Major FCPA Case in Jeopardy Because of Prosecutors’ Errors


In late June, U.S. District Court Judge Howard Matz of the Central District of California, the judge in the Foreign Corrupt Practices Act (FCPA) case against Lindsey Manufacturing Co. and two of its executives, invited both sides to submit briefs on the question of whether the defendants’ convictions should be dismissed. It had been revealed in post-verdict proceedings that the government violated a court order by failing to turn over portions of grand jury testimony from the FBI agent investigating the case.

On May 10, a jury convicted Lindsey Manufacturing; it’s CEO, Keith Lindsey; and its CFO, Steve Lee, on one count of conspiracy to violate the FCPA and five substantive FCPA violations. The case was based on allegations that the company, Lindsey, and Lee violated the FCPA by paying sales representative Grupo Internacional de Asesores SA to heap gifts and money on high-level executives of Comision Federal de Electricidad to get a contract with the state-owned Mexican utility company. Lindsey and Lee face a maximum of five years in prison if sentenced.

FBI Special Agent Susan Guernsey testified in front of two grand juries in the case: one that indicted Angela Aguilar, a director of Grupo Internacional de Asesores S.A., and a separate grand jury that indicted the company and the two executives. During cross-examination of Guernsey at trial, there was some suggestion that information that Guernsey provided to the grand jury may have been wrong and that certain key facts may have been omitted. The failure to turn over the testimony of Guernsey could have hindered the defense’s ability to fully cross-examine her during the trial.

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