Foreign corrupt practices act

• Pages: 48-55

48 Volume 20, July–September 2014 international law update

© 2014 International Law Group, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com

FOREIGN CORRUPT

PRACTICES ACT

E C 

“”   FCPA 

       

    ; 

  ’  

 -  -

    

      

“”

Terra Telecommunications Corp. (Terra),

a Florida company that purchased phone time

from foreign vendors and resold the minutes to

customers in the United States, contracted in

2001 with Telecommunications D’Haiti, S.A.M.

(Teleco) to buy minutes from Teleco directly.

Mr. Joel Esquenazi, Terra’s majority owner,

served as President and Chief Executive Ocer.

Mr. Carlos Rodriguez, the company’s minority

owner, served as Executive Vice President of

Operations. James Dickey served as Terra’s general

counsel and Antonio Perez as the company’s

comptroller.

e relationship of Teleco to the Haitian

government was at issue in this case and the

government presented evidence of Teleco’s ties

to Haiti. Among other witnesses testifying on

Teleco’s ownership by Haiti, an expert witness,

Luis Gary Lissade, testied regarding Teleco’s

history. As per Mr. Lissade’s testimony at Teleco’s

formation in 1968, the Haitian government gave

the company a monopoly on telecommunication

service; a signicant tax advantage and the

government appointed two members of the board

of directors while the President appointed the

Director General. In the early 1970s, the National

Bank of Haiti gained 97 percent ownership of

Teleco. From that time forward, the Haitian

President appointed all of Teleco’s board members.

When the National Bank of Haiti split into two

separate entities, one of which was the Banque

de la Republique d`Haiti (BRH), BRH retained

ownership of Teleco. In Mr. Lissade’s expert

opinion, for the years relevant to this case, Teleco

belonged “totally to the state” and “was considered

. . . a public entity.” He explained that the anti-

corruption law of 2008 cited Teleco as “public

administration” and required its agents to declare

all assets to avoid secret bribes. Ultimately, Haiti

privatized Teleco between 2009 and 2010.

At the time Terra contracted with Teleco,

Teleco’s Director General was Patrick Joseph

(appointed by then-President Jean-Bertrand

Aristide), and the Director of International

Relations was Robert Antoine.

By October 2001, Terra owed Teleco over

$400,000. At the request of Mr. Esquenazi,

Mr. Perez met with Mr. Antoine to negotiate

an amortization deal or, alternatively, to oer a

side payment. Mr. Antoine rejected the idea of

amortization but agreed to a side payment to ease

Terra’s debt. e deal, according to Mr. Perez, was

that Mr. Antoine would shave minutes from Terra’s

bills to Teleco in exchange for receiving from Terra

fty percent of what the company saved. Mr.

Antoine suggested that Terra disguise the payments

by making them to sham companies. In November

2001, Terra began funneling personal payments to

Mr. Antoine using the following subterfuge. Mr.

Dickey, on Terra’s behalf, drafted a “consulting

agreement” between Terra and a company Mr.

Antoine had suggested called J.D. Locator. J.D.

Locator, an otherwise insolvent company, was

owned by Mr. Antoine’s friend Juan Diaz. During

the course of the next several months, Messrs.

Rodriguez and Esquenazi authorized payments

to J.D. Locator via “check requests,” forms Terra

used to write checks without invoices. Mr. Diaz

retained ten percent of the funds Terra paid J.D.

Locator and disbursed the remainder, usually

either to Mr. Antoine or his business associate Mr.

Fourcand. While Mr. Antoine remained at Teleco,

Terra paid him and his associates approximately