by Hector Correa Gaviria and Berke Gursoy
Left to Right: Hector Correa Gaviria and Berke Gursoy (photos courtesy of authors)
On September 1st, 2023, District Court Judge Pamela Chen delivered a startling decision, overturning the honest services fraud convictions of Hernán Lopez, former Fox executive, and FullPlay Group, S.A., an Argentine sports marketing company. Lopez and FullPlay were convicted of federal wire fraud for bribing employees of the Fédération Internationale de Football Association (FIFA) and CONMEBOL (the South American soccer federation under the umbrella of FIFA) to secure lucrative broadcasting contracts for some of Latin America’s most prestigious soccer tournaments and World Cup qualifying matches.
In United States v. Full Play,[1] a federal jury found that Lopez and FullPlay used U.S. wires to defraud FIFA by depriving the international soccer organization of the right to its employees’ faithful and honest services in violation of 18 U.S.C. §§ 1343 and 1346 (jointly referred to as honest services wire fraud “HSF”). However, soon after this conviction, the Supreme Court in Percoco v. United States limited the scope of HSF.[2] They did so by restricting the sources of fiduciary duty that can support an HSF conviction, holding that a limited number of on-point pre-McNally cases was insufficient to sustain an HSF conviction.[3] Through this ruling, Percoco essentially established a limiting principle for HSF; however, it did not articulate a test for when an actionable fiduciary duty under HSF could be found.[4]
In the wake of Percoco, the defendants in Full Play filed a motion for acquittal on their honest services charges. They argued that under Percoco, honest services fraud does not cover foreign commercial bribery because the statute requires defendants to induce a violation of the bribe-recipient’s fiduciary duty to the victim organization and because the type of fiduciary duty alleged in this case, a duty owed by foreign employees to a foreign employer, is not cognizable under §1346. Judge Chen agreed, holding that there was not “even a smattering” of pre-McNally cases to support the defendants’ HSF convictions.[5]
Though this case is under appeal, the judge’s ruling represents the difficulties of post-Percoco commercial bribery prosecutions through § 1346.[6] This article will argue that the Travel Act, 18 USC § 1952, represents an effective substitute for § 1346 that allows federal prosecution of commercial bribery through both HSF and state-level commercial bribery statutes.