Sunday, October 14, 2007

Indictments in Case Related to Export-Import Bank

The Department of Justice issued a press release stating that "eight defendants have been charged in connection with an [alleged] $80 million scheme to defraud the Export-Import Bank of the United States."  The release says that five of the eight have plead guilty.The press release states:

"Five of the eight individuals charged have pleaded guilty in connection with a scheme involving $80 million worth of fraudulent loan transactions between companies located in the Philippines and United States lending banks, in which the Export-Import Bank of the United States (Ex-Im Bank) acted as guarantor or insurer. As part of the scheme, a loan broker in the Philippines assisted borrowers in executing loan agreements with the lending banks and in obtaining loan guarantees or insurance policies from the Ex-Im Bank as part of the loan agreements. The loan broker then recruited United States exporters for the purpose of purchasing U.S. goods and shipping those goods to the Philippine borrowers, and then instructed the exporters to prepare false shipping documents and submit those false documents to the lending banks to make it appear that they had purchased and shipped goods. In reality, the exporters did not purchase the goods called for in the loan agreements, and instead misappropriated a majority of the loan proceeds."

Because the U.S. Federal Sentencing Guidelines factor in the amount of fraud loss when computing an individual's sentence, the risk of going to trial on these type of cases is enormous.  Often, the government is able to secure quick pleas because those facing a large sentence are anxious to reduce that sentence.  Agreements to cooperate often accompany the pleas, as an accused individual seeks to reduce his or her prison time.  This is possible through a government 5K1.1 motion, a motion made by the government when an individual provides substantial assistance.

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/10/indictments-in-.html

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