A status conference in U.S. v. Weissman before Judge Barbara S. Jones in New York City has been scheduled for January 3.
Entries in Joshua Cantor (6)
Last week Canadian authorities said they've charged Nazir Karigar, a Canadian citizen, with violating the Corruption of Foreign Public Officials Act. He allegedly bribed an Indian official to win a contract for his company.
According to the Globe, Karigar worked for Cryptometrics of Ottawa. The company develops facial recognition software for airports and governments around the globe and its "engineers are accustomed to dealing with the security industry."
Is the security aspect of the case important? It could be.
Karigar is the first individual charged under the Corruption of Foreign Public Officials Act. He can't be the first Canadian involved in bribery abroad. Was he charged because his alleged crime compromised airport security in India, a country with security problems that concern the rest of the world?
The White House this year said overseas corruption is "a severe impediment to development and global security." We've reported that Kenyan airport and border security contracts were allegedly tainted by corruption. That led the U.S. to bar entry of some Kenyan officials and the U.K. did likewise. (President Obama went to Kenya in 2006 and talked about the sleaze there.)
The Australian federal police are investigating Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia. The case has security implications. There have been persistent rumors that Securency paid bribes and offered favors to win currency-printing contracts in Asia, Africa and Latin America. The integrity of any country's printed money supply is a global concern.
An older U.S. case with security-related loose ends involves American Bank Note Holographics. It prints currencies, travelers and other checks, and produces credit cards and holograms for use on security-sensitive surfaces. In July 2001, Joshua Cantor, the company's president, pleaded guilty to a four-count federal criminal information. It charged him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the FCPA. The charges arose from bribes paid on behalf of American Bank Note in Saudi Arabia. Then in August 2003, Morris Weissman, the former CEO and chairman of the company, was convicted of fraud after a long trial in Manhattan.
Neither Cantor nor Weissman have been sentenced yet, despite a nine-year-old guilty plea and a seven-year-old jury-trial conviction. Is it because of their knowledge of the security-related industry? Have they been helping American and other authorities track down corruption that might make borders leaky and put currencies at risk?
There may not be any visible links among Cantor and Weissman, Securency, Kenyan graft, and Nazir Karigar. But there's a common thread of global security running through them.
On August 6, 2003, Morris Weissman, the former CEO and chairman of American Bank Note Holographics, Inc., was found guilty by a federal jury in Manhattan. After a five week trial and a day and a half of deliberations, Wiessman, who was then 62, was convicted of a massive accounting fraud in the 1998 IPO of his company's stock.
He'd lied about the company's performance, inflating the numbers to pump up the IPO price, and lied to the auditors to hide it. The IPO raised $115 million. When the fraud was discovered, the stock plunged 80% in two days -- from $16 to $1.80 -- wiping out more than $100 million in shareholder valued.
The high flyer from Palm Beach was found guilty on four counts of conspiracy, securities fraud, falsifying corporate books and records (an FCPA accounting offense), and lying to independent auditors. He faced up to 30 years in prison, a fine of $1 million or more, and mandatory restitution.
One of Weissman's co-conspirators, Joshua Cantor, had previously pleaded guilty for his role in the fraud and for bribing foreign officials. We talked about Cantor last week. As we said, the company's business was producing currencies, travelers and other checks, credit cards, and holograms for use on security-sensitive surfaces.
Sentencing for Weissman was set for November 13, 2003. Meanwhile, he was freed on $250,000 bail.
Fast forward to 2010. Weissman, now nearing 70 and living in New York, is still free on personal recognizance bond. He's arguing against a long prison term, citing his service to society, his age and medical problems (vascular and cardio-vascular disease), his relatively small role in the crimes, and the amount of damage caused (his former company was acquired by a bigger company a couple of years ago).
The prosecutors see it differently. They want a long sentence. Weissman had the same medical conditions when he committed the crimes, he was the ringleader, they assert, and based on the number of victims and their losses (1,778 authorized claimants who lost around $79 million), the federal guidelines say he could be locked up for life. So 30 years is still the right number.
In their latest argument filed a year ago, prosecutors said:
The government acknowledges that the defendant's life is not defined by his crimes alone. The government does not contest the defendant's claim that he possesses certain positive attributes, has a loving family and caring circle of friends, and has contributed to society in certain ways. However, the government would also note that, in comparison with many defendants that appear before this Court, the defendant has had significant advantages and opportunities in life. The defendant graduated from college and law school, worked as an attorney for several years, and was employed by a number of real estates finance firms. In addition, the defendant has held high level positions at American Banknote Corporation and its predecessor since 1975. The defendant's business and social circles have included Presidents, Senators, and high level corporate executives.
In addition to a long jail sentence, prosecutors want a restitution order against Weissman of $64 million. (They say shareholders lost $79 million and recovered $14 million through a class action suit.)
Judge Barbara S. Jones last fixed sentencing for July 1, 2009. It didn't happen then and she hasn't set a new date.
Download the government's June 2, 2009 sentencing memorandum in U.S. v. Morris Weissman, in the U.S. District Court for the Southern District of New York (Foley Square), Criminal Case #: 1:01-cr-00529-BSJ-1, part 1 here and part 2 here.
Special thanks to several readers who asked about Morris Weissman, and to a reader who provided some documents used to prepare this post.
In July 2001, the president of American Bank Note Holographics pleaded guilty to a four-count federal criminal information. It charged him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the FCPA. The charges arose from bribes paid on behalf of American Bank Note in Saudi Arabia.
Joshua Cantor was scheduled to be sentenced in 2003. Bail was set at $250,000 and he was ordered to surrender his "travel documents and other international travel papers."
Cantor wasn't sentenced in 2003. According to the court docket (available here), sentencing was postponed a couple of times. The last date the court set was December 6, 2006. Sentencing didn't happen then, however, and no new date was ever set. So nearly nine years after pleading guilty to four bribery-related felonies, Cantor is out on bail without a sentencing date.
What's life been like for him? Apparently normal. He travels a lot. Since 2003, the court has approved trips to Puerto Rico and Israel (twice each), Brazil, Canada, the British Virgin Islands, Spain, the Dominican Republic and Barbados. Presumably the trips are for business.
Meanwhile, according to the court docket, most of which is sealed, the case has been dormant for two years, with no new activity reported to the public.
What's up with this case? Has Cantor slipped through the cracks in the federal criminal justice system? Or does his special treatment mean he's somehow helping the government? Is he a cooperating witness in related bribery investigations?
There have been persistent rumors that Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia, paid bribes and offered favors to win contracts in Asia, Africa and Latin America. Last month we heard unconfirmed reports about Australian federal police visiting Washington to meet with the DOJ's FCPA team. Was a chat with Joshua Cantor, who's from the same industry as Securency, on the agenda?
U.S. v. Cantor was filed on July 17, 2001 in the U.S. District Court, United States District Court for the Southern District of New York (Foley Square), Criminal Docket #: 1:01-cr-00687-BSJ-1. The case is currently assigned to Judge Barbara S. Jones.
Let's update the list of individuals waiting to be sentenced for violating or conspiring to violate the Foreign Corrupt Practices Act. Since October, Frederic Bourke and William Jefferson have been sentenced and come off the list. Charles Jumet, Paul Novak, and Fernando Maya Basurto have entered guilty pleas are are added to it. Juan Diaz was to be sentenced on November 13 but the court reset his date. A reader also let us know that Si Chan Wooh, the former head of Schnitzer Steel's international subsidiary, who pleaded guilty in June 2007 to conspiracy to violate the FCPA, is scheduled to be sentenced next year in federal court in Oregon. So the list now stands at 18.
Here they are:
Joshua Cantor -- no date given.
Thomas Farrell -- no date given.
Gerald and Patricia Green -- December 17, 2009
Charles Paul Edward Jumet -- February 12, 2010
Paul G. Novak -- February 19, 2010
Antonio Perez -- October 6, 2009. [No sentencing reported and no resetting of the sentencing date shown in the court docket.]Si Chan Wooh -- April 26, 2010
Jason Edward Steph -- January 28, 2010
Let us know if we're still missing anyone or if other sentencing dates have changed.
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Words we like. From Abraham Lincoln, October 1858:
It is the eternal struggle between these two principles — right and wrong — throughout the world. They are the two principles that have stood face to face from the beginning of time; and will ever continue to struggle. The one is the common right of humanity, and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, "You toil and work and earn bread, and I'll eat it." No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.
Joshua Cantor, the president of American Bank Note Holographics. He pleaded guilty in 2001 to a four-count indictment charging him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the FCPA. The charges arose from bribes paid on behalf of American Bank Note in Saudi Arabia. Cantor wasn't sentenced as scheduled in 2003. According to his court docket (available here), no new sentencing date has been fixed. Another oddity: despite pleading guilty to four felonies and being out on bail, Cantor travels a lot. Since 2003, he's obtained court approval for trips to Puerto Rico and Israel (twice each), Brazil, Canada, the British Virgin Islands, Spain, the Dominican Republic and Barbados.
Clayton Lewis was a partner in Omega Advisors, Inc., a hedge fund that invested about $126 million in Viktor Kozeny’s Azeri privatization scheme. In an enforcement action against Lewis in 2004, the government said he knew Kozeny planned to bribe Azeri officials but went ahead with Omega's investment anyway. Lewis pleaded guilty in 2005 to violating and conspiring to violate the FCPA. He appeared as a cooperating witness for the government in Frederic Bourke's trial. His sentencing was deferred for the trial and hasn't been rescheduled.
Thomas Farrell worked for Viktor Kozeny in Russia. The American pleaded guilty in 2003 to violating and conspiring to violate the FCPA. Like Lewis, he testified against Bourke. His sentencing was also deferred for Bourke's trial and hasn't been rescheduled.