Business Crimes Hotline

LONDON, UK; PENNSYLVANIA

UK Bribery Case Collapses Amid Witness Troubles

The United Kingdom's Serious Fraud Office (SFO) abruptly dropped its high-profile international bribery case against billionaire businessman Victor Dahdaleh on Dec. 10, 2013, blaming the midtrial retreat partly on complications involving witnesses from Akin Gump Strauss Hauer & Feld.

The judge overseeing the London case told jurors on Dec. 10 to return a not-guilty verdict against Dahdaleh after prosecutors said they would not put forward any more evidence. UK prosecutors had alleged that Dahdaleh, while working as an agent for Alcoa, Inc., in the 1990s to 2004, paid about $67 million in bribes to Bahraini officials and employees of the Bahraini state-controlled smelting company Aluminium Bahrain B.S.C., known as Alba. Dahdaleh has admitted to making payments, but maintains that the Bahraini government knew about and condoned his actions.

The implosion of the SFO's corruption trial comes at a particularly hard time for the British agency, which last year withdrew its case against property tycoon Vincent Tchenguiz related to the collapse of the Icelandic bank Kaupthing.

The SFO's lead trial lawyer, Philip Shears of 7 Bedford Row Chambers, told the court that prosecutors were dropping the case against Dahdaleh in part because of difficulties involving two witnesses, Akin Gump partners Mark MacDougall and Randy Teslik, who had provided some unspecified help to the SFO case officer in Bahrain in the UK probe. MacDougall and Teslik, Shears said, would not consent to unfettered cross-examination in the London courtroom, citing attorney-client privilege.

According to a report in The Independent, the Akin Gump lawyers' participation posed a potential conflict of interest because MacDougall is concurrently spearheading Alba's ongoing civil case against Dahdaleh in federal court in Pittsburgh. (MacDougall did not respond to requests for comment.)

The SFO's chief, David Green, reportedly called Akin Gump chairman R. Bruce McLean to try to resolve the issue, and ultimately struck a compromise where MacDougall and Teslik agreed to participate at trial by video link. But they would do so only if the scope of their testimony was limited in order to prevent them from breaching client communications.

Ultimately, Shears said that the limited testimony would not be fair to Dahdaleh. Shears also told jurors that the government's case was damaged when a major prosecution witness, former Alba CEO Bruce Hall, suddenly changed his evidence. According to a 2012 Fortune report, Hall was originally prepared to testify that he had received $5 million in kickbacks from Dahdaleh.

Ironically, the civil case against Dahdaleh, filed in 2008 by Alba in federal district court in Pittsburgh before Judge Donetta Ambrose, may pick up now that the UK case has collapsed. Discovery was delayed for three years because of a U.S. criminal probe. Then, in 2011, Dahdaleh's lawyers prevailed in shutting down discovery until the trial in London was finished. Alcoa, which agreed to a deal worth more than $400 million to settle Alba's RICO and fraud claims in October 2012, is no longer part of that civil suit.

According to Alcoa's most recent annual report, the U.S. government's criminal probe into the company remains unresolved. ' Julie
Triedman, The Litigation Daily

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LONDON, UK; PENNSYLVANIA

UK Bribery Case Collapses Amid Witness Troubles

The United Kingdom's Serious Fraud Office (SFO) abruptly dropped its high-profile international bribery case against billionaire businessman Victor Dahdaleh on Dec. 10, 2013, blaming the midtrial retreat partly on complications involving witnesses from Akin Gump Strauss Hauer & Feld.

The judge overseeing the London case told jurors on Dec. 10 to return a not-guilty verdict against Dahdaleh after prosecutors said they would not put forward any more evidence. UK prosecutors had alleged that Dahdaleh, while working as an agent for Alcoa, Inc., in the 1990s to 2004, paid about $67 million in bribes to Bahraini officials and employees of the Bahraini state-controlled smelting company Aluminium Bahrain B.S.C., known as Alba. Dahdaleh has admitted to making payments, but maintains that the Bahraini government knew about and condoned his actions.

The implosion of the SFO's corruption trial comes at a particularly hard time for the British agency, which last year withdrew its case against property tycoon Vincent Tchenguiz related to the collapse of the Icelandic bank Kaupthing.

The SFO's lead trial lawyer, Philip Shears of 7 Bedford Row Chambers, told the court that prosecutors were dropping the case against Dahdaleh in part because of difficulties involving two witnesses, Akin Gump partners Mark MacDougall and Randy Teslik, who had provided some unspecified help to the SFO case officer in Bahrain in the UK probe. MacDougall and Teslik, Shears said, would not consent to unfettered cross-examination in the London courtroom, citing attorney-client privilege.

According to a report in The Independent, the Akin Gump lawyers' participation posed a potential conflict of interest because MacDougall is concurrently spearheading Alba's ongoing civil case against Dahdaleh in federal court in Pittsburgh. (MacDougall did not respond to requests for comment.)

The SFO's chief, David Green, reportedly called Akin Gump chairman R. Bruce McLean to try to resolve the issue, and ultimately struck a compromise where MacDougall and Teslik agreed to participate at trial by video link. But they would do so only if the scope of their testimony was limited in order to prevent them from breaching client communications.

Ultimately, Shears said that the limited testimony would not be fair to Dahdaleh. Shears also told jurors that the government's case was damaged when a major prosecution witness, former Alba CEO Bruce Hall, suddenly changed his evidence. According to a 2012 Fortune report, Hall was originally prepared to testify that he had received $5 million in kickbacks from Dahdaleh.

Ironically, the civil case against Dahdaleh, filed in 2008 by Alba in federal district court in Pittsburgh before Judge Donetta Ambrose, may pick up now that the UK case has collapsed. Discovery was delayed for three years because of a U.S. criminal probe. Then, in 2011, Dahdaleh's lawyers prevailed in shutting down discovery until the trial in London was finished. Alcoa, which agreed to a deal worth more than $400 million to settle Alba's RICO and fraud claims in October 2012, is no longer part of that civil suit.

According to Alcoa's most recent annual report, the U.S. government's criminal probe into the company remains unresolved. ' Julie
Triedman, The Litigation Daily

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