convicted on corruption charges;
- Then there is former Governor John Rowland;
- Duke Cunningham;
- And we certainly can’t forget "Scooter" Libby.
And there are others. But this is not unique to the United States it seems. The Wall Street Jrl reports here that Italian prosecutors are seeking the indictment of Premier Silvio Berlusconi on corruption charges.

I guess it is good to know that this is not just a U.S. thing.

(esp)
Ahold Trial – Sentence Difference

March 6th, 2006

If the defendants in the Ahold related trial are convicted, their sentences will not come close to what we have been seeing recently in the United States. According to CNN here the Dutch trial charges four defendants. The case results from alleged accounting issues coming from matters related to Ahold. If convicted, CNN notes that one of the charges "carries a maximum sentence of six years whereas fraud carries three years at most." A far cry from what we have been seeing in the United States.

According to a Washington Post story here of October 2004, the SEC did not pursue action against some of the individuals because of fear of double jeopardy problems with Dutch law. But the SEC did settle charges with Ahold’s former chief executive, Cees van der Hoeven- and Cees van der Hoeven is presently being prosecuted under Dutch law.

Ahold has not been charged. Ahold did not pay a fine to the SEC. (see here)

It’s corporate governance statement is here.

(esp)
Another One Caught in a Nigerian 419 Scam

March 2nd, 2006

The e-mails arrive with alarming regularity — at least if your address is publicly available like mine — imploring you to help the widow or orphans of a high level former government official from an African country whose untimely demise has left a large sum of money sitting in a bank waiting for you to help move it, for a cut of the profit of course. They are almost laughable, with the misspellings and appeals to greed cloaked in altruism. Except that, somehow, these missives continue to draw in people, some quite well-educated, who can lose large amounts of money chasing the pot of gold. An LA Times story (here) discusses another victim, this time Dr. Louis A. Gottschalk , a prominent psychiatrist at the University of California at Irvine, who may have been taken for upwards of $3 million over ten years as part of the scam. Dr. Gottschalk’s son, Guy, has filed a lawsuit to remove the 89-year old as the administrator of a family partnership because he has allegedly destroyed records to hide the amount of the losses from the scheme. Dr. Gottschalk has responded that his son is on a "vendetta." If the son’s claims about the scam are true, this may rank among the most successful Nigerian 419 frauds perpetrated, and it probably will encourage more e-mails seeking the next victim. I can’t wait to receive them. (ph)
Four Korean Executives Agree to Plea Bargain and Jail Sentences in Price Fixing Conspiracy

March 1st, 2006

Four Korean executives of Hynix Semiconductor Inc. entered guilty pleas to a single count of conspiracy to fix prices in the Dynamic Random Access Memory (DRAM) chip market that will include serving sentences from five to eight months in the United States. The defendants agreed to waive any challenges to U.S. jurisdiction over them and to pay $250,000 fines. The government’s investigation of the world-wide price-fixing conspiracy in the DRAM market, which includes sales in the U.S. of over $7 billion annually, has already snared leading manufactures who have entered guilty pleas and agreed to pay hefty fines: Samsung ($300 million), Hynix ($185 million), Infineon ($160 million), and Elpida Memory ($84 million). A Department of Justice press release (here) discusses the guilty pleas and the investigation. (ph)
Enron Isn’t All Texas

February 22nd, 2006

International issues arise in more and more cases, so it is not surprising to see issues of this nature in cases coming from Enron matters. According to CNN Money here, three bankers who were alleged to have worked on some matters with Andy Fastow have lost a court appeal in their fight against being extradited to the United States. Their next step will be to go to the House of Lords.

Interestingly, the ability to extradite them quickly comes from the passage of a treaty pertaining to terrorism matters, a treaty that provides an expedited process for extraditions to the United States.This case raises many issues: 1) Will the United States now be attempting to extradite more individuals from outside this country who might allegedly be involved in white collar crime conduct in this country? 2) Will other countries be as forthcoming to allow their citizens to be extradited to the U.S. for trial? 3) What are the ramifications when a country refuses to extradite its citizens to the United States? 4) Will businesses outside the United States be reluctant to do business with this country out of fear that it will subject them to extraterritorial jurisdiction here?

(esp)
Japanese Authorities Move Quickly in White Collar Case

January 23rd, 2006

Reported here, just days ago, was the raid on Livedoor Co. as part of a securities investigation in Toyko. It has not taken the Japanese authorities long to now arrest someone. The Washington Post reports here and the New York Times here on the arrest of Livedoor’s President, Takafumi Horie. This case will be an interesting one to follow, to see how another country handles a prosecution of a major CEO type of individual. One also has to wonder the effect of such a prosecution internationally, as some of the products operate in the global marketplace.

(esp)
Tokyo Investigation

January 16th, 2006

Investigation into alleged white collar criminal activity is not unique to the United States. According to the Wall Street Journal here, Tokyo prosecutors "raided" the Livedoor Co. in a securities investigation.

The Journal noted that the President of this company is a blogger. One has to wonder if some of the material from his blogs will form the evidence should there ultimately be a prosecution. Emails have been crucial in cases such as the Quattrone case, so one can only imagine what one might find in delving through the material of someone who might be tech savvy. On the other hand, a blog might be a voice to influence people against those conducting the investigation.

(esp)
White Collar Sentencing in China

December 28th, 2005

In the United States it has been a tough year for some individuals who have been found guilty of white collar offenses. The sentences have been well beyond what we saw in the past. Jamie Olis originally received a sentence of 24 years – although it has been reversed and he will be re-sentenced in January. Bernie Ebbers received 25 years and John Rigas, who is 80 years old, was issued a sentence of 15 years. These cases did not involve a fraud against the government, but rather were cases in the private sector of society. In looking at these enormous sentences, it appears that we are moving closer to a sentence we see issued this week in China.

China Daily reports here that a former minister will receive a life sentence for bribery. Additionally he will forfeit all his "personal belongings." AP reports here that other bribery cases in China have ended with an execution of the individual.

Should our sentences be moving closer to those issued in China, or should we be re-evaluating white collar sentences?

(esp)
Punishment for Alleged “Cash for Questions”

December 23rd, 2005

Some in India believe the punishment is too harsh and they are protesting. (See The Hindu here) It seems that the media conducted their own undercover sting operation and filmed several members of parliament in an alleged "cash for questions scam." (allegedly they took cash for asking questions in Parliament) (See NYTimes here). The result is that 11 members of the Parliament were expelled for conduct that is "unethical and unbecoming." According to the Times of India (here) one member of Parliament wants a chance to present a defense.

(esp)
Retrial of German Executives Ordered

December 21st, 2005

The German Federal Supreme Court ordered a retrial of six prominent executives, included Josef Ackermann, the CEO of Deutsche Bank, for their role in authorizing large bonuses to executives of Mannesmann in the wake a takeover of the company by Vodafone. The 57-million Euro payments to the Mannesmann executives, large by German standards but hardly a drop in the bucket compared to payments made to terminated executives in the U.S. (think Disney), were highly controversial and triggered a six-month trial involving an alleged breach of trust that ended in July 2004 with a dismissal of the charges. Another round may not necessarily result in a different verdict, but the trial may make it impossible for Ackermann to remain in his position at Deutsche Bank. An APF story (here) discusses the decision. (ph)