A recent federal decision has dealt a blow to the Department of Justice’s theory of accomplice liability under the Foreign Corrupt Practices Act (FCPA). In United States v. Hoskins, No. 3:12cr238, 2015 WL 4774918 (Aug. 13, 2015), the District Court for the District of Connecticut rejected the United States’ contention that nonresident foreign nationals may be prosecuted exclusively under an accomplice theory of criminal liability.

The United States had initially alleged that defendant Hoskins’s employer, Alstom Power, participated in a multiyear scheme of bribery of Indonesian officials in exchange for assistance in obtaining power contracts. After the company agreed to pay a fine in excess of $770 million, the United States brought criminal charges against Hoskins alleging that he participated in the illegal activity.

Hoskins was not a U.S. citizen, national, or resident, and the United States had no evidence that Hoskins committed any part of the criminal act within the United States. In the original indictment, the United States alleged that Hoskins was an agent of a domestic concern – a valid theory of liability under the FCPA. But the United States later removed that allegation from the indictment and alleged a new theory: that Hoskins faced “accomplice liability” for conspiring to commit the federal violations. In other words, the United States argued that, even if Hoskins was not an agent of a domestic concern, he could still be convicted on an accomplice theory of liability under United States v. Pinkerton or under the aiding and abetting statute. The United States apparently based its theory of liability on its own Resource Guide to the U.S. Foreign Corrupt Practices Act, a nonbinding advisory document that the Department of Justice and Securities and Exchange Commission jointly released in 2012 to provide guidance regarding FCPA enforcement. The Resource Guide specifically states that:

even if [the defendants] had never taken any actions in the territory of the United States, they can still be subject to jurisdiction under a traditional application of conspiracy law and may be subject to substantive FCPA charges under Pinkerton liability, namely, being liable for the reasonably foreseeable substantive FCPA crimes committed by a co-conspirator in furtherance of the conspiracy.

See page 12 of the Resource Guide.

Hoskins moved to dismiss the charge for lack of jurisdiction, arguing that, regardless of the Resource Guide’s position, the FCPA expressly excludes criminal liability for nonresident foreign nationals who are not agents of a domestic concern and who have not committed the alleged illegal acts within the United States. In other words, Hoskins argued that, by allowing criminal liability for foreign nationals who act as agents of domestic concerns or who commit illegal acts within the United States, Congress intended to exclude liability for foreign nationals who do not engage in these activities.

The district court agreed and dismissed the charge. The court relied on the Supreme Court’s holding in Gebardi v. United States, 287 U.S. 112, 53 S. Ct. 35, 77 L. Ed. 206 (1932) that, where Congress passes a substantive criminal statute that excludes a certain class of individuals from liability, the United States cannot evade congressional intent by charging those individuals with conspiring to violate the same statute. The district court further held that, because the text of the FCPA specifically identifies the classes of people subject to FCPA liability (including agents of domestic concerns and foreign nationals who commit criminal acts within the United States), the text of the statute evidences Congress’s intent not to extend accomplice liability to nonresident foreign nationals not otherwise subject to direct liability.

Although Hoskins still faces possible FCPA liability if the United States can establish that he was an agent of a domestic concern, this decision represents a significant loss for the United States. More importantly, it provides an important defense for nonresident foreign nationals facing prosecution under an accomplice theory of criminal liability.