A&O Shearman FCPA Digest | United States v. John Joseph O’Shea (S.D. Tex. 2009)<br /> United States v. Fernando Maya Basurto (S.D. Tex. 2009)

Source Documents

Case Name
United States v. John Joseph O’Shea (S.D. Tex. 2009)
United States v. Fernando Maya Basurto (S.D. Tex. 2009)

Foreign Official
Four top officials with the Comisión Federal de Electricidad (“CFE”), Mexico’s national electric grid operator.

Nature of Business
John Joseph O’Shea was the general manager of the Texas unit of ABB, a multinational conglomerate headquartered in Switzerland. Fernando Maya Basurto directed a Mexican company that served as a sales representative for ABB in Mexico.

Influence to be Obtained
Federal prosecutors allege O’Shea conspired with Basurto to bribe four officials of the CFE to obtain lucrative contracts for upgrading Mexico’s electrical network. ABB acquired the Texas unit in 1999, when prosecutors allege the bribery scheme was already underway. CFE officials were allegedly to be paid 10% of the revenues from a contract awarded to ABB known as the Evergreen contract. The officials received over $900,000 in bribes before an internal investigation at ABB halted the transfers. The payments were routed through Mexican shell corporations and a bank account in Germany. Basurto and another co-conspirator received approximately 9% on the value of the contracts in exchange for being a conduit for the bribes and other services. O’Shea also received kickback payments from Basurto and the other co-conspirator under this arrangement. O’Shea was ultimately fired, and after that, he, Basurto, and some of the Mexican officials allegedly tried to cover up the bribery by creating fake, backdated documents. ABB voluntarily disclosed the suspected bribery to U.S. and Mexican authorities in 2005.

Enforcement
On November 16, 2009, Basurto pleaded guilty to one count of conspiracy to violate the FCPA, money laundering, and falsifying records. Pursuant to his plea, he agreed to forfeit $2,030,076.74. On April 5, 2012, Basurto was sentenced to time served, which amounted to the 22 months he served in jail after his arrest in 2009.

Also on November 16, 2009, the DOJ charged O’Shea with conspiracy, twelve counts of violating the FCPA, four counts of international money laundering violations, and falsifying records in a federal investigation. On December 3, 2009, O’Shea pleaded not guilty to all counts. On January 16, 2012, after a three-day jury trial, U.S. District Judge Lynn N. Hughes granted O’Shea’s motion for acquittal on the substantive charges. Judge Hughes commented that the government’s principal witness, Basurto, Jr., “knows almost nothing.” Additionally, Judge Hughes noted that while the government is not required to “trace a particular dollar to a particular pocket of a particular official,” the government is required to show some connection between a payment and a foreign official, which it failed to do in O’Shea’s case. On February 9, 2012, upon the government’s motion to dismiss, the remaining counts of the indictment were dismissed with prejudice.

Other Statutory Provision
Conspiracy (Money Laundering); Conspiracy (Falsification of Records); Criminal Forfeiture.