The FCPA specifically makes illegal consciously avoiding the actual knowledge of the underlying crime. The legislative istory of the FCPA makes clear that Congress intended that the so-called "head-in-the-sand" defense - also described as "conscious disregard," "willful blindness," or "deliberate ignorance"—should be covered so that company officials could not take refuge from the Act's prohibitions by their unwarranted obliviousness to any action (or inaction), language or other "signaling device" that should reasonably alert them of the "high probability" of an FCPA violation.
This interpretation was confirmed in the criminal case of Frederick Bourke. Bourke had invested in an enterprise in Azerbaijan and it later turned out this enterprise was engaged in bribery and corruption to obtain certain oil and gas rights. Bourke was not a part of the management team that engaged in this bribery and corruption, yet at trial, prosecutors contended that Bourke had "stuck his head in the sand" and consciously avoided clear red flags that corruption was going on. Moreover, even if Bourke did not affirmatively know that bribes were being paid, he was aware of a high probability such action was occurring and he consciously and intentionally avoided confirming this fact. In the jury charge, the Court explained this “conscious avoidance” could be equated to actual knowledge under the FCPA.
A recent Fifth Circuit Court of Appeals decision in US v. Uzoaga, upheld the legal concept of deliberate ignorance in a health-care fraud conviction. In this case, the defendant claimed there should not have been a “deliberate ignorance” instruction in a conspiracy case. In its ruling the Court held that the deliberate ignorance instruction “may be given only where the defendant argues she did not have actual knowledge of the guilt and the evidence at trial supports an inference that the defendant remained deliberately ignorant.” The Court held the evidence at trial supported the government’s allegations that the doctor (1) knew there was a high probability of health care fraud and (2) purposely avoided discovering the illegal conduct.
The Uzoaga case mean that the conscious avoidance theory used to convict Frederick Burke is alive and well in other types of fraud cases. It will be interesting to see if this Justice Department uses it going forward in more FCPA cases.
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