In the lysine international cartel case in the late 1990’s, ADM executives were sentenced to prison but their foreign counterparts entered no-jail deals with the Antitrust Division. In the early days of the international cartel program, foreign cartel members were given no-jail deals in return for their testimony because it seemed they were out of reach of the U.S. legal system. Forward to the present day auto parts cartel investigation where over 50 executives have been charged. Those foreign defendants who are not fugitives have agreed to serve prison terms. What has changed? Extradition! While the number of actual extraditions is still quite small, the threat of extradition on charges brought by the Antitrust Division looms large. Even if a defendant is in a “safe” country, the roster of governments that will honor an extradition request is growing and could take an unfavorable turn for a foreign fugitive. More countries have criminalized cartel behavior and the Division sometimes includes fraud or obstruction charges in indictments, which increases the risk of extradition. More significantly, the threat of being detained by Interpol on a Red Notice generally means a fugitive from an Antitrust Division indictment will not by using his frequent flier miles for international travel anymore.
All this is generally well-known, and the Antitrust Division aims to keep it that way. But, last week there was an extradition-related development that illustrates another extradition peril. A defendant extradited to the United States to face antitrust or related charges will be subject to bail conditions while awaiting trial. These conditions will likely include travel restrictions, even possibly house arrest.
John Bennett, a Canadian citizen, is the former Chief Executive Officer of Bennett Environmental Inc., a Canadian-based company that treated and disposed of contaminated soil. Bennett was indicted in August 2009 (D.N.J.) for his role participating in a conspiracy to pay kickbacks and commit fraud at the U.S. Environmental Protection Agency designated Superfund site in New Jersey. He was also charged with major fraud against the United States, a count that carries a ten-year maximum prison sentence. The indictment alleges that Bennett carried out the conspiracy by paying kickbacks to Gordon McDonald, the project manager at the site. The kickbacks were transferred by wire to a co-conspirator’s shell company, lavish cruises for senior officials of the prime contractor, and various entertainment tickets. The indictment charged the conspiracy began at least as early as December 2001 and continued until approximately August 2004.
On October 30, 2014 the Supreme Court of Canada denied Bennett’s application for leave to appeal an extradition order. Bennett then made his arrival in the United States in November. At Bennett’s first appearance in November, he was released on bail, but Judge Cathy L. Waldor ordered that he surrender his passport, remain under house arrest and wear a tracking device. Last week Judge Waldor denied Bennett’s request for a change in his bail status. Bennett’s trial is not scheduled until November 2015. And should Bennett’s attorneys feel they need more time to prepare and a continuance is granted, his house arrest will likely continue until the date of the trial. The point is that even if Bennett is ultimately acquitted he will have spent at least one under house arrest–an extensive loss of liberty. If he were an American defendant he would almost certainly remain free until his trial date. But, the risk of flight of a foreign defendant, especially one, who like Bennett, fought extradition, makes travel restrictions a near certainty. Not every extradited defendant will face house arrest, but at a minimum, the surrender of the passport is highly likely. Of course, things could have been worse for Bennett. He could have spent time in a jail in India while an extradition request was being reviewed– but ultimately denied. Or he could have spent nine months in a prison in Germany while his extradition to the U.S. was reviewed—and ultimately granted. There are other stories of extradition woes, some of which are not public. As the perils of extradition increases, so too does the leverage of the Antitrust Division to bargain for increasing jail sentences for foreign cartel members.
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