transcript of change of plea and sentencing before the honorable marcia g. cooke united states...

8/22/2019 TRANSCRIPT OF CHANGE OF PLEA AND SENTENCING BEFORE THE HONORABLE MARCIA G. COOKE UNITED STATES

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1 UNITEDUNITEDUNITEDUNITED STATES DISTRICT COURTSTATES DISTRICT COURTSTATES DISTRICT COURTSTATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDASOUTHERN DISTRICT OF FLORIDASOUTHERN DISTRICT OF FLORIDASOUTHERN DISTRICT OF FLORIDA

2 MIAMI DIVISIONMIAMI DIVISIONMIAMI DIVISIONMIAMI DIVISIONCASECASECASECASE NO.NO.NO.NO. 10-20906-CR-COOKE10-20906-CR-COOKE10-20906-CR-COOKE10-20906-CR-COOKE

3 CASECASECASECASE NO.NO.NO.NO.10-20907-CR-COOKE10-20907-CR-COOKE10-20907-CR-COOKE10-20907-CR-COOKE

4

5 THETHETHETHE UNITED STATES OF AMERICA,UNITED STATES OF AMERICA,UNITED STATES OF AMERICA,UNITED STATES OF AMERICA,

6 Plaintiff,

7 vs.Courtroom 11-2

8 Miami, FloridaMay 11, 2011

9 ALCATEL-LUCENTALCATEL-LUCENTALCATEL-LUCENTALCATEL-LUCENT FRANCE,FRANCE,FRANCE,FRANCE, S.S.S.S.A.A.A.A.,,,,

ALCATEL-LUCENTALCATEL-LUCENTALCATEL-LUCENTALCATEL-LUCENT TRADETRADETRADETRADE INTERNATIONAL,INTERNATIONAL,INTERNATIONAL,INTERNATIONAL, A.A.A.A.GGGG.,.,.,.,10 ALCATEL-CENTROAMERICA,ALCATEL-CENTROAMERICA,ALCATEL-CENTROAMERICA,ALCATEL-CENTROAMERICA, S.S.S.S.AAAA.,.,.,.,

Defendant.11 _______________________________________________________________

TRANSCRIPT OFTRANSCRIPT OFTRANSCRIPT OFTRANSCRIPT OF STATUSSTATUSSTATUSSTATUS CONFERENCECONFERENCECONFERENCECONFERENCE12 BEFORE THE HONORABLEBEFORE THE HONORABLEBEFORE THE HONORABLEBEFORE THE HONORABLE MARCIAMARCIAMARCIAMARCIA G.G.G.G. COOKECOOKECOOKECOOKE

UNITED STATESUNITED STATESUNITED STATESUNITED STATES DISTRICTDISTRICTDISTRICTDISTRICT JUDGEJUDGEJUDGEJUDGE13

14 APPEARANCES:APPEARANCES:APPEARANCES:APPEARANCES:

15 FOR THE PLAINTIFF:FOR THE PLAINTIFF:FOR THE PLAINTIFF:FOR THE PLAINTIFF:

United States Department of Justice16 BY:BY:BY:BY: CHARLESCHARLESCHARLESCHARLES E.E.E.E. DUROSSDUROSSDUROSSDUROSS,,,, AAAA.U.S.A..U.S.A..U.S.A..U.S.A.1400 New York Avenue, N.W.

17 Bond Building, Fourth FloorWashington, D.C., 20005

18

19 FOR THEFOR THEFOR THEFOR THE DEFENDANTDEFENDANTDEFENDANTDEFENDANTS:S:S:S:Sale & Weintraub, P.A.

20 BY:BY:BY:BY: JONJONJONJON A.A.A.A. SALE,SALE,SALE,SALE, ESQ.ESQ.ESQ.ESQ.Wachovia Financial Center

21 Suite 4300200 South Biscayne Boulevard

22 Miami, Florida 33131

23 Willkie, Farr & Gallagher, LLPBY:BY:BY:BY: MARTINMARTINMARTINMARTIN J.J.J.J. WEINSTEIN,WEINSTEIN,WEINSTEIN,WEINSTEIN, ESQ.ESQ.ESQ.ESQ.

24 BY:BY:BY:BY: ROBERTROBERTROBERTROBERT J.J.J.J. MEYER,MEYER,MEYER,MEYER, ESQ.ESQ.ESQ.ESQ.1875 K Street, NW

25 Washington, D.C., 20006-1238

PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHYPROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHYPROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHYPROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHYTRANSCRIPT PRODUCED BY COMPUTERTRANSCRIPT PRODUCED BY COMPUTERTRANSCRIPT PRODUCED BY COMPUTERTRANSCRIPT PRODUCED BY COMPUTER

Case 1:10-cr-20907-MGC Document 69 Entered on FLSD Docket 06/16/2011 Page 1 of 33


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1 INTERESTEDINTERESTEDINTERESTEDINTERESTED PARTY:PARTY:PARTY:PARTY:

2 Instituto Costarricensede Electricidad

3 Wiand Guerra King, PL

BY:BY:BY:BY: BurtonBurtonBurtonBurton W.W.W.W. Wiand,Wiand,Wiand,Wiand, Esq.Esq.Esq.Esq.4 BY:BY:BY:BY: GeorgeGeorgeGeorgeGeorge L.L.L.L. Guerra,Guerra,Guerra,Guerra, Esq.Esq.Esq.Esq.

BY:BY:BY:BY: JordanJordanJordanJordan D.D.D.D. Maglich,Maglich,Maglich,Maglich, Esq.Esq.Esq.Esq.5 3000 Bayport Drive, Suite 600

Tampa, Florida 336076

7

8 REPORTED BY:REPORTED BY:REPORTED BY:REPORTED BY: DAWN M. WHITMARSH, RPRDAWN M. WHITMARSH, RPRDAWN M. WHITMARSH, RPRDAWN M. WHITMARSH, RPROfficial Court ReporterOfficial Court ReporterOfficial Court ReporterOfficial Court Reporter

9 400 N. Miami Avenue, 10S03400 N. Miami Avenue, 10S03400 N. Miami Avenue, 10S03400 N. Miami Avenue, 10S03

Miami, Florida 33128Miami, Florida 33128Miami, Florida 33128Miami, Florida 3312810 Telephone: 305-523-5598Telephone: 305-523-5598Telephone: 305-523-5598Telephone: 305-523-5598

11

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________12

13 P-R-O-C-E-E-D-I-N-G-S

14 COURTROOM DEPUTY: Your Honor, we have our status

15 conference this morning on USA versus Alcatel-Lucent France.

16 There are two cases, 10-20906 and 10-20907.

17 THE COURT: For the record, appearing on behalf of the

18 United States.

19 MR. DUROSS: Good morning, Your Honor. Charles Duross

20 on behalf of the United States.

21 THE COURT: Appearing on behalf of Alcatel-Lucent

22 France, S.A.

23 MR. SALE: Good morning, Your Honor. Jon Sale of Sale

24 and Weintraub, together with Martin Weinstein and Robert Meyer

25 of Willkie, Farr and Gallagher. Both of my colleagues have bee




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1 admitted pro hac vice.

2 THE COURT: Okay. Spectators may be seated.

3 When we started down this path, Mr. Duross, it might

4 have been you who informed me this was going to be a plea in

5 both matters. Correct?

6 MR. DUROSS: Three guilty pleas in one matter and a

7 deferred prosecution agreement in the second.

8 THE COURT: And has anything changed in that from the

9 government's standpoint or from the defendant's standpoint?

10 MR. DUROSS: No, Your Honor. Just as the Court may

11 recall, we had a status conference on March 9th and at that

12 point in time, I described generally to the Court the

13 resolutions that were in place and that we were willing and

14 ready to proceed.

15 Mr. Wiand, who is here along with his colleagues,

16 represent ICE, which is the state-owned electrical commission

17 and telephone communication in Costa Rica. He's joined by

18 Mr. Guerra and Mr. Maglich. They had raised the issue of

19 whether or not they were entitled to victim status and

20 restitution, and the Court, at that point in time, followed the

21 Government's recommendation of having Probation prepare either a

22 memorandum or a limited PSI. And the Court ordered that we wor

23 with Probation to generate something so the Court could take a

24 look at it in anticipation of the change of plea and sentencing

25 So if Your Honor would like, I can kind of give you an




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1 update of sort of where we're at at this juncture.

2 THE COURT: Okay, because I do have the filings by ICE

3 in three separate cases that was filed on February 3rd, so

4 Docket Entry 16, 22 and 24. Are you aware of those, Mr. Duross

5 MR. DUROSS: I believe they were filed last week, Your

6 Honor.

7 THE COURT: May 3rd.

8 MR. DUROSS: Oh, you said February 3rd.

9 THE COURT: Oh, I'm sorry. If I said that I misspoke.

10 I apologize.

11 MR. DUROSS: Yes, Your Honor. So if I may approach an

12 just give you kind of a status, that might make some sense.

13 THE COURT: Please.

14 MR. DUROSS: Thank you, Your Honor. So as I was

15 indicating, on March 9th the Court had ordered that we work wit

16 Probation to help Probation prepare a limited presentence

17 investigation report. And the Court also proposed some dates

18 for a change of plea at that point in time.

19 On March 14th, I received a letter from Probation,

20 Mr. Jenkins. That was actually generated, I think as a result

21 of me calling shortly after this hearing to Probation to find

22 out who was going to be assigned to the matter.

23 On March 17th -- let me step back for a second. On

24 March 9th when we had our hearing before Your Honor, there was

25 the 20906 case, which involved the three different wholly owned




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1 subsidiaries of the company, and at that point the Court did not

2 have before it the 20907 case which is the case against the

3 parent corporation Alcatel-Lucent, S.A.

4 On March 17th, the Court accepted the transfer of that

5 matter from Judge Seitz, who the Court may recall had a

6 conflict. Her husband had done some work for the company at

7 some point in time.

8 On March 28th, I met with Mr. Jenkins to go through the

9 materials. I provided him with copies of all the different

10 resolution documents, including the informations that had been

11 filed in both the 20906 case involving the three subsidiaries,

12 as well as the 20907 case against the parent. I provided him

13 with those copies and also talked to him about the offense

14 conduct, the guideline calculations and the like. We had a

15 detailed discussion about how those different resolutions

16 interacted with each other because obviously it's a significant

17 matter with a lot of moving pieces.

18 I also raised with Mr. Jenkins at that point in time

19 what the Court had talked about, which was the issue of victim

20 status and restitution regarding ICE and we discussed that and I

21 told him I would provide to him ICE's counsel's contact

22 information so he could reach out to ICE's counsel and have them

23 make a submission to probation concerning victim status as well

24 as restitution. And that was on March 28th.

25 On March 30th, I provided to him electronic copies of




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1 all of the different filings along with the offense conduct as

2 well as ICE's counsel's contact information.

3 It is my understanding that since that point in time,

4 the company has also met with Mr. Jenkins. He had requested a

5 lot of information from the company concerning financial

6 statements and the like. I believe they provided that

7 information to Mr. Jenkins.

8 It's also my understanding that Mr. Jenkins in, I thin

9 it was mid-April, had reached out to ICE's counsel to ask them

10 for information. I don't know what he asked them for, but he

11 mentioned to me later I think it was -- I think on Friday I

12 spoke with Mr. Jenkins just to ask him whether or not he had at

13 least been in touch with ICE's counsel. He indicated that he

14 had. He'd sent something, I think, in mid-April and then also

15 in late April to them to ask for them to provide him with

16 information regarding their claims for victim status.

17 Mr. Jenkins also requested from myself, and I believe

18 the company as well the Defendants, both the parent company as

19 well as the three subsidiaries, their position with regard to

20 victim status and restitution, and I provided that to Mr.

21 Jenkins.

22 Last week we received the filings that the Court was

23 just discussing. Those were filed both in the parent case, the

24 20907 case, as well as the case involving the three subsidiarie

25 which is also before the Court in 20906.




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1 So I reviewed those. As the Court is aware, they are

2 substantial filings. I think the pleadings are almost 50 pages

3 long or so, 40 or 50 pages and the attachments are about 1,300

4 pages. I've taken a look at that and the Government is

5 preparing a response.

6 What I was hoping to do today, Your Honor, is to ask

7 the Court to, if the Court deems it appropriate, to set out a

8 briefing schedule so I can file a response and then also ask the

9 Court to set down a hearing date. I would prefer it be --

10 THE COURT: Did we do any of this before we actually

11 have guilty plea?

12 MR. DUROSS: Well, that's an excellent question, Your

13 Honor. I mean --

14 THE COURT: It seems like we're spinning backwards.

15 MR. DUROSS: Well, I think that the -- from my

16 perspective, we could do the change of plea and we could also

17 argue about the victim status and restitution. That would be

18 fine with me. I suspect that the company --

19 THE COURT: Because one doesn't preclude the other.

20 MR. DUROSS: I don't think it does, but I do think tha

21 the Defendants think that there's a difference. We have a

22 difference of opinion about that. I believe that we could move

23 forward with the change of plea before the Court decides the

24 restitution and the victim status issue. I believe that the

25 company would disagree with that because it's an 11C1C plea,




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1 which is sort of a thumbs up/thumbs down, as opposed to the

2 standard pleas that the Court normally would see which is you

3 plead guilty, then the Court has complete discretion into what

4 to do, within the limits of the law obviously. But this is a

5 C1C plea, which while rare I think in this district and most

6 districts, is not actually uncommon when it comes to Foreign

7 Corrupt Practices Act involving corporations.

8 But in any event -- so I think that's where we're at. I

9 think that the issues that were raised by ICE are really sort of

10 three-fold. One is victim status; two is whether they're

11 entitled to restitution and three, they object to the plea

12 agreements themselves. And I guess as I say that, it reminds me

13 that I suspect ICE would actually think that their issue should

14 be heard prior to a guilty plea being entered because they

15 object to the plea agreements themselves. Now whether they have

16 the right to do that or not is a different matter, but I don't

17 want to speak for them, but I do want to be candid with the

18 Court, I suspect that they would have issues as well.

19 I think maybe a proposal that might work and would be

20 acceptable to everybody to respect the potential rights of ICE,

21 to the extent that they're considered a victim, as well as the

22 company and the Government, would be to file a pleading and

23 response, the Government would. Whether the Defendants want to

24 is obviously up to them. We still have not received from

25 Probation the proposed -- their memorandum. Mr. Jenkins, when




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1 spoke with him on Friday, indicated that it was almost done.

2 And so I think we need to see that as well.

3 But what I would propose is that we have an opportunit

4 to file a brief in response, and then set down a change of plea

5 and at that change of plea, we could have any arguments that we

6 need in terms of whether the ICE thinks that the pleas are

7 inappropriate, which is one of the issues that they raise, and

8 that we could have that discussion with the Court, and the

9 Court, at that point in time, could decide whether to move

10 forward with the change of plea.

11 Our position, I think is obvious, we think the plea

12 agreements are firm and fair. This is actually one of the

13 largest fines ever issued under the Foreign Corrupt Practices

14 Act. It's the second time in history that a French company has

15 actually been prosecuted for Foreign Corrupt Practices Act

16 violations. I think it's a significant and meaningful

17 resolution, and I would like an opportunity, Your Honor, to lay

18 that out in response to what ICE's counsel's has filed on their

19 behalf.

20 I think that's kind of where we're at. I would propos

21 that we have an opportunity to file a brief, then set it down

22 for a change of plea, then move forward from there.

23 And just so it's clear, nothing has changed in terms o

24 the Defendants' willingness to plead guilty and our willingness

25 to move forward with the resolution. The issue really remains




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1

1 at this juncture what it was on March 9th, which is the victims

2 now having -- not now, victims having raised their issues and

3 filed the pleadings, which I think Probation was going to be

4 addressing providing, at least, an initial view to the Court.

5 THE COURT: Let me hear from the victim for a moment

6 please. Counsel?

7 MR. WIAND: Thank you, Your Honor. My name is Burton

8 Wiand. I'm with Wiand Guerra King from Tampa, and my partner

9 George Guerra is with me, as well as Jordan Maglich.

10 Judge, I think, you know, I'd like to start back a

11 little bit historically before I get directly to the issues and

12 I think the Court should be aware that the investigation in thi

13 matter started in 2004.

14 In 2007, there was an individual named Sapsizian who

15 was the cooperating witness who provided the whole case -- he

16 was sentenced in early 2007 -- and laid out the complete case at

17 that time which ICE was -- ICE, Instituto Costarricense de

18 Electricidad, was the primary area victim.

19 Then subsequently there was the continued investigatio

20 of Alcatel who had resisted that continually until that point i

21 time. And after the evidence was laid out by Mr. Sapsizian the

22 had little choice, but they began to cooperate with the

23 Government.

24 In January of 2010, Alcatel announced it had reached a

25 agreement with the Government, the exact terms that you see




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1

1 before Your Honor and with the SEC, the exact terms that were

2 agreed to there. At that point in time, maybe in the summer of

3 2010 we were retained. We began to contact the Justice

4 Department, Probation and Judge Seitz asking to have our status

5 as a victim recognized so that we could get into the swim. We

6 wrote months ago to Mr. Duross requesting a victim number. He

7 told us that foreign governments didn't get victims and then he

8 told us because people with our company were bribed we couldn't

9 be a victim. And we've heard about various different kinds of

10 things about why we are not a victim.

11 And then we look at the plea that is proposed to the

12 Court and the plea, as it stands now, and the plea agreement,

13 would waive and undermine any potential victim rights in

14 connection with this criminal prosecution. It is specific in

15 the language of the plea agreement and the deferred prosecution

16 agreement that there would be no pretrial procedures and that

17 therefore there would be no restitution or consideration of

18 victim's rights. Pursuant --

19 THE COURT: What would you have the Court do? Not

20 accept the plea, go to trial, what?

21 MR. WIAND: Your Honor, I think the plea as it is I

22 think is something, for various reasons, is something that

23 couldn't be accepted. As it stands now, it would --

24 THE COURT: But the issue about whether or not you're

25 victim and whether or not you have restitution might be issues




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1

1 that you get to discuss, but do you get to tell them how they

2 get the decide how to plead guilty?

3 MR. WIAND: Well Judge, I think if you look at 3771, i

4 indicates that the government has an affirmative obligation to

5 confer with victims with respect to what is going to transpire

6 in the case. There were secret negotiations here we weren't to

7 participate in and I think if --

8 MR. DUROSS: Your Honor, I would object to it being

9 secret negotiations.

10 THE COURT: Hold on.

11 MR. WIAND: If you look at the In Re: Danecase, I

12 mean, it's very clear that the Government, at the time that

13 these prosecutions are brought and continued, have the

14 alternatives -- have the mandated obligation to go to victims

15 and deal with them to find their views.

16 THE COURT: But you have not -- you would not disagree

17 that in the traditional sense, the way the law views victimness

18 that you would not be at the top of the hit parade.

19 MR. WIAND: Judge, I think we cited to you any number

20 of cases that indicate very clearly that we are right in the hit

21 parade, and I ask you to look at the final case.

22 THE COURT: I didn't say "in it", I said "top of it".

23 MR. WIAND: There is nothing in 3771 that says you're

24 good victim or a bad victim. It says victims and it's victims

25 who have suffered harm as -- direct harm as a result of the




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1

1 conduct, and clearly we are there. And I invite the Court's

2 attention to the last citation in our brief with respect to US

3 Diaz, which is before Judge Martinez right now, that is a

4 bribery situation to sell goods to Haiti Telecom, and there

5 restitution and victim status is given to Haiti Telecom and the

6 government of Haiti. So you know, there's a little

7 inconsistency here.

8 Our concern with this matter is this is a large deal

9 for the Department of Justice. They've gotten a very

10 substantial fine and they've negotiated a transaction. But if

11 you read that transaction, part of it is giving away the

12 victims' rights. And the Victims' Rights Act, 3771 and 3663(a)

13 the Mandatory Restitution Act indicate that that's not for them

14 to do, it's not for the Court to do, that those are mandatory

15 rights and we're entitled to those.

16 Now, the agreement for the plea that is before Your

17 Honor does away with all those. So therefore, we object to the

18 plea. If they want to plead to the information the way they way

19 they say they're going to do it, and then the Court will then

20 determine the rights of the victims as is appropriate, well I

21 think that would be the case. But as Mr. Duross said, we have

22 form of plea here that's an up or down plea on its own terms.

23 If you accept that plea on its own terms, then you take away all

24 of -- any victim, in this situation's, rights, there will be no

25 restitution to any victim, and I have a difficult time reading




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1

1 the case law and the statute to indicate that that is an

2 appropriate result in any circumstances. So that's the reason

3 think this plea can't go forward. Otherwise, I understand Your

4 Honor's conceptual thing that if it was a normal situation of a

5 plea, that would be the case. But if you accept this plea, the

6 I think our rights are gone.

7 And also, Judge, with respect to the deferred

8 prosecution agreement that they ask you to accept, we have

9 outlined any number of reasons why that is inappropriate in thi

10 situation and why the acceptance of the deferred prosecution

11 agreement in the form that it is before this Court is something

12 that is inconsistent with justice. It presents -- if you look

13 at the standards in the McNulty memo of when these are supposed

14 to occur, hardly any of these standards were met. This was not

15 a cooperating company. This was a company that was brought to

16 the table by an inside witness who, Mr. Duross has stated before

17 Judge Seitz, broke the case open and showed them where the bone

18 were buried. The company continues to thumb its nose at this.

19 They have a lawyer in Costa Rica now saying they don't have any

20 responsibility for any of this and that is absolutely

21 inconsistent with the deferred prosecution agreement.

22 So that agreement in itself is something that I think

23 is inconsistent with what the standards are under the McNulty

24 memo and how these things are supposed to proceed, and I think

25 the Court needs to consider those standards because it's totally




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1

1 in your bailey-wick as to whether or not you want to accept the

2 preferred prosecution agreement. But with respect to the

3 convictions on the subsidiaries, those are 18 USC 371 pleas.

4 With respect to those, the law couldn't be clearer that it's

5 mandatory that we get victim's rights. And not only it's

6 mandatory that the Justice Department assist us. And now we're

7 in the odd situation of arguing against the Justice Department

8 and Alcatel trying to preserve our rights and the Justice

9 Department has never come to ICE at any time until we reached

10 out to them and tried to get them to talk to us. Still we've

11 had no discussion.

12 So that's the situation we're left in. I mean, there'

13 a plea before Your Honor, but it will totally undue our rights.

14 And with respect to the hearing situation on this Judge, 3771

15 says when these matters are filed they're to be taken up by the

16 Court forthwith.

17 I know that I was advised by the Probation Officer who

18 first had contact -- we contacted the Probation Officer several

19 times previously and he said we couldn't file anything. And it

20 was not the same Mr. Jenkins who is on the case now. Then he

21 contacted me a week ago Friday for the first time and said that

22 he had an affidavit he wanted me to fill out. And with respect

23 to the harm that had occurred here, the harm is a little bit

24 more significant and the description needs to be a little bit

25 more significant than an afternoon's preparation. So that's not




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1

1 something we can timely do. But I did tell him that we would be

2 filing this petition before the Court in order to seek our place

3 at the table as a victim and to seek our rights and to seek an

4 order of this Court directing the Justice Department to comply

5 with 3771 and look out for victims here.

6 So that's what brings us here in filing this motion.

7 It has been a situation of repeatedly going to the Justice

8 Department and asking them why we are not included as a victim.

9 We've sent them letters asking them to tell us why we're not a

10 victim, they've gone unanswered. It has been a drum beat of

11 requests for response to the status. The SEC told us -- just

12 wrote back and said "no, we're not going to consider you", and

13 there is nothing clearly in the statute or the case law that

14 indicates that we are not a victim. That given the case, we

15 have to be here on a motion or 3771 that is to be heard

16 forthwith.

17 I understand that from the Probation Officer, he did

18 share with share with me that both the Justice Department and

19 Alcatel had submitted to him for presentation to the Court

20 information contesting our victim status and we asked him to

21 share that with us or what the authorities were. And he said he

22 couldn't do that. And we asked Alcatel and the Government to

23 share that with us, and Alcatel never responded, and the

24 Government said they were conferring with supervisors, we never

25 heard anything.




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1

1 So this is a situation where there is a transaction, a

2 settlement transaction that had been worked out between a

3 company that wants to admit very significant crimes that

4 occurred over decades and the government, and it's been done in

5 a situation without any interaction from the victims, which is

6 required by 3771. And I think given that situation, we don't

7 think at this time, unless those pleas are changed, they can be

8 accepted in the form they're in and we think that if the Court

9 looks at the standards in the McNulty memo, I think the deferred

10 prosecution agreement is also something that would be

11 inconsistent with justice and it would be something that I thin

12 the Court should exercise its discretion and not accept.

13 THE COURT: Let me hear from Mr. Duross.

14 MR. DUROSS: Thank you, Your Honor. I had not planned

15 on arguing this today, but I'm happy to engage.

16 THE COURT: Well, this is where I am. There obviously

17 is some concern by this entity that they're not being treated

18 appropriately as a victim, and you obviously want to be heard o

19 that. I would like to know, just briefly, do you feel that --

20 do you think that, excuse me, that if the plea goes forward,

21 that they're not able to have victim status at all or

22 restitution?

23 MR. DUROSS: I believe, Your Honor, that the plea

24 agreements do contemplate the possibility of restitution. I

25 don't believe that the Defendants share that view. So when




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1

1 Mr. Wiand was supposedly quoting me, he was actually inaccurate

2 because I didn't say that was my position, just so you know.

3 Instead, I said that that's what I believe the Defendant's

4 position is, because I believe that the agreement does

5 contemplate the possibility of it. I don't agree that it's

6 appropriate here, but I do think that it has the possibility of

7 it.

8 I do want to address the 3771 issue, Your Honor,

9 because I think it's an important one, it's the one the Court

10 was just touching on, which is that while the Government doesn't

11 believe that ICE is a victim, for reasons I'll just summarize i

12 a second, under 3771, the rights that are normally reserved for

13 victims are rights and benefits that ICE has gotten, and gotten

14 in spades, from this Court, from Probation, and from the

15 Government.

16 They have, under 3771, the right to be reasonably

17 protected from the accused. That's not really appropriate here

18 that's sort of a violent crime case. So I think it's

19 inapplicable.

20 Number two, the right to reasonable, accurate and

21 timely notice of any public court proceeding or any parole

22 proceeding involving the crime of any release or escape of the

23 accused. I have provided to Mr. Wiand timely, reasonable and

24 accurate information about every public court proceeding in this

25 case. He claims that they go unanswered. I respond to phone




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1

1 calls, I respond to e-mails. There is a single letter that I

2 didn't respond to because I'd already talked to Mr. Wiand about

3 what our position was, and this Court directed us to work with

4 Probation regarding that position.

5 Three, the right not to be excluded from any such

6 public proceeding. Mr. Wiand has been in attendance, or one of

7 his colleagues, at every public court proceeding in this case.

8 He has been able to address the Court even when he wasn't

9 admitted pro hac vice. He was able to be here and be heard

10 every single time.

11 Number four, the right to be reasonably heard at the

12 public proceedings, which I just addressed.

13 Five, the right to reasonably confer with the attorney

14 for the Government in this case. I have returned his phone

15 calls, I've responded to his e-mails, I've responded to his

16 letters, save the one letter of March 10. In fact, when we

17 spoke back in late August, early September of last year and

18 Mr. Wiand said that he read the public disclosures by the

19 company about the resolution and that he wanted to apprise me

20 that ICE was a victim, I told him during that conversation, You

21 Honor, I don't see it. Based on our investigation, some of the

22 highest level people at his client's company were engaged in the

23 bribes, solicited the bribes. I'll get to that in a minute.

24 And I said, I don't understand how they could be victims. Could

25 you tell me. Could you plain explain it to me. Do you have any




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1 legal analysis that you could provide to me. He provided me not

2 one thing. Not one thing.

3 When this was publicly filed December 27th, less than

4 week later on January 4th, he sent me an e-mail.

5 Congratulations, he said. And now I'd like a victim ID number

6 and a PIN for my victim. I responded and I said well, I asked

7 you a while ago about that analysis because I wasn't sure about

8 it, but I'd welcome anything you have to say on that because I

9 just don't see it based on our investigation. And by the way,

10 checked with our victim/witness coordinator and foreign

11 governments, and instrumentalities of foreign governments don't

12 get victim ID numbers and PIN numbers. Nevertheless,

13 nevertheless, I will provide to you timely notification so you

14 can be heard. Yet he stands before this Court suggesting that

15 have not cared about their rights, the rights that I don't even

16 think that they're entitled to. And I take it personally. I've

17 been doing this job long enough.

18 Six, the right to full and timely restitution as

19 provided by law. In law. I don't believe they're entitled to

20 it, Your Honor, and I'm going to lay that out for the Court. I

21 think it's very clear. But they're entitled to the possibility

22 of it, not a guarantee of it.

23 They're entitled to the proceedings free from

24 unreasonable delay. There were some delays in this case, Your

25 Honor, but they were the result of me trying to consolidate the




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1 case after it was filed in late December. Ultimately it was

2 consolidated and there was a hearing before Judge Seitz, a

3 hearing at which Mr. Wiand had a colleague attend because I

4 provided them with timely, reasonable and accurate notice of

5 that hearing and at that hearing, Judge Seitz indicated that she

6 had just realized there was a conflict and that the case needed

7 to be assigned to a new court. That was assigned, and the Cour

8 had a hearing within one week so I don't think that's an

9 unreasonable delay. Another right that, while they may not

10 actually qualify for, was given to them.

11 And lastly Your Honor, eight, the right to be treated

12 with fairness and with respect for the victim's dignity and

13 privacy. I've treated Mr. Wiand with all the courtesies,

14 professional courtesies and the dignity his client deserves. I

15 have talked with him professionally and I have engaged with him

16 Because he doesn't like my answer does not mean I am not

17 treating him fairly. So let me just address very briefly what

18 I'm going to write a much more fulsome response to.

19 The Government's investigation, and the facts and

20 circumstances in this case, lead us to believe that ICE, as an

21 organization, was complicit in the rampant corruption by its

22 highest ranking officials. Let me be clear, Your Honor. In the

23 information that's been filed in both of these cases, it

24 indicates, though we anonymize the names, nearly half of ICE's

25 board of directors were soliciting and taking hundreds of




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1 thousands of dollars in bribes. Let that sink in. Nearly half

2 of the board of directors were taking hundreds of thousands, and

3 in some instances over a million dollars in bribes, which they

4 solicited. According to our key cooperator, that Mr. Wiand has

5 advocated on behalf of, he was the one who tells us that they

6 were being solicited. And in fact, they increased their

7 demands. According to our own cooperator, Your Honor, our own

8 cooperator, Mr. Sapsizian, who's involved in paying these

9 bribes, indicated that he believed that the company, ICE, was

10 soliciting bribes from other companies. So it wasn't just

11 Alcatel. This, by the way, is no defense to Alcatel.

12 Solicitation is not a defense to bribery, whether it be domestic

13 or foreign. But it certainly doesn't mean that ICE should show

14 up in this Court and ask for victim status.

15 In addition, Your Honor, what I want to make sure that

16 the Court is aware of, is while Mr. Wiand claims that I didn't

17 reach out to ICE and somehow I relied solely on Mr. Sapsizian as

18 part of my investigation because obviously he could do my job

19 better than I could, let me make something clear: The

20 Government has sought, through Mutual Legal Assistance Treaties

21 evidence and information from multiple law enforcement agencies

22 across the world, including Costa Rica. Mr. Wiand wouldn't know

23 that, nor would his client, because I can't call up ICE because

24 it would be a violation of the sovereignty of Costa Rica to call

25 up ICE and ask for information. We work through bilateral




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1 treaties, it's called the Mutual Legal Assistance Treaty, and we

2 do that, we did that with the government of France, and we're

3 working with France because it's a French company, and we've

4 also worked with Costa Rican law enforcement. We have had

5 healthy exchanges, we have exchanged information, we have

6 exchanged evidence, we've had personal meetings. I have even

7 made our witnesses available to Costa Rican law enforcement

8 officials. We have a substantial relationship. It may not mea

9 that Mr. Wiand is satisfied, or his client is satisfied, because

10 what they now want, apparently according to their most recent

11 filing, more than 1,300 pages, is apparently nearly a half of a

12 billion dollars in restitution. They said approaching 400

13 million, they say.

14 Now, our relationship with Costa Rican law enforcement

15 what I'm quite proud of, has resulted in serious and

16 significant, I think, achievements in tackling international

17 corruption. The Costa Rican government helped us with our

18 prosecution of Christian Sapsizian, and while I don't think that

19 he was our only witness, I do think he was a significant witness

20 in our investigation of the company to be sure.

21 We reciprocated and we assisted the Costa Rican law

22 enforcement authorities in their prosecutions of the former

23 president of Costa Rica who, within the last two weeks, was

24 convicted in Costa Rica for this exact same conduct, as were, by

25 the way, Your Honor, numerous former ICE officials who were the




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1 ones soliciting the bribes in the first instance.

2 So we have a very productive relationship. A

3 relationship, by the way, that resulted a year ago in the Costa

4 Rican government receiving $10 million in payments from

5 Alcatel-Lucent for reparations -- sounds a lot like restitution

6 -- to the government of Costa Rica, as opposed to ICE, this

7 entity that's here before the Court. And it's my understanding

8 at least, Your Honor, that ICE had a parallel civil suit against

9 Alcatel that took a year in Costa Rica, based on the exact same

10 conduct that's before the Court, asking for payments, and it's

11 my understanding that two weeks ago when the guilty verdicts

12 came down with regard to the officials, that ICE was not awarded

13 any money and that this matter is now on appeal. Mr. Wiand, I'

14 sure, can give you more details about that.

15 Regardless of the victim's status, Your Honor, let me

16 just address quickly what I think is the key issue here which is

17 restitution. I have to confess, Your Honor, this is all about

18 money and it's not mine. Regardless of whether this Court

19 determines that ICE, in spite of the fact that so many of its

20 officials were involved in the corruption -- and by the way, in

21 spite of the fact that apparently there's a UK businessman for

22 an insurance company that was just convicted last fall in the U

23 for paying bribes to ICE.

24 So let's just -- I just want to make sure that we

25 understand what's going on here and that the Government did not




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1 just suddenly ignore ICE's situation. In fact, it was principle

2 and the focus of what we did.

3 But let me talk about restitution because that's really

4 what this is about. It's not about whether or not Mr. Wiand ca

5 attend a hearing or whether or not he was able to reach me on

6 the phone or get an e-mail to me, it's about money. And there

7 are two very significant things I want to say about the money,

8 Your Honor. First, restitution cannot be speculative.

9 Restitution cannot be speculative. This conduct in this case

10 involves a corrupt tender process, meaning that bribes were paid

11 by Alcatel employees to receive business from Mr. Wiand's

12 client. Bribes that were solicited by some of the highest

13 ranking people that work for Mr. Wiand's client. There is no

14 way, it is not possible to go back in time and unring that bell

15 and unpack that tender process and figure out who would have wo

16 the tender and at what price. Not possible. In fact, because

17 was indicating earlier, Mr. Sapsizian says other companies were

18 paying bribes too. So how do we know who is going to win? The

19 entire process was corrupted, the entire bidding process is not

20 susceptible to being unpacked. We can't do it. It's not

21 possible. And the law doesn't require that we do.

22 In addition to being incalculable, Your Honor, the

23 process would unduly prolong and complicate the sentencing here

24 Exhibit A is what ICE filed last week. 1,300 pages of exhibits

25 many of which are in Spanish and only partially translated, and




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1 it is the subject of a litigation that just took place civilly

2 in Costa Rica for more than a year, at which at the end of the

3 day the court down there apparently couldn't decide what was

4 going to be due and owed. Our restitution laws, whether

5 mandatory or just the victim -- I'm not going to get the right

6 title. Whether it's under the mandatory -- the Victim and

7 Witness Protection Act or the Mandatory Restitution Victims of

8 Certain Crimes Act, both have provisions that say that this

9 Court should not engage in a process, does not need to engage in

10 a process, I should say, that would unduly prolong and lengthen

11 then the sentencing.

12 So we've got as evidence of that ICE's first filing,

13 which I assume is just the first volley; second, we've got the

14 fact that a year-long trial just took place to deal with these

15 exact same issues and then lastly Your Honor, in reading their

16 filing which, by the way, was the first time I was given case

17 law from the victim in spite of my request last September. In

18 reading it for the first time, they disclose that they say

19 things like hundreds of millions, and at one point approaching

20 400 million in damages. I read it and I would shudder to think

21 what would happen at a restitution hearing, because what they

22 ask for is mostly contract issues. These are civil contract

23 remedies that they want, Your Honor, which is the subject of a

24 lawsuit between a Costa Rican customer of a company that was

25 doing business in Costa Rica that was the subject of a




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1 litigation in a Costa Rican court. And what they ask for, for

2 example Your Honor, is they say that Alcatel-Lucent never

3 satisfied contract obligations. The services were not rendered

4 Hardware that was inferior or not delivered. How this Court, o

5 the Government, is going to be able to determine whether

6 something was inferior as a product or a service is beyond me.

7 And by the way, the law doesn't require that we figure it out.

8 They talk about unfinished or inoperable

9 telecommunications networks. So now we're going to call in a

10 series of experts, whether it be from Paris or San Jose, to come

11 into this Court and try to describe to this Court and the

12 Government and the Probation Office what is inoperable, what is

13 a good system, what's a bad system?

14 Lost income, they talk about. Failure to perform as

15 specified under the contract, Your Honor. Purchase of

16 additional equipment and remedial services to ameliorate the

17 widespread deficiencies. I don't know whether they were

18 widespread deficiencies or not. Maybe Alcatel performed

19 perfectly and this is a contract dispute between them and ICE,

20 maybe they didn't. But it's not the subject, not the proper

21 subject for restitution in this case.

22 And lastly, Your Honor, they talk about other vague

23 expenses such as participation, investigation, prosecution and

24 attendance at criminal proceedings. One of the cases they cite

25 they talk about attorneys' fees. Now, I assume that that's a




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1 reference to Mr. Wiand and his firm. It's got nothing to do

2 with me. I have no idea what their relationship with ICE is,

3 whether it's contingency arrangement, whether they plan to pay

4 it out of the restitution proceeds. Again, it's all about mone

5 and it's not mine, but I have certainly done my job and

6 diligence in trying to figure this out. And I have talked to my

7 superiors and we've considered this matter thoroughly within the

8 Department and we've thought about it long and hard.

9 And lastly let me just say this, Your Honor, with

10 regard to the resolution. Now, Mr. Wiand criticizes -- and

11 again, I was planning on doing this all in my paper, but I'm not

12 going to sit there quietly as he criticizes me and not say

13 anything in my own defense. He says that we didn't prosecute

14 enough Alcatel employees. That's easy for him to say. By the

15 way, the Foreign Corrupt Practices Act does not permit us to

16 charge Mr. ICE's (sic) client's officials. We're not allowed to

17 reach foreign officials. Doesn't mean they're suddenly victims

18 because we can charge them under the Act.

19 And by the way, 3771 does say specifically "a person

20 accused of the crime may not obtain any form of relief under

21 this chapter". And as I said earlier, Your Honor, we believe

22 that given the pervasiveness and the length of the corruption

23 that existed within this company, his client's company, we do

24 believe they were, at the very least, partially responsible for

25 what was going on here.




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1 And I want to make something else clear. It doesn't

2 mean that ICE today is not a different company. I suspect that

3 they are. I think that they're probably a much better company

4 as a result of the scandal and corruption that exists. I think

5 they attached as one the exhibits, among the 1,300, something

6 that says they've got a new code of conduct and ethics. I thin

7 that's a great thing.

8 So everything I say here today is not what Mr. Wiand

9 had said in his pleading, which is it makes me an imperialist

10 who thinks all Latin Americans are corrupt because I think his

11 client is not a victim. I find that insulting and I think it's

12 demeaning to this Court and these proceedings for him to suggest

13 that in his pleadings without basis. And if it sounds like I'm

14 upset, it's because I am. I've been called a lot of names and a

15 lot of things. And my wife may say I deserve at least some

16 criticism, but not the kind that Mr. Wiand has suggested in his

17 pleadings.

18 THE COURT: Mr. Duross, this is what I'm going to do

19 and I'm seeing that the defendant's counsel about to stand. I'm

20 going to set a plea date. I'm going to allow the alleged victi

21 to make their argument, you've already started the process with

22 Mr. Jenkins from the Probation Department, he has the

23 information.

24 So Ivan, will you give us a plea date please?

25 MR. WEINSTEIN: Your Honor, could --




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1 COURTROOM DEPUTY: June 15th at 2:00 in the afternoon.

2 MR. WEINSTEIN: Your Honor, may I be heard on the

3 scheduling because I have --

4 THE COURT: Sure.

5 MR. WEINSTEIN: Your Honor, before I go to the

6 scheduling, I'm not going to take a lot of the Court's time, but

7 the Court asked some questions at the beginning that I want to

8 make sure that I answer on behalf of Alcatel and the various

9 entities.

10 Your Honor, we have entered into this plea agreement

11 with the United States, after many years of discussion. I don'

12 agree with any of what Mr. Wiand has said about lack of

13 cooperation and secrecy and all that other stuff, but I think

14 the Court has probably heard as much as they want to hear about

15 that today and probably then some.

16 We intend to enter pleas of guilty pursuant to those

17 agreements. We want to do that pursuant to these agreements.

18 I've spoken to the general counsel and the general counsel is

19 available, I don't know if this is helpful, on May 25th and/or

20 June 1 to enter those pleas.

21 I have no idea about June 15. I have a little boy who

22 is going to -- one of our children is having some surgery, and I

23 want to check to make sure that I can be available for that.

24 That's obviously important.

25 I did want to say we talked to the Court -- we talked




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1 about the 25th of May, the 1st of June, I throw that out there.

2 THE COURT: I think June 1st might work. I was giving

3 the long date for other reasons.

4 MR. DUROSS: Fine with the government, Your Honor.

5 THE COURT: All right. We'll see everybody back on

6 June 1st.

7 MR. WEINSTEIN: Thank you.

8 I'm sorry, Your Honor. I'm being reminded by my

9 colleagues that I have a specific request for you. The filing

10 by the folks at ICE were quite lengthy. I know the Court's

11 rules allow me 20 pages. May I have an additional 18 pages to

12 respond, which is the equivalent of those --

13 THE COURT: I think you can work it out in 10. You ca

14 get ten extra.

15 MR. WEINSTEIN: Very good. That will be ideal.

16 THE COURT: Also counsel, normally I don't do this, I

17 am very computer savvy, at least my staff makes me computer

18 savvy. If anybody is going to have another filing that's like a

19 thousand pages, send me a courtesy copy. Okay?

20 MR. DUROSS: Yes, Your Honor. I don't intend to.

21 MR. WIAND: That sounds like my fault, Judge.

22 THE COURT: It was 1,000 pages.

23 MR. WIAND: But I think unfortunately the local rules

24 say don't send courtesy copies.

25 THE COURT: They don't, but that's why I'm specifically




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1 saying file it, file it and then send by regular mail you're

2 correct. The local rules do not envision a courtesy copy. But

3 on the Court's direction, if you're going to have anything over

4 100 pages, please, courtesy copy. All right?

5 MR. WIAND: Thank you, Your Honor.

6 MR. WEINSTEIN: May I ask what time of the day on the

7 1st of June?

8 THE COURTROOM DEPUTY: Two.

9 MR. WEINSTEIN: Very good. Thank you, Your Honor.

10 We'll see you then.

11 MR. WIAND: Your Honor, would you set a time for the

12 response to this? Are they going to have 10 days?

13 THE COURT: They're going to have 10 days. That will

14 be the 13th. Well, we just did it. I'll give you until next

15 Monday which is the 16th.

16 MR. DUROSS: Could I have until Wednesday?

17 THE COURT: Wednesday is the 18th?

18 MR. DUROSS: One week from today?

19 THE COURT: All right. Wednesday the 18th.

20 MR. DUROSS: Thank you, Your Honor.

21 THE COURT: All right. Thank you very much.

22 (PROCEEDINGS CONCLUDED)

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2 C E R T I F I C A T EC E R T I F I C A T EC E R T I F I C A T EC E R T I F I C A T EI certify that the foregoing is a correct transcript from the

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transcript of change of plea and sentencing before the honorable marcia g. cooke united states...

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