A criminal lawyer’s take on the Patrick Ho case

Rob Precht contributed the following comment on the Patrick Ho case to the Chinalaw listserv; with his kind permission, I’m reposting it here. His take is very interesting.

The Patrick Ho case in NYC threatens to spill the beans on a big Chinese company with ties to Chinese government officials. It could also produce changes in Chinese business practices.

As most people on this list know former Hong Kong home secretary Patrick Ho is in jail in NYC awaiting trial on charges that he offered nearly U.S.$ 3 million dollars in bribes to African officials to obtain lucrative oil contract rights for a Shanghai energy company called CEFC. The indictment principally charges him with violations of the the U.S. Foreign Corrupt Practises Act (FCPA) an expansive law that makes even non-U.S. citizens working on behalf of non-U.S. companies and bribing non-U.S. entities liable for long prison terms if they are convicted. I am not an expert in FCPA prosecutions, but I am a former criminal appellate lawyer with the New York Federal Defender’s office, and I want to share with you a few observations and get our comments.

Ho appeared yesterday here in NYC before the Federal judge who will preside at trial Katherine Forrest. His lawyers are former prosecutors who recently left the office that is prosecuting Ho. They are know as insiders, not scrappy trial lawyers.

What’s interesting is that both the government’s attorneys and the defense attorneys agreed to a very distant trial date — January 2019. Ordinarily under Federal law trial must commence within 70 days from the date of the indictment, which in this case was late December. Defendants who plan to go to trial and contest the charges usually insist on a speedy trial, because their lawyers know that the longer the government is given to prepare, the stronger its case is likely to be. Also, Ho is detained and has been denied bail because he is deemed a flight risk. In such cases a judge would want to start the trial earlier rather than later. But the defense lawyers agreed to a distant trial date.

The fact that Ho’s attorneys have agreed to delay the trial suggests to me that they are already engaged in plea negotiations with the government. I may be wrong, but I believe Ho will eventually plead guilty, and he will do so according to an agreement which stipulates that if he provides “substantial assistance” to prosecutors that helps them to charge or convict other individuals who are as yet unidentified he could get a big sentence reduction. The reason I think this is going to happen is that he faces huge risks if he goes to trial and is convicted — up to 20 years in prison. Even a light sentence after trial would almost certainly be in the 3-5 year range, given the dollar amount of the bribe. Also remember that Ho has been charged with conspiracy to violate the FCPA. Conspiracy law is not recognized in China and Hong Kong, but in the U.S. conspiracy basically makes a person guilty even if the crime is not committed. In Ho’s case, all the prosecutors need to prove is that he agreed with others to attempt the bribery scheme, even if the bribes themselves never happened. Historically, there have been very few acquittals of individuals charged with FCPA violations.

The only way Ho can escape the risk of a long prison term is to plead guilty AND cooperate with federal authorities to identify other guilty persons. If such an agreement is reached, then I think he may make some explosive disclosures about the activities of the Chinese conglomerate CEFC. These disclosures would be particularly embarrassing to the Chinese government which, as the article below notes, has close ties to CEFC. Officials associated with other companies doing similar things could also be identified by Ho pursuant to a plea agreement. So the stakes are high, not only for Ho himself, but for CEFC and other companies that engage in similar practises, to wit, bribing foreign government officials to win contracts.

U.S. prosecutors have been given huge power through the FCPA to punish non-U.S. citizens for engaging in corruption any place in the world. The Ho prosecution highlights the lack of meaningful enforcement by Hong Kong or Chinese regulators. The Ho case might also be a tool for discouraging Chinese companies from bribing foreign officials in the future.

Caveat: I could be dead wrong about my prediction of a guilty plea. But given the what appears to be strong evidence in the form of emails and documents, plus the severe prison term he faces, a guilty plea coupled with cooperation with the Federal authorities is certainly a strong possibility. Also, Ho’s original co-defendant — Cheikh Gadio — was granted bail. And he was severed from the Ho indictment. His name no longer appears on it. These developments suggest to me that he may have already entered into his own agreement with the government to plead guilty and testify against Ho.