June 25, 2019

Federal court in Illinois declines to follow Hoskins, dismisses challenges to FCPA jurisdiction

On June 21, 2019, the US District Court for the Northern District of Illinois denied a motion to dismiss by Dmitry Firtash and Andras Knopp, who in 2013 were charged—along with four co-conspirators—with conspiracy to violate the Foreign Corrupt Practices Act, as well as with racketeering, money laundering, and Travel Act violations.  The defendants, who do not reside in and have not visited the United States, were charged with conspiring to bribe Indian government officials to obtain licenses to mine titanium.  They intended to sell the titanium to a Chicago-based company.  

In making their motion to dismiss, Firtash and Knopp relied on the Second Circuit’s 2018 holding in United States v. Hoskins, 902 F. 3rd 69 (2d Cir. 2018).  In Hoskins, the Second Circuit had reviewed the FCPA’s legislative history and the general presumption against extraterritoriality and held that the DOJ could not charge foreign nationals who had not acted in the US with conspiracy under the FCPA, unless those persons had acted as “agents, employees, officers, directors, or shareholders of an American issuer or domestic concern.”
This court explicitly rejected Hoskins’ reliance on legislative history as inconsistent with Seventh Circuit precedent, and instead held that foreign nationals such as Firtash and Knopp did not need to meet the jurisdictional requirements for primary liability under the FCPA in order to be convicted on conspiracy charges.  The court acknowledged that the Seventh Circuit cases had not addressed the extraterritoriality considerations raised in Hoskins, but stated that “[a]bsent binding precedent,” it was not willing to disregard otherwise clear guidance from the Seventh Circuit, and so denied the motion to dismiss.
The court also rejected defendants’ arguments to dismiss for lack of venue, failure to state a racketeering offense, and lack of due process.