Dooney & Bribe: FCPA Conviction for Bourke
Co-founder of the famous Dooney & Bourke line of handbags and accessories Frederic Bourke was found guilty of conspiracy to violate the Foreign Corrupt Practices Act. The case revolved around investments to buy the state owned oil company of Azebaijan.
The Foreign Corrupt Practices Act makes it illegal for individuals or companies to bribe foreign government officials in order to obtain or keep business.
Before his recent trial, Frederic Bourke was famous for Dooney & Bourke all-weather leather handbags. Now he'll be cited for years by lawyers fighting cases of international corporate corruption.
As detailed in a press release from the Department of Justice, evidence at trial established that Bourke knowingly participated in a scheme to purchase the State Oil Company of the Azerbaijan Republic on the cheap.
Bourke was found guilty of conspiring with fugitive Czech financier Viktor Kozeny ("the Pirate of Prague") to pay millions in bribes to Azeri officials in exchange for their privatizing the state oil company and selling it to Kozney, Bourke and their consortium in a rigged bid.
As noted on the FCPA Blog, what makes Bourke's case special is that he did not make the bribes himself (or though his own company). Prosecutors argued, rather, that he stuck his head in the sand. According to the prosecution's case (and the jury's verdict) Bourke was guilty because he invested in an offshore venture in which he knew bribes were being paid.
He was also found guilty of making false statements to the FBI. He was acquitted on money laundering charges.
Bourke faces up to 10 years in prison and a fine of up to $500,000.
In the end, Kozeny never secured the purchase of the oil company. Azeri official changed their minds about privatizing it.
US prosecutors have also charged Kozeny, but he's fighing extradition from the Bahamas. According to Bloomberg, he admits to bribing the Azeri officials, but denies stealing from investors and claims other investors knew the bribes were being paid.
Lawyers for Bourke claim Kozeny made off with $180 million of investors' money.
- Lay-Person's Guide to Foreign Corrupt Practices Act (US DOJ)
- Study: Business Risk of Fraud Up Amid Economic Crisis (Computer World)
- KBR and Halliburton Settle with SEC over FCPA Violations (US SEC, Feb., 2009))
- Conspiracy (FindLaw)
- Criminal Defense Overview (provided by James D. Garrett & Associates, P.C.)
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