The Berko Verdict with Mike Volkov

Speaker A: Hello, everyone, this is Tom Fox. Welcome to the award winning FCPA Compliance Report, the oldest podcast in compliance. Today I'm thrilled to have back with me my good friend and colleague Mike Volkoff. And we're going to take a deep dive into the Asante Berco FCPA guilty verdict. Yes, we had a guilty verdict against an individual at a trial. Mike is a former federal prosecutor, so we lean on his experience to talk about why this case ever went to trial, the plethora of evidence presented, DOJ steps and defense steps that didn't work, and what it all means for compliance. And now, Tom and Mike Volkoff. Hello, everyone, this is Tom Fox back again for another episode. And I'm absolutely thrilled to have back with me my good friend and colleague, Mike Volkoff. Mike, first of all, welcome back.

Speaker B: Tom, great to see you. Always good to see you. And always good to catch up on the latest in the FCPA space and compliance.

Speaker A: So, Mike, we had a rare FCPA individual trial conclude last week. Asante Burko and I want to start with the jury verdict, which came down in three hours. I've tried a lot of cases from the civil side, none from the criminal side. And I want to start with what does it mean when it takes the jury three hours to reach a criminal decision verdict decision.

Speaker B: That means, number one, the case was overwhelming. Number two, the defense didn't even cause the jury or any juror to pause. And from what I've read about the case and sort of reviewed some of the evidence, it was a pretty strong case. So my question right off the top is, is why did he go to trial? This case had evidence, Tom, of it was like, you want to go down the checklist of FCPA evidence you can use at a criminal trial? It ticked every box, including 15 hours of recordings that they fought over admissibility about, including a video of a lunch where. And in these, everything was to talk about the bribe and the bribery scheme and everything was pretty out there and open in many ways. So I don't get it. The defense that was run in this case was clearly a situation where the defense recognized they had a really uphill climb. And if part of your defense is, wait a minute, this is a legitimate business transaction in this scheme and this is the way business is done overseas. You're in trouble because the jury instructions make it clear this is not the way to do business. This is a federal crime in the United States.

Speaker A: So, Mike, there were a lot of emails and I know you have tried criminal cases, and emails I think are more Circumstantial evidence, although perhaps they can be direct evidence. But when you have email trail, but you can couple it with a video, how much more powerful that does that make a video of the defendant? How much more powerful does that make it for the prosecution?

Speaker B: See, here's some general, uh, general rules. When you have people on tape that in a wiretap case, for example, that is definitely overwhelming. One of the strongest pieces of evidence in that context, and I think it occurred here too as well, was an email which said, hey, don't email me here about the scheme. Write my private. We're doing this on private email. So, for example, on a wiretap, when you get somebody who says, hey, don't call me here, or don't talk about that, or whatever type of evidence, it's really powerful because it's human. Humans relate to that of fear. Ah. Oh, don't say that. Don't do that. And it corroborates everything. Now, I will say this. They didn't even look, they used. I love the one thing they used as coded language was we're still waiting on the holy rain for a bribery payment. And, uh, there wasn't much that was holy about it. But using expressions like that is basically a way to go after, a way to just reveal your corrupt intent. So the defense stands up, they say, look, this happens. This is the way business runs. There's no corrupt intent here. What we would call this case, and I'm sure the prosecutors called it, is when you have really strong evidence, you call it a, uh, slow plea. We're going through a slow guilty plea, okay. In the sense that the evidence is so strong, we're just putting it on, and this is like, it's a plea. The guy has no way out. What I don't understand is I would have done everything in my power to get this guy to plead guilty and just tell him. Because now there's no doubt in my mind that the judge will give him a sentence that's going to reflect the fact that he went to trial in a case that's so overwhelming. And the defense argued everything they could pretrial to exclude various categories of evidence. But I even think without the recordings, they would have gotten a conviction. The emails themselves were pretty devastating as well. And the fact is, one other really strong piece of evidence, and we should have mentioned this in the beginning, was that Goldman came in and caught him and stopped the transaction. And here's Goldman, which, by the way, you know, this wasn't Malaysia, thank goodness. But they came in and they stopped it. So they caught him, they turned it over to the government and did a disclosure about it and ended up not paying for this. But that's pretty good evidence too when you have your compliance team as witnesses to.

Speaker A: We discovered this and that was another point I wanted to raise. The Goldman evidence is that almost an independent cooperating, not cooperating but corroborating witness coming in I and testifying.

Speaker B: Yeah. And I think it in some respects having the company's witnesses to me is a really strong piece of evidence. You're not relying they had cooperating witnesses. You're not relying on somebody with a deal. Now of course the cross examination of uh, the Goldman people would sound something like, okay, you brought this in. Goldman, you know, brought this to the government and Goldman got a huge benefit out of this. Goldman didn't have to pay for it. But you're talking about a, uh, I'm sorry to say this, a lowly compliance person who didn't benefit from this other than hey, maybe a good job, way to go. But they didn't benefit materially from doing it. They were doing their job and they were probably proud of it when they testified. And we both know people from Goldman, Goldman has some excellent, really well established uh, compliance people. They had problems in Malaysia, but here in Ghana this was an example of how compliance should work.

Speaker A: Mike, there was one direct examination which brought a very swift objection to the defense counsel. And I just want to read this to you because the first time I read this I thought, and it involved the Goldman witness. I thought this could even be reversible error and I thought it could be reversible error except that there's so much the overwhelming weight. So let me just read this section to you and get your response. So at one point in the direct examination of the Goldman witness about her company's compliance training and policies, a routine line of questioning by prosecutors in white collar trials to show defendants were warned about particular misconduct. Prosecutor pulled what the author of this piece from Law 360 called quote, a fast one, end quote, and asked if this case had been used in Goldman's compliance training, which the Goldman witness confirmed with the following answer. It was used as an example of what not to do as a Goldman Sachs employee. Now that answer drew a swift and immediate objection from defense counsel and the court immediately sustained the answer with the response that answer should be disregarded. As I said, when I first read that, that struck me. That's pretty out there. I'm sure it was the subject of a motion and limine but because of the overwhelming weight of the other evidence we talked about, the email trails, the coded messages, and certainly the video. But how. Uh, that struck me as an incredibly powerful moment. And you can't unhear that if you're the jury.

Speaker B: Yeah, that's. I agree with you. That'll probably be raised on appeal for prosecutorial misconduct.

Speaker A: And.

Speaker B: But I think the thing that will save the government is the overwhelming strength of the case. It's almost. It's almost like saying, did you internally find him guilty? Yes, we internally found him guilty. That's what it's saying. And there was another. And I don't know if this evidence came in, but, for example, what about. Was it insinuated somehow, was it implied that Burko had resolved the SEC case, the civil case, and agreed to disgorge some of the money in that case? Now, of course, it was an SEC settlement, which was not an admission, but I wonder if they snuck in somehow or implied somehow the fact that he did agree to give some of the money back to the government. And I'll tell you what, those two things that we've just highlighted are areas that you don't need to go when you have a strong case. Just play the case out and run with it and go with it. The other. Those are interesting things, I think, though, as if I'm the prosecutor putting on this case. The one thing you gotta explain somehow, and I know this doesn't sound like it's a major point, is why did it take so long to bring this guy to trial? We indicted him way, way long ago, and it's 2026, and why are we sitting here? That's if I'm a juror. I'm sitting there going, where have you guys been? Why didn't we bring this case? But then, look, they indicted him under seal. The SEC comes out, and then how long did extradition take? It took a long time, and I bet you they had. When they put the case agent on in some respect, they had to explain that without going in, without any prejudice to him. In other words, he didn't try to run away. And we grabbed him and we had to extradite him. It had to be that. This is the way the legal system works. When you apprehend somebody overseas, it takes time to bring them through the system. And I think he was, as I recall, was he extradited from the. From the UK and that. Look how long even that took. And we're supposed to have a pretty good relationship there. And so I would think the jury would say wait, it's 2026, what are we doing here? And but uh, I think that, I'm sure the government explained it somehow.

Speaker A: You raised the issue of the civil SEC settlement. Does that, is that admissible at all?

Speaker B: I don't think it is. I would argue it's not admissible at all because first off now the interesting issue would have been what if it was an admission the SEC settlements where you had to admit your. But this was a no admission settlement. But he did turn the money back over. He paid, uh, he disgorged ill gotten gains. Now I'm sure there was no reference to it. If I was the defense I'd say I don't want like you're saying the motions in limine pre trial were going to be pretty significant about I don't want anything about extradition or that he resisted coming to the country. I don't want anything about the SEC case. I want this to just be a clean what happened type of case. But so that was probably all fought and they did. And there's another interesting technical issue which I don't know the answer to because the transcripts, ah, you know, know are not available at least at this point is how did they get the recordings in if one of the persons who may, I don't know that the, the human source or the informant testified. If the informant didn't testify and you have these recordings, how do you authenticate them? Now you can use an agent to try that but apparently there was a lot of pretrial litigation over the admissibility of the recordings and I bet you that's an interesting issue and I bet you they preserved it for appeal. But this guy's going to lose on appeal anyways. And to me the interesting question is how heavy a sentence is he going to get? I suspect around four to six years imprisonment coming up for him.

Speaker A: Actually I was going to opine even longer based on Eski which I just having to reread for other reasons. I could certainly not much longer than yours but I could see a seven year sentence.

Speaker B: Yeah, that could. Look it depends on I don't know the judge and the judge's reputation but the Eastern District of New York, Brooklyn is not known for handing out light sentences there. There's some pretty tough judges there. They see a lot of different crime. I just feel like, I know we're not supposed to say that there's a trial penalty but there is a trial penalty and the judge is going to impose some of the trial penalty. I feel Though that defense counsel, if I had been in their position, I would have been on top of my client, advising him every moment of the day to seek a plea. And I don't care if I would have walked in and told them, plead to the indictment, because you're going to. You need to get some consideration by the judge of something that you can pull down on your sentence and what sentencing range you may get. Because the defense here, you really didn't have many options, frankly. They lost the case in pretrial motions. Once the recordings come in, you're in trouble. And getting the emails in. The emails here were not cryptic. The emails were pretty blatant. They also did a, um, real. And this is actually good for everybody to look at as an issue. They did a tremendous job in tracing the money. And apparently they put on like really rock solid evidence with diagrams and everything that made it simple for the jury to understand how shell companies were used, the path of the money. There was apparently like a day of testimony about the money and where it went and how it moved. And that evidence unto itself, Tom, can be really powerful, especially when you're talking about a million dollar bribe and the money that he got himself, that he made off of this. He made 2 million or something like that off of this. And then he paid some of his own money personally to pay some of the bribes. And then that's because he was making so much money to begin with. But here, when you. I can remember when I did a terrible, uh, violent gang case nine months in front of a judge, and when I put on evidence about the money they made and the trips they took with the drug money. And I'll never forget, a guy's on the stand and has a shirt or guys on the stand and talks about how they went to a store at Neiman Marcus and made. Spent $2,500 on a tissue paper shirt. It was like a light linen. And the jurors hated that. Uh, but you know why? They're working 40, 50 hours a week for their livelihood. And they see these guys wasting money. So I can imagine some of the jurors in Brooklyn, they see the money that's going on here and they say, and I'm killing myself to survive right now. And this guy is just floating around in this money. So I think there's a lesson there in the tracing of money. The knowledge of shell companies. And uh, the compliance team must have been onto this very early on. The ability to show your due diligence work, let's say, show how you Trace the money, show how these people had red flags and that they started to look into it, and then that there was a part of the effort that the Goldman Sachs compliance team did on the financial aspect of it. And I think that was powerful evidence in the end as well. So every, every box is ticked here, Tom. Okay. If you and I were caught like this, we're in trouble. You and I are. You probably rat me out in about five seconds. You'd say it was all Mike, and I'd say, no, it was all Tom.

Speaker A: Everybody know you'd be the brains of the outfit.

Speaker B: Uh, they knew I'd be the corrupt one. That's what they would know.

Speaker A: So, Mike, what do you do if you have a client who the SEC investigates, How can you try to resolve it with the SEC so they don't get criminally indicted? That's the thing that I found so odd about this, that the SEC would settle and that the defendant, now erco, would do it without getting some sort of closure with the doj.

Speaker B: Yeah, now that's a good. That's a good question. Who represented him at the SEC stage and, and agreed to the disgorgement? And Burko said, yeah, I'll give the money back and I'll fight the criminal case. I would have looked for a package deal. Right, that's what you'd look for is I'll resolve, say, to the Justice Department, give us some credit for resolving the SEC case and give us a better deal, and we'll work out a deal here. Something did not connect in, uh, either the client didn't really fully understand the impact of all of this. And then, uh, after he was convicted, he probably looked around and he said, wait, what happened? Am I. Wait, I'm guilty? Like, he didn't really fully understand what he was doing here because, uh, there's no way I could have ever believed I was going to get off. But going back to the SEC part, what's interesting to me, they indict him. They put it under seal, the sec, I think, as you recall, Tom, they didn't keep their complaint under seal. They filed the complaint against him. And he wasn't even subject to their jurisdiction at that point, but maybe they accepted service. He was overseas. They would have had to gone through the Hague Convention or whatever to serve him. And he resolves the case. They know that the criminal case is coming or there. They had to have known it. They did not. No lawyer worth their salt would say, uh, okay, here's an SEC case. You don't have to worry you're not getting prosecuted criminally. I had the same situation occur in a different context where a Guy gets an SEC complaint and you call up the U.S. attorney's office and they say, we can't talk to you. We don't have anything to say to you. But I know there's a criminal case there. They're just waiting to apprehend him overseas. And what happened to my client? He goes to Switzerland. They get, uh, they arrested him. Okay. And now he has that criminal and civil case. And I. What happened with Berko when they were well aware of the SEC case. So he knew the criminal was coming. He had to have, uh. And that's when you try to resolve both of them. That's what people normally do. Look, this is the first trial we've had. There was the trial in Texas, right? There was, uh, yeah. In Houston before this. But that was with some unfortunate judge. Right? The.

Speaker A: Well, I wouldn't call him unfortunate.

Speaker B: Yeah, he like he was. I thought there was a judge who threw the case out.

Speaker A: No, uh, what he did was he reversed the jury verdict based upon illegally introduced evidence.

Speaker B: Wow.

Speaker A: Kenneth Hoyt was the judge.

Speaker B: Uh, okay, then that's a different story. If there was illegally obtained evidence and.

Speaker A: Well, I shouldn't say that. So the evidence there was a FCPA charge and a conspiracy charge. The evidence was admissible in the conspiracy charge, but at trial, the government dropped the conspiracy charge until the evidence became inadmissible. Uh, let it in anyway. Defense counsel pointed that out in post trial motions and the judge said, you're right, it shouldn't have come in. I'm reversing. Wow.

Speaker B: Are they going to try the case

Speaker A: or that the DOJ has filed for that in the fifth Circuit? Uh, he, he rendered verdict, uh, not guilty verdict. Wow. Because he said without that evidence, there was no evidence of. Under the fcpa.

Speaker B: The most significant trial we had before this was really in the one MDB case in Malaysia, the Malaysia scheme. And that was in either the uh, Southern or Eastern. Southern District of.

Speaker A: Southern. Southern, yeah. Roger Ng.

Speaker B: Um, yeah. And now that was a heck of a trial. This case that was hard fought trial. This was hard fought, but I don't think they had as good, good a case in terms of the defense. In the Malaysia case, one mdb, you had like a cooperator with a lot of baggage and he was a higher up guy here. They had cooperators, but they didn't have like the orchestrators or Berco was the one who ran this thing. So they had the right Guy on trial, that's for sure. In terms of.

Speaker A: So what, are there any lessons we could tease out for the compliance professional? Mike, is like, for instance, you mentioned the, I'm not going to say off channel communication because it was email communication, but it was a Gmail account. I believe it could have been aol, one of those services. Is there any way for compliance or a compliance team to be able to monitor that? Or is that something outside the ability right now, even today?

Speaker B: I think one important lesson here is, look, let's think about how compliance found this. This deal had to go up through some kind of due diligence and then there were screaming red flags around this. But in terms of monitoring email traffic, to me, any email where you have some indication of, hey, write me on my private account or anything that's coordinating with another account. And I don't know how you would find that with search terms or AI these days, but I would look for that as a big red flag. Any communications where there's a, uh, WhatsApp message, let's say that says, hey, write me on this line. Not this line, but I will say this, people are doing more monitoring. And I just was reading in the Wall Street Journal about how monitoring of internal communications is increasing in today's world, and I think there's a compliance lesson in sampling or just checking on internal communications and the use of internal communications and sampling. You can't read everything, uh, you can't intrude on everything, but you certainly can sample. And if you find something that looks fishy, keep going, do some more sampling and look at it. I think the other thing here, the other lesson for compliance folks is I'm sure that Goldman people saw the red flags. And if something smells fishy, it probably is fishy. And don't back down on a deal that probably people want to push through. And this is a sign where the compliance team stood up and got something done. And, and I hope they received a lot of praise and reward for the great work that they did here because they saved Goldman millions in legal fees and millions and probably they would end up having to pay the government if they had been liable or this thing had gone through and they detected it later. So I think there's gotta be due diligence around the deals, monitoring for red flags and making sure you resolve these red flags in an objective way, in an independent way. So I'm sure if we read through the file and saw what compliance did, Tom, you and I would be really impressed with what happened.

Speaker A: Mike, I'd like to end by asking about the pre trial work and you've mentioned that several times in this case. Could you say a few words about the importance of uh, not simply discovery in pre trial, but preparing your case to go to trial and educating the judge about potential issues that either he or she may have to rule on at trial or if not even in pretrial. And how in many ways in this case maybe as good as example of any. What happens in pretrial really dictates the outcome at trial.

Speaker B: Yeah, prosecutors always say you either win or lose your case actually pre indictment in what you put together. But you. This was a case where the defense clearly had to fight pretrial various issues in the hopes of knocking out some of the evidence. What they apparently there was a lot of litigation over the admissibility of the recordings because they realized that the recordings were going to be powerful and the government used excerpts of the recordings and a video of the lunch. And I think that was really critical for the defense to win. There also had to be lots of motions in limine like you're talking about and you raised early on about issues that are irrelevant and prejudicial, such as extradition. But more likely what the Goldman Sachs compliance team concluded. And frankly there's a way to get across uh, some of the things without Goldman taking that witness and saying did you find him guilty? No, but they could have brought in the fact that Goldman turned the evidence over to the Justice Department and that tells you that Goldman thought he was guilty. But any event, I think there were lots of issues like that. And uh, frankly you want to do that not only to try to sort of knock out pieces of the government's case, but also to preserve for appeal some issues that you may have a chance in persuading somebody on the court of appeals on. I don't see a lot of appellate issues here unless there was something blatant misconduct in a closing argument or something like that. But you're not going to. I'd be surprised here. This is a case where the government puts it on and, and you don't take any risks because you got an overwhelming case. Frankly you just sit there and it's like playing a symphony after you've written it. And they probably enjoyed it and enjoyed the uh, fight but there was a lot of pretrial maneuvering around this and I think that's probably because they recognized if they get to trial, they probably lost the case if they can't knock out any of this. So. But an interesting case. Lessons learned for all of us that the Justice Department may not be bringing a lot of corporate cases, but they certainly have a string of individuals who are facing real, real liabilities here.

Speaker A: Fortunately, we are near the end of our time for this episode, but before we leave, I wanted to ask you if any of our listeners want to connect with you, what would be the best way to do so? And then tell us about your podcast.

Speaker B: My podcast Corruption, Crime and Compliance. And I've been enjoying that a lot. Had great witnesses on witnesses, had great guests on. Severin Wirtz was just on talking about fcpa. History of fcpa. I thought that. And I know you've had him on what a fascinating story about the fcpa. Great book. He's written the definitive story of the FCPA in my mind and I read it and I thought it was a great book. But yes, I have my regular podcast guests and, and sometimes I pontificate just by myself. And those are, uh, it's great. I've got the blog still going Corruption, Crime and Compliance. And we got a YouTube channel of Volkov Law TV which is. I put up my webinars everything so that people can use them as a resource. But it's great.

Speaker A: Always a pleasure. Thanks so much.

Speaker B: All right.

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