A guest post today from Eric Bruce, Matthew Menchel and David McGill.  The authors were all trial counsel during the first “Africa Sting” trial in the United States District Court for the District of Columbia.  Bruce and Menchel are partners at Kobre & Kim LLP and lead their Washington, DC and Miami offices respectively and McGill is an associate in the firm’s New York office.
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Inside The “Africa Sting” Trial:  Anatomy Of A Failed Prosecution
Many media outlets and commentators have dedicated a great deal of attention to the DOJ’s decision to abandon its prosecution of 22 executives from the military products industry for alleged FCPA and money laundering violations arising from a first-of-its-kind sting operation that included an FBI agent posing as a representative of the minister of defense for the West African nation of Gabon.  And rightfully so—after all, it is not every day that the DOJ chooses to walk away from a major investment of investigative and prosecutorial resources, as well as 22 indictments, let alone in a high-profile context such as the “Africa Sting” case.  But for those on the front lines of the trial, the DOJ’s extraordinary decision to retreat from this case was the culmination of a long-running tactical chess match between the government and defense counsel that began long before the first witness was sworn in.
From our perspective as defense counsel for Pankesh Patel, a U.K. citizen who went to trial in the opening trial of the “Africa Sting” case, there were two especially critical developments that shaped the outcome of the first trial and contributed mightily to the DOJ’s failed prosecution efforts: (1) the Court’s pre-trial ruling on the admissibility of alleged evidence of prior bad acts; and (2) our unusual decision to call the government’s lead case agent as the sole defense witness in our case-in-chief.
The 404(b) Rulings
As the saying goes, every battle is won or lost before it is ever fought.  And this case was no exception.  After reviewing the documents and recordings evidence produced by the government before trial, it became immediately clear to us that the legal fight over the admissibility of alleged “prior bad acts” evidence would have an enormous impact on the trial.
The government argued that its vast collection of alleged prior bad acts evidence should be admitted under Federal Rule of Evidence 404(b) as evidence of the defendants’ knowledge and intent.  Alternatively, the government argued that if any of the defendants asserted an entrapment defense (given that the charges arose from a sting operation), the same prior bad acts evidence should be admissible to show that the defendants were predisposed to commit FCPA violations.
The government, however, exercised almost no restraint in the type and quantity of evidence they sought to admit under Rule 404(b).  In their Rule 404(b) Notice, the government sought to admit evidence of an additional seven allegedly corrupt deals against the four defendants in the first trial.  Seeking to admit such a wide range of prior bad acts evidence pertaining to deals outside the U.S. was, in our view, a strategic misstep by the government.  This scattershot approach by the government bolstered our argument that the evidence should be excluded under Rule 403 because admitting the evidence would risk transforming an already-complex, multi-defendant trial into a divergent series of mini-trials involving witnesses and events from all over the globe.
Moreover, because our client, Mr. Patel, was a U.K. citizen operating a small U.K. company who had not done any prior deals in the United States, we also advanced some unique arguments that further highlighted the prejudice and confusion that would have arisen if the alleged prior bad acts evidence was admitted.  For example, we argued that evidence concerning allegedly corrupt conduct by a U.K. citizen in Nicaragua, if true, might violate U.K. law or Nicaraguan law, but it could not possibly demonstrate our client’s intent or predisposition to violate U.S. law, let alone the FCPA in particular, where that alleged conduct had no connection to the United States and our client was not even a U.S. citizen.
Ultimately, the Court agreed with our arguments and denied the government’s motion to admit the alleged prior bad acts evidence, largely under a Rule 403 analysis.  Having succeeded in substantially narrowing the scope of trial, our next challenge was to make the flaws in the government’s sting operation the focus of trial.
The “Commission Sandwich”
As former federal prosecutors, we were familiar with the DOJ’s guidelines pertaining to undercover operations and, more specifically, the requirement that the illegality of the deal be made reasonably clear to the targets of an investigation.  In this case, we believed there were significant problems with the manner in which the government ran the sting operation—most notably, its reliance on the cooperating witness, Richard Bistrong, to make strategic decisions about the operation and how to explain the illegality of the Gabon deal in various meetings with the defendants.  Further, instead of allowing Bistrong’s importance in the operation to gradually recede as an FBI undercover assumed greater responsibility, as is traditionally the case with sting operations, the government made the critical mistake of allowing Bistrong to “call the shots” and make key investigative decisions throughout the entire investigation.
For example, at Bistrong’s suggestion, the government chose to describe the allegedly corrupt payment to the Gabonese Minister of Defense as a “commission” when speaking with the defendants, instead of using any number of words that would have more clearly connoted its supposed illegality – e.g., bribe, kickback, payoff, “butter up,” “grease,” etc.  Worse yet, having chosen an innocuous word for the payment, the government—again, at Bistrong’s urging—intentionally buried the commission reference between perfectly legitimate discussion about other aspects of the transaction, thereby further increasing the chances that a target would miss it.  Bistrong even came up with a catch phrase for this technique—he called it the “commission sandwich.”  In a text message that Bistrong sent to the lead FBI case agent explaining his approach, Bistrong proudly explained “I just think its important to sandwhich [sic] the commission statement.”
Naturally, the “commission sandwich” and the way in which the FBI let a highly-incentivized informant orchestrate the sting operation were important themes we wanted to weave into our defense.  But resolving the tactical question of how to bring the “commission sandwich” and other serious flaws in the sting operation to light at trial ultimately required a bold stroke.
Calling the Lead Case Agent
In the weeks leading up to trial, we became convinced that, as a matter of trial strategy, the government would not call its star cooperating witness, Richard Bistrong, to the witness stand.  It was not simply that Bistrong had a lot of “baggage,” though the sheer amount of it – including corruption, false statements, habitual drug use, and frequenting prostitutes – was staggering.  Rather, it was Bistrong’s conduct during the sting operation itself, including lying to defendants about the legality or illegality of the deal and discouraging them from seeking legal advice, that led us to conclude that the government would leave Bistrong on the sidelines.  After all, the government already had tape recordings of all of the calls and meetings involving the defendants’ discussions with Bistrong and the undercover agents.  So why risk putting him on the stand?
When the government filed a series of motions on the eve of trial seeking to preclude the defense from, among other things, impeaching non-testifying witnesses; making missing witness arguments; attacking the legitimacy of the government’s undercover techniques; and making use of recordings not otherwise introduced by the government, our hunch was proven correct.  Not only that, but it had also become clear to us that the government intended to go even farther and would not call its own lead case agent, FBI Special Agent Christopher Forvour, as a witness.  By avoiding Bistrong and Agent Forvour, the government’ s strategy, it seemed to us, was to present a sanitized version of the sting operation through witnesses who were several steps removed from the operational decisions, thereby leaving us with little room to bring out evidence of the investigation’s shortcomings.
To countermand this strategy, we asked the government witnesses who were called as witnesses a series of questions about strategic decisions relating to the sting operation.  If the answer was “I don’t know,” the next question was always “Well, who would know?”  The answer was always the same:  Agent Forvour.  We took this approach for two reasons.  First, we thought this strategy would at least raise questions in the minds of the jurors as to why the government never called its lead case agent, who was present at counsel’s table for the entire trial.  Second, it set the stage for us to possibly call Agent Forvour as a witness in our defense case to get answers to questions that everyone in the courtroom was now curious about.
Ultimately, after a lot of internal debate amongst the trial team, we made the very unusual decision to call the lead case agent in our case-in-chief.  It was not a decision without risks.  Calling a professional witness over whom you have no control and who does not want to help you, without knowing what he will say, can easily backfire.  Nevertheless, because the government had largely succeeded to that point in limiting the trial evidence to tape recordings admitted through witnesses who had no role in directing the investigation, we felt the jury lacked a clear understanding of the serious problems underlying the government’s investigation.
In the end, the strategy worked.  Through Agent Forvour, we were able to demonstrate the major flaws in the government’s investigation and demonstrate just how much Bistrong, as opposed to the FBI, was in charge of key operational decisions and scripting what words would be used to describe the unlawful payments to the defendants during the sting.  In the process, we believe that we came across as truth-seekers (a critical element to any advocate’s credibility), shedding light on all the things that the government had strived to keep from the jury.  The momentum of the entire case swung in our direction during that examination.  It was truly a game-changing decision.
While the net result of the first trial was a deadlocked jury and a mistrial, our ability to capitalize on the government’s avoidance of its two key witnesses worked well enough that the government changed its trial strategy 180 degrees and decided to call both Bistrong and Agent Forvour in the second trial.  But because we succeeded in locking the government into positions that were developed during the first trial, it fared no better the second time around.  The second trial also ended in a series of mistrials and acquittals and, thereafter, the government decided to end this failed prosecution, dismissing all remaining charges against all 22 defendants.
The Future of FCPA Enforcement
While it remains to be seen exactly how the DOJ’s failed prosecution of the “Africa Sting” case will impact future enforcement efforts, this sort of high-profile setback will undoubtedly impact the way in which the DOJ and the FBI conducts their investigations and evaluates their cases for prosecution.  At the same time, we expect that companies and individuals who find themselves as targets of FCPA enforcement efforts will become increasingly aggressive in resisting the Department’s interpretation of the statute, which had gone largely unchallenged in the years preceding the “Africa Sting” trial.