FCPA Compliance and Ethics Blog

December 21, 2009

DOJ Goes for KO with Gerald Green Sentencing

In September, 2009 Gerald Green and his wife Patricia were convicted of Foreign Corrupt Practices Act (FCPA) violations. According to the DOJ Press Release, from 2002 through 2007, the Greens conspired with others to bribe the former governor of the Tourism Authority of Thailand (to the tune of $1.8MM) in order to land lucrative film festival contracts as well as other deals for the development of a Thai Privilege Card, and for a website, book, video, calendars, and public relations services. As reported in the FCPABlog on December 18, 2009, the Greens used different business entities, some with dummy addresses and telephone numbers, to hide how much they were receiving under the contracts. The jury found that Greens disguised the bribes as “sales commissions” and made the payments through foreign bank accounts of intermediaries in Singapore, the United Kingdom and Jersey, some in the name of the former governor’s daughter and a friend.

The Pre-Sentencing Report was filed on December 14, 2009 and now the Justice Department now wants Gerald Green, aged 76, sentenced to life in prison. In a December 14 court filing, prosecutors said although the pre-sentence report recommends a downward departure under the federal sentencing guidelines and a sentence of about 20 to 25 years, Green’s sentence should instead be enhanced. The DOJ alleged that Green was the ring leader of the bribery plot, the DOJ said, and he “repeatedly and blatantly perjured himself” at his trial.

Both the convictions of Gerald Green and his wife Patricia, coupled with the Government’s aggressive stance in sentencing make clear that ‘business as usual’ in overseas film work will no longer be tolerated. It should be noted that both convictions were not for “conscious avoidance” as with Frederick Bourke or conspiracy with no underlying action as with William Jefferson. The evidence in the Greens case was actual, old fashioned bribery.

The entertainment industry needs to understand that it can longer use agents/intermediaries to procure business. Further, formerly typical excessive gifts or lavish entertainment cannot be used to procure business. As many films are financed through overseas corporations for tax purposes, the potential of FCPA violations are substantially increased. In addition to the anti-bribery component of the FCPA, the Act also includes a books and records provision which requires that all payments must be properly accounted for and correctly classified. It can only be hoped that the entertainment industry sits up and takes notice that times indeed must change.

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