The U.S. Court of Appeals for the Second Circuit recently reinstated the convictions of Hernán Lopez and Full Play Group, two defendants convicted in connection with the bribery scandal involving the Federation Internationale de Football Association (“FIFA”) and certain of its confederations.
In April 2020, the Department of Justice unsealed a 53-count superseding indictment that charged 16 individuals and one entity, including Lopez and Full Play Group. Lopez was a former executive at Fox International Channels, and Full Play Group was a sports marketing company. Both were charged with honest services fraud, conspiracy to commit honest services fraud, and conspiracy to commit money laundering for their involvement in the FIFA bribery scheme. In March 2023, a federal jury in the Eastern District of New York found Lopez and Full Play Group guilty of conspiracy to commit wire fraud and conspiracy to launder money in connection with the payment of bribes in exchange for lucrative broadcasting contracts (the DOJ ultimately did not proceed to trial on the substantive wire fraud counts). More specifically, Full Play was convicted of bribing the federation presidents of Paraguay, Bolivia, Colombia, Venezuela, Peru, and Ecuador, as well as Confederación Sudamericana de Fútbol (“CONMEBOL”) officials, one of FIFA’s six continental confederations, in connection with media rights contracts for the Copa América and Copa Libertadores tournaments, as well as World Cup qualifiers and friendlies. Lopez was alleged to have participated only in the bribery scheme related to the Copa Libertadores tournament, and he was convicted for such participation.
Upon a motion for a judgment of acquittal, in September 2023, the district court overturned the convictions of Lopez and Full Play Group, ruling that the honest services fraud statute did not extend to foreign commercial bribery cases. Because the wire fraud conspiracy and money laundering conspiracy charges were predicated upon honest services fraud, those convictions were overturned.
The Second Circuit disagreed, holding that the employer-employee relationship is a “well-recognized fiduciary relationship that falls within the scope” of the honest services fraud statute and that there was no exemption for foreign employees who owed a fiduciary duty to a foreign employer. The Second Circuit stated that a violation of local law was not necessary to establish a breach of a fiduciary duty. Instead, a breach of an employer’s code of conduct, such as the violation of FIFA’s and CONMEBOL’s codes of ethics, was sufficient.
Defendants had also argued that considerations of “international comity” weighted against interpreting the honest services fraud statute to cover their conduct. The Second Circuit, however, said there were already limitations on what schemes were covered by the statute so that “domestic wire transmissions” did not “haul essentially foreign allegedly fraudulent behavior into American courts,” namely the requirement that the use of the wires “must be essential, rather than merely incidental, to the scheme.” The Second Circuit also rejected defendants’ argument that the government had failed to prove a fiduciary duty. On the question of whether the government had failed to prove a conspiracy to deceive CONMEBOL, the Second Circuit remanded the question to the district court, which had not reached it given its earlier holding.
Second Circuit Decision | District Court – Memorandum and Order | DOJ Press Release – March 9, 2023 | Unsealed Superseding Indictment