In the Courts

Fifth Circuit Rejects Bribery Convention As Bar to Prosecution

On Oct. 22, 2010, in United States v. Jeong, No. 09-11127, the Fifth Circuit affirmed the convictions of Gi-Hwan Jeong, a South Korean national, rejecting his appeal that his prosecution in the U.S., after prosecution and conviction in South Korea, was barred. He had invoked a provision of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Dec. 17, 1997, S. Treaty Doc. No. 105-433 (1988) (hereinafter the “Convention”).

In both his country and in the U.S., Jeong was accused of bribing U.S. officials as part of his company's efforts to secure and maintain a telecommunications contract with the Army and Air Force Exchange Service (AAFES). The latter, a joint military command of the Department of Defense, provides goods and services to U.S. military personnel and their families around the world. Jeong's company, Samsung Rental Company, Limited (SSRT), secured the contract after paying bribes to two AAFES employees. Even after securing the contract, Jeong continued to pay bribes to the AAFES employees, in exchange for their support of SSRT amid allegations of poor performance. Jeong's actions were uncovered after a former SSRT employee reported them to the South Korean office of the U.S. Air Force Office of Special Investigations (AFOSI).

In South Korea, Jeong was charged with violating a law prohibiting bribery of a foreign public official in connection with international trade. Upon his conviction in early 2008 by a Korean district court, a fine of 10 million South Korean won (approx. $10,500 at the time) was imposed. No further prison term was imposed after the court gave Jeong credit for serving 58 days of pretrial detention.

After his conviction in South Korea, the U.S. made a formal mutual legal assistance request. As part of its request, the U.S. noted its understanding that Jeong was convicted earlier this year of the offense of Interference with Foreign Trade in the Republic of Korea, and therefore, it is not seeking to further prosecute Jeong.” When Jeong arrived in the U.S. in November 2008 for what he believed was a meeting to discuss monies allegedly owed to another of his companies, he was arrested. By way of a superseding five-count indictment, Jeong faced one count of conspiracy under 18 U.S.C. ' 371, two counts of honest-services wire fraud under 18 U.S.C. ” 1343, 1346, and two counts of federal bribery under 18 U.S.C. ' 201(b)(1).

Before the district court, Jeong submitted a motion to dismiss the indictment that, after a May 2009 hearing, was denied. Jeong subsequently pled guilty to all five counts, while reserving the right to appeal the district court's denial of his motion to dismiss. The district court sentenced Jeong to 60-month concurrent terms of imprisonment for each of the five counts, along with a fine of $50,000.

Jeong raised two arguments on appeal before the Fifth Circuit. First, he argued, as he had before the district court, that the U.S. prosecution violated Article 4.3 of the Convention, which states: “When more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction for prosecution.” In the alternative, Jeong contended that his indictment should be invalidated, because the U.S. had, both expressly and impliedly, waived its jurisdiction to prosecute him.

In reviewing Jeong's first claim de novo, the Fifth Circuit found that Article 4.3 did not prohibit two signatory countries from prosecuting an individual for the same offense. Rather, the court held that the provision simply established the narrow instance when signatories were required to consult regarding jurisdiction. Further, the court noted that consultation was not even required in a situation like Jeong's, as neither signatory had requested consultation. The court continued its analysis, noting that, even if the countries had been required to consult, the Convention's language still did not limit prosecution to only one of the signatories, as Article 4.3's plain language did not require the countries to answer the jurisdictional question after consultation.

In assessing Jeong's claim that the U.S. had “waived its jurisdiction,” the Fifth Circuit noted that he had “fail[ed] to identify any source of domestic or international law that permit[ted] such a presumption.” As the court's research also could not produce any support, and it found that double jeopardy did not apply to prosecutions of the same offense by separate sovereigns, the court rejected Jeong's waiver claim as well.

Finally, after noting that the U.S. government “retains broad discretion as to whom to prosecute,” and that the court was similarly “ill-equipped to consider how the prosecution of a foreign national might, if at all, impact diplomatic relations between two countries,” the Fifth Circuit affirmed the district court's denial of Jeong's motion to dismiss the indictment.

In the Courts and Business Crimes Hotline were written by Matthew J. Alexander and Associate Editor Kenneth S. Clark, respectively. Both are associates at Kirkland & Ellis LLP, Washington, DC.

Fifth Circuit Rejects Bribery Convention As Bar to Prosecution

On Oct. 22, 2010, in United States v. Jeong, No. 09-11127, the Fifth Circuit affirmed the convictions of Gi-Hwan Jeong, a South Korean national, rejecting his appeal that his prosecution in the U.S., after prosecution and conviction in South Korea, was barred. He had invoked a provision of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Dec. 17, 1997, S. Treaty Doc. No. 105-433 (1988) (hereinafter the “Convention”).

In both his country and in the U.S., Jeong was accused of bribing U.S. officials as part of his company's efforts to secure and maintain a telecommunications contract with the Army and Air Force Exchange Service (AAFES). The latter, a joint military command of the Department of Defense, provides goods and services to U.S. military personnel and their families around the world. Jeong's company, Samsung Rental Company, Limited (SSRT), secured the contract after paying bribes to two AAFES employees. Even after securing the contract, Jeong continued to pay bribes to the AAFES employees, in exchange for their support of SSRT amid allegations of poor performance. Jeong's actions were uncovered after a former SSRT employee reported them to the South Korean office of the U.S. Air Force Office of Special Investigations (AFOSI).

In South Korea, Jeong was charged with violating a law prohibiting bribery of a foreign public official in connection with international trade. Upon his conviction in early 2008 by a Korean district court, a fine of 10 million South Korean won (approx. $10,500 at the time) was imposed. No further prison term was imposed after the court gave Jeong credit for serving 58 days of pretrial detention.

After his conviction in South Korea, the U.S. made a formal mutual legal assistance request. As part of its request, the U.S. noted its understanding that Jeong was convicted earlier this year of the offense of Interference with Foreign Trade in the Republic of Korea, and therefore, it is not seeking to further prosecute Jeong.” When Jeong arrived in the U.S. in November 2008 for what he believed was a meeting to discuss monies allegedly owed to another of his companies, he was arrested. By way of a superseding five-count indictment, Jeong faced one count of conspiracy under 18 U.S.C. ' 371, two counts of honest-services wire fraud under 18 U.S.C. ” 1343, 1346, and two counts of federal bribery under 18 U.S.C. ' 201(b)(1).

Before the district court, Jeong submitted a motion to dismiss the indictment that, after a May 2009 hearing, was denied. Jeong subsequently pled guilty to all five counts, while reserving the right to appeal the district court's denial of his motion to dismiss. The district court sentenced Jeong to 60-month concurrent terms of imprisonment for each of the five counts, along with a fine of $50,000.

Jeong raised two arguments on appeal before the Fifth Circuit. First, he argued, as he had before the district court, that the U.S. prosecution violated Article 4.3 of the Convention, which states: “When more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction for prosecution.” In the alternative, Jeong contended that his indictment should be invalidated, because the U.S. had, both expressly and impliedly, waived its jurisdiction to prosecute him.

In reviewing Jeong's first claim de novo, the Fifth Circuit found that Article 4.3 did not prohibit two signatory countries from prosecuting an individual for the same offense. Rather, the court held that the provision simply established the narrow instance when signatories were required to consult regarding jurisdiction. Further, the court noted that consultation was not even required in a situation like Jeong's, as neither signatory had requested consultation. The court continued its analysis, noting that, even if the countries had been required to consult, the Convention's language still did not limit prosecution to only one of the signatories, as Article 4.3's plain language did not require the countries to answer the jurisdictional question after consultation.

In assessing Jeong's claim that the U.S. had “waived its jurisdiction,” the Fifth Circuit noted that he had “fail[ed] to identify any source of domestic or international law that permit[ted] such a presumption.” As the court's research also could not produce any support, and it found that double jeopardy did not apply to prosecutions of the same offense by separate sovereigns, the court rejected Jeong's waiver claim as well.

Finally, after noting that the U.S. government “retains broad discretion as to whom to prosecute,” and that the court was similarly “ill-equipped to consider how the prosecution of a foreign national might, if at all, impact diplomatic relations between two countries,” the Fifth Circuit affirmed the district court's denial of Jeong's motion to dismiss the indictment.

In the Courts and Business Crimes Hotline were written by Matthew J. Alexander and Associate Editor Kenneth S. Clark, respectively. Both are associates at Kirkland & Ellis LLP, Washington, DC.