No Jury Required for FCPA Restitution Orders, says 9th Circuit
In a Foreign Corrupt Practices Act case involving bribery in Thailand, the 9th U.S. Circuit Court of Appeals said a jury doesn’t need to find financial loss to an identifiable victim in order for a judge to order restitution payments. A judge making that decision is enough, said Judge Alex Kozinski. The ruling affirmed a lower court order that Gerald and Patricia Green pay $250,000 in restitution for $1.8 million in bribes they paid while running the Bangkok International Film Festival. But the ruling left the door open to changes to the 9th Circuit’s handling of restitution cases in light of a recent Supreme Court decision.
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Husband and wife Gerald and Patricia Green won contracts from the Tourism Authority of Thailand that allowed them to run the Bangkok International Film Festival from 2003 to 2007. The festival flourished during the Greens’ leadership, ranking among the top 15 film festivals in the world, the court said. But in 2006, a whistleblower informed the Federal Bureau of Investigation that the contracts were secured with $1.8 million in bribes to the Thai government. After an investigation and an indictment on FCPA, money laundering, conspiracy, and tax charge, the Central California U.S. District Court sent the Greens to prison for six months and ordered $250,000 in restitution. When the district court found the Greens liable for restitution, the judge alone decided that the Greens’ actions met the requirements for restitution -- an “identifiable victim or victims” who suffered a “pecuniary loss.” The district judge said there was a victim of the bribery, and the loss was the bribery amount. But the jury made no such findings, because it wasn’t instructed to.
The Greens argued that the judges ran afoul of precedent established by the Supreme Court in its 2000 Apprendi v. New Jersey decision. In Apprendi, the Supreme Court said any facts that increase a penalty for a crime beyond the statutory maximum need to be tried by a jury. According to the Greens, the question of whether an identifiable victim suffered a monetary loss was subject to this requirement, because the FCPA and other charges didn’t on their own make these findings. In effect, the restitution amounted to increased penalties that required factual determinations that went beyond a normal FCPA case.
Although the 9th Circuit has previously said Apprendi doesn’t apply to restitution, the Greens argued that a 2012 Supreme Court ruling in Southern Union v. U.S. clearly applied the Apprendi jury requirement to restitution orders. In Southern Union, the Supreme Court said the jury requirement applied in a criminal fines case. The Greens argued that by applying the jury requirement to fines, the Supreme Court sent a “strong signal” that Apprendi applies to restitution as well. “But strong signals aren’t enough,” said Judge Kozinski. “For a three judge panel to overrule circuit precedent, the interervening case must undercut the theory or reasoning underlying circuit precedent in such a way that the cases are clearly irreconcilable,” he said. The Southern Union case didn’t alter the landscape enough to meet that threshold and overturn 9th circuit precedent, he said.
Although the appeals court declined to overturn its precedent, Kozinski left the door open for Southern Union to have some effect on restitution. “Our precedents our clear that Apprendi doesn’t apply to restitution, but that doesn’t mean our caselaw’s well harmonized with Southern Union,” he said.
(U.S. v. Gerald and Patricia Green, 9th Circ. Nos. 10-50519, 50524, dated 07/11/13)