Executive's Conviction for Obstructing Price Fixing Investigation Upheld

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The U.S. Court of Appeals in Philadelphia last week upheld the conviction of a foreign executive in the carbon products industry for conspiring to obstruct a grand jury investigation into price fixing in the industry.

On appeal, the defendant challenged (1) the sufficiency of the evidence supporting the conviction, (2) two purported fundamental errors in the jury instructions, and (3) the denial of the defendant's asserted attorney-client privilege.

A grand jury sitting in the Eastern District of Pennsylvania returned a four-count indictment in 2004 against the former Chief Executive Officer of the United Kingdom-based Morgan Crucible Company. According to the indictment, the defendant, a U.K. citizen, conspired to fix prices with competitors and engaged in a scheme to mislead and obstruct a U.S. grand jury investigation. The individual was extradited from the United Kingdom; however, pursuant to the extradition order, he could not be prosecuted on the price fixing charge (Count One).

At trial, the defendant was convicted of violating 18 U.S.C. Sec. 371(Count Two) by conspiring to violate 18 U.S.C. Secs. 1512(b)(1) and 1512(b)(2)(B). He was acquitted on Count Three, alleging a violation of 18 U.S.C. Sec. 1512(b)(1) for corruptly persuading or attempting to corruptly persuade other persons with intent to influence their testimony in an official proceeding, and Count Four, alleging a violation of 18 U.S.C. Sec. 1512(b)(2)(B) for corruptly persuading other persons with intent to cause or induce those persons to alter, destroy, mutilate, or conceal records and documents, with intent to impair their availability for use in an official proceeding.

He was sentenced to 18 months of imprisonment and three years of supervised release. The court also imposed a $25,000 fine. The defendant's timely appeal followed.

Viewing the evidence presented at trial in the light most favorable to the government and construing all available inferences in the government's favor, a rational trier of fact could certainly conclude that the defendant corruptly persuaded others with intent to influence their grand jury testimony, the appellate court ruled. With respect to the jury instructions, the trial court did not err by refusing to adopt the defendant's proffered instruction regarding the meaning of the statutory language “corruptly persuades” or by failing to identify for the jury the overt acts alleged in the indictment.

Attorney-Client Privilege

Finally, the appellate court ruled that the trial court did not legally err in permitting counsel for the defendant's employer to testify at trial. The defendant had failed to establish that a personal attorney-client privilege protected his communications with the attorney.

The March 23, 2011, not-for-publication decision in U.S. v. Ian Norris, No. 10-4658, will appear at 2011-1 Trade Cases ¶77,390.