Justia International Law Opinion Summaries

According to the indictment, Defendant, a citizen of Switzerland and a partner in a Swiss wealth-management firm, and co-Defendant, a citizen of Portugal and Switzerland and an employee of a different Swiss wealth-management firm (together, “Defendants”), engaged in an international bribery scheme wherein U.S.-based businesses paid bribes to Venezuelan officials for priority payment of invoices and other favorable treatment from Venezuela’s state-owned energy company. A grand jury returned a nineteen-count indictment charging Defendants with various offenses stemming from their alleged international bribery scheme. The district court granted Defendants’ motions to dismiss.   The Fifth Circuit reversed and remanded. The court held that the district court’s grant of Defendants’ motions to dismiss was improper because the indictment adequately conforms to minimal constitutional standards. Further, the indictment did not violate co-Defendant’s due process rights. Moreover, the court wrote the district court’s conclusion that Section 3292 failed to toll the statute of limitations is erroneous. The court explained that the totality of the circumstances indicates that a reasonable person in co-Defendant’s position would not have equated the restraint on his freedom of movement with formal arrest. View "USA v. Murta" on Justia Law

Plaintiff brought this putative class action against more than twenty banks and brokers, alleging a conspiracy to manipulate two benchmark rates known as Yen-LIBOR and Euroyen TIBOR. He claimed that he was injured after purchasing and trading a Euroyen TIBOR futures contract on a U.S.-based commodity exchange because the value of that contract was based on a distorted, artificial Euroyen TIBOR. Plaintiff brought claims under the Commodity Exchange Act (“CEA”), and the Sherman Antitrust Act, and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).   The district court dismissed the CEA and antitrust claims and denied leave to add the RICO claims. Plaintiff appealed, arguing that the district court erred by holding that the CEA claims were impermissibly extraterritorial, that he lacked antitrust standing to assert a Sherman Act claim, and that he failed to allege proximate causation for his proposed RICO claims.   The Second Circuit affirmed. The court explained that fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Here Plaintiff failed to allege any significant acts that took place in the United States. Plaintiff’s CEA claims are based predominantly on foreign conduct and are thus impermissibly extraterritorial. As such, the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Finally, Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law

Plaintiff brought this putative class action against more than twenty banks and brokers, alleging a conspiracy to manipulate two benchmark rates known as Yen-LIBOR and Euroyen TIBOR. Plaintiff brought claims under the Commodity Exchange Act (“CEA”), and the Sherman Antitrust Act, and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). The district court dismissed the CEA and antitrust claims and denied leave to add the RICO claims. Plaintiff appealed, arguing that the district court erred by holding that the CEA claims were impermissibly extraterritorial, that he lacked antitrust standing to assert a Sherman Act claim, and that he failed to allege proximate causation for his proposed RICO claims.   The Second Circuit affirmed. The court explained that the conduct—i.e., that the bank defendants presented fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Indeed, Plaintiff fails to allege any significant acts that took place in the United States. Plaintiff’s CEA claims are based predominantly on foreign conduct and are thus impermissibly extraterritorial. Further, the court wrote that the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Lastly, the court agreed that Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law

Following proceedings in district court, the trial court t entered a final judgment, finding Defendant liable, ordering him to disgorge over $4,000,000 in funds, and placing two of his entities under receivership in order to sell and reorganize assets to repay investors. Later, a federal grand jury sitting in Miami returned a superseding indictment that described consistent with the district court’s findings of fact.   After an extradition request was filed by the United States, the Supreme Court of Brazil allowed him to be extradited. He returned to the United States, and on the eve of trial, following over a year of pretrial proceedings, Defendant entered into a plea agreement, agreeing to plead guilty to one count of mail fraud. The district court later sentenced Defendant to 220 months’ imprisonment and ordered him to pay $169,177,338 in restitution.   On appeal, Defendant broadly argues: (1) that the custodial sentence imposed and the order of restitution violate the extradition treaty; and (2) that his guilty plea was not made freely and voluntarily. The Eleventh Circuit affirmed. The court explained that the district court fully satisfied the core concerns of Rule 11, and the court could discern no reason to conclude that the district court plainly erred in finding that Defendant’s guilty plea was entered knowingly and voluntarily. The court explained that in this case, the record fully reflects that Defendant agreed to be sentenced subject to a 20-year maximum term, and his 220-month sentence is near the low end of his agreed-upon 210-to-240-month range. View "USA v. John J. Utsick" on Justia Law

The City of Almaty, in Kazakhstan, filed suit against defendant and his family under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging that they engaged in a scheme to defraud the city of millions of dollars. The City claimed that it was forced to spend money and resources in the United States to trace where its money was laundered. The district court dismissed the City's claim on the basis that it failed to state a domestic injury pursuant to the Supreme Court's recent decision in RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2090 (2016).The Ninth Circuit held that the City failed to state any cognizable injury other than the foreign theft of its funds, and its voluntary expenditures were not proximately caused by defendants' acts of money laundering. In this case, the City's expenditure of funds to trace its allegedly stolen funds is a consequential damage of the initial theft suffered in Kazakhstan and is not causally connected to the predicate act of money laundering. View "City of Almaty v. Khrapunov" on Justia Law

The Ninth Circuit affirmed defendant's conviction for engaging in a monetary transaction of over $10,000 derived from a specified unlawful activity, in violation of 18 U.S.C. 1956. In this case, defendant, a citizen of South Korea employed at a government-funded research institute, solicited and received payments from two seismometer manufacturers in exchange for ensuring that the research institute purchased their products, and gave the companies inside information about their competitors.The panel held that "bribery of a public official" in section 1956 is defined by that phrase's ordinary, contemporary, common meaning and is not constrained by 18 U.S.C. 201, a statute to which section 1956 makes no reference. Because the panel found the crime described in Article 129 of the South Korean Criminal Code fits comfortably within the ordinary meaning of "bribery of a public official" as used in section 1956, the panel held that the indictment was sufficient and that there was no instructional error. View "United States v. Heon-Cheol Chi" on Justia Law

The Second Circuit affirmed defendant's conviction of paying and conspiring to pay bribes, in violation of 18 U.S.C. 371, 666, and the Foreign Corrupt Practices Act (FCPA), and gratuities to United Nations officials and of related money laundering. Defendant's charges stemmed from his sustained effort to bribe two U.N. officials to designate one of his properties as the permanent site of an annual U.N. convention.The court held that the word "organization" as used in section 666, and defined by 1 U.S.C. 1 and 18 U.S.C. 18, applies to all non‐government legal persons, including public international organizations such as the U.N. The court also held that the "official act" quid pro quo for bribery as proscribed by 18 U.S.C. 201(b)(1), defined by id. section 201(a)(3), and explained in McDonnell v. United States, does not delimit bribery as proscribed by section 666 and the FCPA. Thus, the district court did not err in failing to charge the McDonnell standard for the FCPA crimes of conviction. Insofar as the district court nevertheless charged an "official act" quid pro quo for the section 666 crimes, that error was harmless beyond a reasonable doubt. Finally, the evidence was sufficient to convict defendant, and the jury did not misconstrue the "corruptly" element of section 666 and the FCPA and the "obtaining or retaining business" element of the FCPA. View "United States v. Ng Lap Seng" on Justia Law

Plaintiffs filed suit alleging that defendants, while located in foreign nations, used the mail or wires to order fraudulent asset transfers from plaintiffs' New York bank accounts to defendants' own accounts. The district court held that all but one of the schemes were impermissibly extraterritorial under either civil RICO, 18 U.S.C. 1964(c), or the mail, wire, and bank fraud statutes plaintiffs cited as predicates to the civil RICO cause of action. The district court found the remaining scheme, standing alone, did not constitute a pattern of racketeering activity under RICO. At issue was whether the conduct violating the predicate statutes was extraterritorial, the application of civil RICO to plaintiff's alleged injuries was extraterritorial, and whether the surviving schemes amounted to a pattern of racketeering activity.The Second Circuit held that each of the schemes to defraud, except for the Sham Management Fees Scheme, calls for domestic applications of 18 U.S.C. 1962(c), 1962(d), 1341, 1343, and 1344(2). The court also held that the district court abused its discretion by dismissing the state law claims for lack of supplemental jurisdiction. Therefore, the court reversed and remanded for further proceedings. View "Bascuñán v. Elsaca" on Justia Law

Plaintiffs founded ChinaWhys, which assists foreign companies doing business in China with American anti-bribery regulations compliance. Plaintiffs allege that the GSK Defendants engaged in bribery in China, with the approval of Reilly, the CEO of GSK China. In 2011, a whistleblower sent Chinese regulators correspondence accusing GSK of bribery. Defendants tried to uncover the whistleblower’s identity. Plaintiffs met with Reilly. According to Plaintiffs, GSK China representatives stated they believed Shi, a GSK China employee who had been fired, was orchestrating a “smear campaign.” ChinaWhys agreed to investigate Shi under an agreement to be governed by Chinese law, with all disputes subject to arbitration in China. Plaintiffs were arrested, convicted, imprisoned, and deported from China. Reilly was convicted of bribing physicians and was also imprisoned and deported. The Chinese government fined GSK $492 million for its bribery practices; GSK entered a settlement agreement with the U.S. SEC. Plaintiffs sued under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961–1968, contending that their business was “destroyed and their prospective business ventures eviscerated” as a result of Defendants’ misconduct. RICO creates a private right of action for a plaintiff injured in his business or property as a result of prohibited conduct; for racketeering activity committed abroad, section 1964(c)’s private right of action requires that the plaintiff “allege and prove a domestic injury to its business or property.” The Third Circuit held that Plaintiffs did not plead sufficient facts to establish that they suffered a domestic injury under section 1964(c). View "Humphrey v. GlaxoSmithKline PLC" on Justia Law

The government sought forfeiture (21 U.S.C. 881(a)(4),(6), (7); 18 U.S.C. 981) of bank accounts, real properties, vehicles, and $91,500 in U.S. currency, related to its investigation into Salouha and Sbeih. Salouha allegedly illegally sold prescription drugs through his Ohio pharmacies, 21 U.S.C. 841. Salouha and Sbeih allegedly laundered the receipts through their accounts, 18 U.S.C. 1956. Sbeih and his wife filed verified claims to seven of the personal bank accounts. Sbeih was indicted but failed to appear. The court issued an arrest warrant, lifted the stay on the civil forfeiture case and scheduled a status conference. Sbeih’s counsel sought permission for Sbeih not to attend, as he was in Israel. Sbeih alleged that he was in danger of losing his Jerusalem permanent residency permit if he left Israel. The court granted the motion. The government moved to strike Sbeih’s claim under the fugitive disentitlement statute, 28 U.S.C. 2466. The court waited to see whether the Salouhas, Sbeih’s codefendants, were able to reenter the country, but ultimately granted the government’s motion to strike Sbeih’s claim and ordered forfeiture. While section 2466 requires the government to prove that the claimants had a specific intent of avoiding criminal prosecution in deciding to remain outside the U.S., it does not require that that intent be the sole or principal intent. In this case, however, government did not meet its burden of proving that Sbeih was not returning to the U.S. to avoid prosecution View "United States v. $525,695.24" on Justia Law