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by Edmond Geary

White Collar crime investigation continues undercover

Once the province of drug distribution and mob investigations, the use of clandestine recordings and undercover informants is increasingly used by the feds in white collar crimes. Some of the Wall Street prosecutions have featured wire tap evidence.  Now added is investigation into payoffs in foreign countries.

Investigation techniques by the F.B.I. into overseas bribes has come to light in a prosecution in the U.S. District Court in Camden, N.J.  Joseph Sigelman is on trial for violation of the Foreign Corrupt Practices Act for acts he is alleged to have committed in the Republic of Columbia.  To obtain evidence against Sigelman, in Miami, the F.B.I. ran an alleged co-conspirator of Sigelman’s into talk to him, to record the conversation, to obtain incriminating admissions.

The undercover witness, Gregory Weisman, was the former general counsel for Sigelman’s company. They talked about what they had done in Columbia to get contracts for business in Columbia for Weisman’s former company PetroTiger, Ltd., who was or was not paid and what connection it had or did not have to do with obtaining contracts.

Because Weisman had served as general counsel for Sigelman’s company and even served sometimes as Sigelman’s personal lawyer, this past relationship of attorney-client raised a question for me about the validity of the government’s use of Weisman as their secret agent against Sigelman. The government will surely claim they were co-conspirators in the enterprise rather than in an attorney-client relationship, but you can bet Sigelman’s criminal defense lawyer will attack whatever evidence Weisman collected covertly.

Mr. Sigelman invited to his Miami condo Weisman, wearing his concealed camera, in 2012, after Weisman insisted on telling him something but telling it only in person.

Prosecutors claim $333,500 was paid in bribes.  They claim it was intended for David Duran, an official of the state-run oil company in Columbia, Exopetrol, to help obtain a contract worth $39 million.

Sigelman didn’t seem to remember the deal very well in the recording.  He said they never even submitted a bid, but Weisman was always more sure, either because he was more involved in carrying out the transactions or he wanted Sigelman to incriminate himself in the conversation.