United States v. Bodmer
342 F. Supp. 2d 176 (2004)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under the rule of lenity, a criminal statute must be construed in favor of the defendant when its text, legislative history, and judicial precedent fail to provide fair notice that the alleged conduct is criminally proscribed. Prior to its 1998 amendments, the Foreign Corrupt Practices Act (FCPA) was ambiguous as to whether its criminal penalties applied to a non-resident foreign national acting as an agent of a domestic concern.
Facts:
- In 1997, the Republic of Azerbaijan began privatizing its State Oil Company (SOCAR).
- Foreigners seeking to invest were required to purchase privatization vouchers and options from Azerbaijan's State Property Committee (SPC).
- Two U.S. companies, Omega Advisors, Inc. and Pharos Capital Management, L.P. ('domestic concerns' under the FCPA), invested over $150 million to acquire a controlling interest in SOCAR.
- Hans Bodmer, a Swiss national and lawyer, represented these U.S. companies and their affiliates, acting as their agent.
- From 1997 to 1999, Bodmer allegedly paid and authorized the payment of bribes to senior Azerbaijani government officials to ensure the investment consortium could acquire SOCAR.
- Bodmer allegedly used offshore shell companies, his Swiss law firm's client accounts, and international wire transfers to facilitate the bribery scheme.
Procedural Posture:
- The United States government filed a sealed indictment against Hans Bodmer in the U.S. District Court for the Southern District of New York.
- Bodmer, a Swiss national, was arrested in South Korea based on the U.S. indictment.
- After being incarcerated in South Korea for five months, Bodmer was extradited to the United States.
- In the U.S. District Court, Bodmer filed a motion to dismiss the indictment, arguing that the FCPA's criminal provisions did not apply to him.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the criminal penalty provision of the pre-1998 Foreign Corrupt Practices Act (FCPA), which applies to an agent of a domestic concern who is 'otherwise subject to the jurisdiction of the United States,' cover a non-resident foreign national who was not physically present in the U.S. during the alleged acts?
Opinions:
Majority - Scheindlin, District Judge.
No. The pre-1998 FCPA did not provide fair notice that its criminal penalties applied to a non-resident foreign national acting as an agent of a domestic concern. The statutory language 'otherwise subject to the jurisdiction of the United States' is ambiguous, as it is a technical legal term with no ordinary, common-sense meaning. Neither standard canons of statutory construction nor the original 1977 legislative history clarifies Congress's intent. Critically, the legislative history of the 1998 amendments to the FCPA reveals that Congress believed the prior version of the statute subjected foreign national agents only to civil, not criminal, penalties. The Department of Justice itself expressed this same view in 1998. With no prior judicial decisions interpreting this provision, the statute failed to provide fair notice to Bodmer that his conduct was subject to U.S. criminal sanctions. Therefore, the rule of lenity, which requires resolving ambiguity in a criminal statute in favor of the defendant, mandates the dismissal of the FCPA conspiracy charge. However, the money laundering charge stands, as immunity from the FCPA's criminal penalties does not confer immunity from the separate crime of money laundering, which has its own explicit extraterritorial jurisdiction provisions.
Analysis:
This decision is a significant application of the rule of lenity, underscoring the due process requirement that criminal statutes must provide clear and fair warning of what conduct is prohibited. It demonstrates how legislative history from subsequent amendments can be persuasive in interpreting the ambiguity of an earlier statute. The case exposed a major jurisdictional gap in the original FCPA, which had allowed foreign agents of U.S. companies to escape criminal liability for bribery committed abroad, a loophole Congress explicitly closed with the 1998 amendments. This ruling clarifies that even if a defendant is immune from prosecution for an underlying offense, they can still be prosecuted for separate crimes, like money laundering, committed in furtherance of that offense.
Unlock the full brief for United States v. Bodmer