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U.S. v. David Kay and Douglas Murphy

 
:
ARI - Kay, David
:
DOJ Criminal
:
December 12, 2001
:
U.S. v. David Kay and Douglas Murphy
:
U.S. v. David Kay and Douglas Murphy, H-01-914-S (S.D.Tex. 2004)
:
Agriculture-Food
:
Haiti
:
1998; 1999
:
Undiscosed Haitian customs and tax officials.
:
Between January 1998 and October 1999, David G. Kay, a former vice president of American Rice, Inc. ("ARI"), allegedly directed an ARI employee to prepare false shipping records that underreported the tonnage of rice on relevant vessels to Haiti. Haitian customs officials allegedly used these false records to clear these vessels through customs at a reduced customs tax. In exchange, Kay purportedly directed American Rice employees stationed in Haiti to pay cash bribes to certain customs officials. To hide these payments, Kay allegedly directed ARI's controller in Haiti to improperly record the bribery payments as routine costs of sales. Over this time period, ARI allegedly made at least 12 bribery payments totaling over $500,000 in exchange for avoiding approximately $1.5 million in Haitian import taxes. Douglas A. Murphy, ARI's former president, was purportedly aware of the bribery scheme, but took no action to stop the payments. The reduced import tax allegedly allowed ARI to retain it's competitive price advantage in the face of rice smugglers, who paid no import taxes, and officials who cut similar deals with other competitors.

Kay was initially charged with twelve counts of violating the FCPA. In May of 2002, U.S. District Judge David Hittner dismissed the indictment against Kay. On February 11, 2004, the United States Court of Appeals for the Fifth Circuit reversed and remanded the district court decision. On July 15, 2004, the Government filed a superseding indictment which added a charge of conspiracy. A jury subsequently found Kay guilty on all counts. Kay subsequently filed a motion for a new trial, which was denied. The court sentenced Kay to 37 months incarceration and ordered him to pay $1,300 in penalties.

Kay appealed his conviction, which the United States Court of Appeals for the Fifth Circuit upheld in October 2007. On April 9, 2008, Kay filed a Writ of Certiorari to the U.S. Supreme Court which was denied on October 6, 2008.
:
Anti-bribery (Domestic Concern), Anti-bribery (Issuer), Conspiracy - Anti-Bribery
:
Conviction, Fine
:
37 months incarceration; 2 years supervised release; $1,300 special assessment
:
1,300
:
37
:
Officer of Issuer
:
Other Senior Officer
:
U.S.
:
Tax
:
1,500,000
:
Wire/check
:
Customs Broker or Agent/Consultant
:
528,000
:
Haiti
:
Haiti
:
The intent element of the FCPA does not require that defendant knew he or she was violating the FCPA, but only that defendant acted corruptly, with an unlawful end or result, and committed intentional and knowing acts with a bad motive.

The bribe itself need not cross state lines to constitute "interstate commerce". The element may be found if activities that support the bribe occur through interstate commerce - in this case, the sending of false shipping documents.
:
No