Last month the UK Privy Council delivered an important decision on the extent to which a bank is obliged to make inquiries into the underlying commercial purpose of offshore financial arrangements.
Entries in Privy Council (9)
Clayton Lewis, the hedge fund partner who invested and lost $126 million in Viktor Kozeny's Azeri privatization scheme, won't be sentenced until at least April, according to an order issued this month by the judge hearing his case.
The U.S. Court of Appeals has denied Frederic Bourke's request for a new trial.
A hedge fund partner who pleaded guilty to conspiracy to violate the FCPA in connection with Viktor Kozeny's Azeri privatization scheme is now scheduled to be sentenced next year on February 27.
The U.K. Privy Council ruled yesterday that Viktor Kozeny, the accused mastermind in a huge 1990's bribery scheme in Azerbaijan, can't be extradited from the Bahamas to the United States to face FCPA charges.
Kozeny, 48, a Czech citizen who fled to the Bahamas in 1999 and hasn't left since then, told Bloomberg's David Glovin: “We have prevailed on all points.”
He was arrested in the Bahamas at the request of the U.S. government in October 2005 and held in prison until granted bail in April 2007.
In 2010, he won an appellate decision to block his extradition. The Bahamas government appealed that decision to the London-based Privy Council.
The Privy Council's unanimous ruling said Kozeny's alleged bribery didn't break any laws in the Bahamas. Therefore the courts there had no jurisdiction to order his extradition.
For some British Commonwealth members including the Bahamas, the Privy Council is the final court of appeal.
Kozeny was indicted by a federal grand jury in Manhattan in May 2005 for a plot to bribe Azeri leaders to gain control of the state oil company. His co-defendant, Frederic Bourke, was convicted in 2009 of conspiracy to violate the FCPA and lying to FBI agents. Bourke was sentenced to a year and a day in prison.
Bourke lost his first appeal to overturn his conviction and separately was denied a new trial. He asked a fuller panel of the appeals court to rehear his argument. He's out on bail while the appeal is pending.
Two potential witnesses against Kozeny who pleaded guilty in the case were waiting for his extradition.
Clayton Lewis was a partner in Omega Advisors, Inc., a hedge fund that invested and lost about $126 million in Kozeny’s Azeri privatization scheme. Lewis, prosecutors said, knew Kozeny planned to pay bribes but went ahead with the investment anyway. He was arrested in 2003 and two years later pleaded guilty to conspiracy to violate the FCPA.
Hans Bodmer -- a Swiss lawyer who worked for Kozeny and was another potential witness against him -- pleaded guilty in October 2004 to conspiracy to launder money.
The DOJ repeatedly asked the court to delay their sentencing until Kozeny could be brought to trial in federal court in New York City. Bodmer and Lewis would have earned sentencing credit for their testimony. Both appeared as cooperating witnesses for the prosecution at Frederic Bourke's trial.
Lewis faces up to five years in prison. Bodmer could be jailed for up to ten years. The DOJ allowed him to live in Switzerland after his guilty plea and cooperation deal.
Kozeny still faces other charges and could be arrested if he leaves the Bahamas.
Bloomberg's Glovin said: 'New York State prosecutors separately have accused Kozeny of stealing hundreds of millions of dollars from his U.S. investors in the Azerbaijan deal. Czech prosecutors have presented evidence to a court trying Kozeny in absentia on charges of embezzling $1.1 billion from mutual funds he established in the Czech Republic in the early 1990s.'
Kozeny told Glovin 'he will leave it to his lawyers to seek resolution of the charges.'
Bloomberg's David Glovin, who provided outstanding daily coverage of Frederic Bourke's 2009 FCPA-related trial, filed a story yesterday about new money laundering allegations against a key government witness, Hans Bodmer.
Clayton Lewis -- who pleaded guilty in 2005 to conspiracy to violate the FCPA and launder money -- will wait until at least next February to be sentenced.
The Swiss lawyer who helped FCPA fugitive Viktor Kozeny move money and provided key testimony against Frederic Bourke is still waiting to be sentenced more than six years after pleading guilty.
More than five years after pleading guilty, Clayton Lewis is still waiting to be sentenced. And that's the way the government wants it.