August 22, 2022

Second Circuit upholds district court’s judgment of acquittal on Hoskins’s FCPA convictions

On August 12, 2022, the Second Circuit upheld a decision by the US District Court for the District of Connecticut granting Lawrence Hoskins’s motion for a judgment of acquittal following his conviction for violations of the Foreign Corrupt Practices Act.  The Second Circuit affirmed the district court’s ruling that there was no agency or employee relationship between Hoskins and Alstom Power, Inc. (API), the company accused of executing the bribery scheme.  The Second Circuit also rejected Hoskins’s appeal of the denial of his motion to dismiss the indictment on Speedy Trial Act and Sixth Amendment grounds, and his challenges to the jury instructions regarding withdrawal from a conspiracy and “venue for [the] four money-laundering counts.” 

Hoskins is a British citizen who was an employee of Alstom UK Ltd (a UK subsidiary of API) and who worked in Paris on an assignment to Alstom UK Ltd’s French subsidiary.  The Department of Justice accused Hoskins of violating the anti-bribery provisions of the FCPA through his participation in a scheme by which API, an American company, and other Alstom entities bribed Indonesian government officials in an effort to secure a $118 million contract to provide power-related services.  Because Hoskins did not commit any wrongful acts within the US, was not an American citizen, and did not work for an American company, any of which would have subjected Hoskins to the FCPA’s jurisdiction, the DOJ, in addition to arguing Hoskins was an agent of a domestic concern, also alleged that Hoskins was a co-conspirator or accomplice of API and thus was covered by the FCPA.  Prior to trial, the district court held that the FCPA did not extend to accomplices or co-conspirators who were not within one of the FCPA’s enumerated categories of covered persons.  The DOJ appealed, and the Second Circuit upheld the district court’s decision.  The Second Circuit did, however, allow the DOJ to proceed on the theory that Hoskins was acting as an agent of a domestic concern (API), a type of person explicitly covered by the FCPA.

In October 2019, a jury convicted Hoskins of six counts of violating the FCPA under the theory that he acted as an agent of API.  The jury also convicted him of one count of conspiracy to violate the FCPA, one count of conspiring to launder money, and three counts of money laundering.  He was acquitted on one money laundering count.  However, in February 2020, the district court entered judgment of acquittal on the FCPA-related convictions after finding insufficient evidence to prove that Hoskins was an agent of API as API lacked the necessary “control” over Hoskins.  In March 2020, Hoskins was sentenced to 15 months in prison and fined $30,000 for the money laundering-related convictions. 

The DOJ appealed the district court’s ruling that Hoskins had not acted as an agent of API and thus could not be convicted of FCPA-related charges.  The Second Circuit agreed with the lower court.  It found that although there was evidence that Hoskins “collaborated with and supported API” and an API executive, the DOJ had not established agency as it had failed to establish “key elements of agency, such as any indication that Hoskins had any authority to act on API’s behalf,” that “API could ‘revoke’ any authority it purportedly gave to Hoskins,” or that API could “even do anything to control Hoskins’s actions.” 

In the same decision, the Second Circuit denied Hoskins’s appeal in its entirety.  First, Hoskins argued that the District Court erred by denying his motion to dismiss the indictment for violations of the Speedy Trial Act and Speedy Trial Clause of the Sixth Amendment.  The Second Circuit held that the district court had issued a “short order making retroactive ends-of-justice findings” excusing substantial periods of delay.  The Second Circuit noted that, although it “disfavor[s] this practice and prefer[s] ‘contemporaneous finding[s] on the record,’” this order was sufficient under the Speedy Trial Act.  As to the Sixth Amendment claim, the Second Circuit found the district court did not abuse its discretion in denying  that claim, particularly as Hoskins was unable to point to any prejudice his defense suffered. 

Second, Hoskins argued that the jury instruction on withdrawal from a conspiracy constituted reversible error.  The Second Circuit disagreed, and upheld the district court’s instruction that a co-conspirator must take an “affirmative act to withdraw from a conspiracy,” and that, once a co-conspirator has set a conspiracy in motion, he must “undermine the conspiracy to withdraw from it.”  The Second Circuit also upheld the District Court’s use of illustrative examples of withdrawal in the jury instructions and that “withdrawal is not a defense to the substantive crime of aiding and abetting.” 

Third, Hoskins sought a jury instruction to the effect that the jury could not find venue appropriate in the District of Connecticut if “the movement of funds [alleged to be part of the money laundering] was in fact two or more separate transactions.”  The Second Circuit held that case law “explicitly states that a ‘multi-step plan to transfer money from one location to another should be viewed as a single transfer’” under the money laundering statute.    The Second Circuit then found that the testimony of an API employee that he “authorized payments originating in Connecticut that were ultimately to be used for bribes” was sufficient to establish venue in the District of Connecticut. 

Second Circuit Opinion