On December 2, 2019, a jury in the Eastern District of New York acquitted Jean Boustani, a Lebanese citizen who is alleged to have been a key player in coordinating more than $200 million in bribe and kickback payments to Mozambican government officials and investment bankers in order to ensure that certain maritime projects went forward. Boustani’s acquittal highlights some of the limits on the government’s ability to prosecute foreign actors for corruption and money laundering-related crimes under US law.
In June 2019, Boustani sought to dismiss the indictment against him, which charged him with conspiracy to commit wire fraud, money laundering and securities fraud. See Legal Alert: Governmental Overreach or Proper Jurisdiction-Defendant Seeks Dismissal of Charges by Arguing Lack of Requisite Nexus to the United States. Boustani’s motion to dismiss centered on the argument that the government could not demonstrate that Boustani’s alleged actions had the relevant nexus to the United States necessary to bring charges under the federal criminal statutes at issue. Though the Court denied Boustani’s motion to dismiss the indictment, one of the central defense themes at trial appears to have been Boustani’s lack of ties and connection to the United States. That theme, ultimately, seems to have carried the day for their client.
During the approximately six-week trial, Boustani took the stand in his own defense. Over the course of his testimony, which spanned for three days, he acknowledged that he arranged to pay a Mozambican agent and a Credit Suisse banker, Andrew Pearse, millions of dollars. Boustani nevertheless steadfastly maintained that such payments were not bribes or kickbacks. Although prosecutors introduced emails in which Boustani was requesting or offering payments in connection with the alleged scheme, Boustani testified that the payments made were merely “success fees” for access to Mozambican officials to win business for Privinvest, the entity for which Boustani worked as a salesman and which secured the loans from the relevant banks, Credit Suisse Group AG (Credit Suisse) and Russian Bank VTB.
Prosecutors alleged that Credit Suisse sold parts of the loans to investors, some of whom were in the United States, by misrepresenting that the funds would aid Mozambican-owned entities in undertaking the maritime projects. Prosecutors portrayed Boustani as a central player in defrauding US investors by helping organize and conceal bribes for loans sold to United States citizens in New York and Los Angeles. Boustani testified that though he paid officials, he had no role in packaging the loans to the allegedly defrauded investors. Boustani’s counsel argued that Boustani did not have any knowledge that money paid via a Middle Eastern bank would go through the United States. Boustani’s counsel also told the jury, in his opening statement, that the United States “was not the world’s policeman.”
In interviews conducted by the media, after the verdict came down, three jurors stated that the verdict hinged on venue because jurors did not understand how federal prosecutors in Brooklyn had the authority to prosecute crimes that had not occurred in their jurisdiction. Prosecutors had argued that venue was proper because some of the bribes had passed through the US financial system via correspondent banks, including through correspondent bank accounts in Brooklyn. They further argued that even transactions with banks in Manhattan created venue, because of the contiguous waterways the Eastern District shares with the Southern District.
While prosecutors often make similar venue arguments with success, the arguments were not enough for the jurors in the Boustani case. It may be that the jurors were also swayed by the defense’s argument that US charges should not have been brought against Boustani, who worked for Abu Dhabi-based Privinvest, and who had never set foot in the United States before he was arrested.
The jury deliberated for only approximately five hours before issuing their verdict. The outcome of this complex and highly watched trial has dealt a blow to prosecutors, particularly because venue is not routinely the deciding basis in prosecutions.
What is clear is that the Boustani verdict has called into question the extraterritorial reach of statutes designed to combat financial crimes. It remains to be seen how prosecutors will reassess their tactics, in light of the Boustani verdict, when bringing future actions alleging that foreign actors have engaged in illicit financial conduct in the United States, and whether prosecutors will look for more extensive US ties than they have looked for in the recent past.
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