The Honorable Henry E. Hudson, U.S. District Judge for the U.S. District Court for the Eastern District of Virginia struck an ominous note for individuals facing FCPA scrutiny when he handed down the stiffest individual penalty to date at the April 19, 2010 sentencing of Charles Paul Edward Jumet. Jumet was given 87 months (over 7 years) in prison for his convictions on conspiracy to violate the FCPA and making false statements to federal agents. He had pled guilty on November 13, 2009.
The charges against Jumet (pdf), the former president of the Virginia-based Ports Engineering Consultants Corporation (PECC), stemmed from a six-year scheme whereby Jumet and several others paid over $200,000 to Panamanian officials in order to win contracts. Following the sentencing, Jumet’s attorney described him as “a good man who got caught up in a bad situation in Panama, and made some bad choices.” Judge Hudson has given Jumet a significant period of time in which to consider those choices, and has sent a strong message to other individuals that FCPA enforcement carries real consequences. He has an opportunity to drive that message home even further on May 14 when a co-worker who pled guilty subsequent to Jumet faces sentencing for his role in the same scheme.
Prosecutors from the U.S. Attorney’s Office for the Eastern District of Virginia had asked the court to sentence Jumet to 97 months in jail, which should not be surprising given the recent tenor of public comments from key DOJ officials regarding FCPA enforcement and individual prosecutions.
In a February 2010 address, Mark Mendelsohn, then Deputy Chief of the DOJ’s Fraud Section within the Criminal Division, discussed FCPA enforcement trends, highlighting the rise in prosecutions of individuals from 25 total for the years 2006 to 2008, to 44 in 2009 alone. This echoed comments made by Assistant Attorney General for the Criminal Division Lanny Breuer in late 2009, where he stressed the importance of investigating and prosecuting senior executives and stated that “for our enforcement efforts to have real deterrent effect, culpable individuals must be prosecuted and go to jail.”
In a speech the day following Mendelsohn’s February remarks, Breuer described a new era of “proactive and innovative white collar enforcement,” that will include the use of investigative tools such as wiretaps and undercover operations, and will use “the aggressive prosecution of individuals” as a means to “make it clear to every corporate executive, every board member, and every sales agent that we will seek to hold you personally accountable for FCPA violations.”
The Jumet sentencing gives real substance to Breuer’s and Mendelsohn’s statements. As Breuer stated in the DOJ press release following the Jumet sentencing, the sentence “is an important milestone in our effort to deter foreign bribery. As this case confirms, foreign corruption carries with it very serious penalties, which can include substantial prison time for individuals who violate the law.”
It is too soon to say whether the Jumet sentencing is a prologue or an outlier. However, it is clear that the DOJ focus on prosecution of culpable individuals under the FCPA is real and is here to stay.