05/26/2014
 
Business Crimes, Investigations & Compliance
   
 
 
 
OVERVIEW
 
On May 23, 2014, Nazir Karigar was sentenced to three years in prison for offering to bribe foreign officials contrary to section 3(1)(b) of the Corruption of Foreign Public Officials Act (CFPOA). This is the first time that an individual convicted under the CFPOA has been sentenced and the first time that a jail term has been handed out. This case will stand as a precedent for sentencing in future corruption cases.
 
 
THE SENTENCE
 
Mr. Karigar was convicted on August 15, 2013 for his role in a plan to bribe Indian officials, including a government minister. The case concerned an agreement to pay approximately US$450,000 in cash as well as certain shares to Air India officials and the Indian Minister of Civil Aviation to secure a contract for the provision of facial recognition software and related equipment. At the material time, Mr. Karigar was acting as a paid agent for Cryptometrics Canada (Cryptometrics), an Ottawa-based technology company.
 
Mr. Karigar was convicted even though there was no evidence that a bribe was paid to Indian officials. Additionally, Cryptometrics was not ultimately awarded the contract. For more information on Mr. Karigar’s conviction, please see our previous Blakes Bulletin: Canada's First Foreign Bribery Trial Results in First Conviction of an Individual.  
 
The Crown was seeking a four-year prison term for Mr. Karigar. It argued that the jail term would deter others from bribing foreign officials. The defence argued for a reformatory sentence, which could be served in the community. The defence pointed to Mr. Karigar’s age – he is 67 – and lack of criminal history.
 
Mr. Karigar was sentenced to three years in prison by Justice Charles Hackland of the Ontario Superior Court. In sentencing Mr. Karigar, Justice Hackland took Mr. Karigar’s age, his cooperation, and the fact that the scheme was unsuccessful into account as mitigating factors. Justice Hackland noted, however, that since the bribery scheme Mr. Karigar participated in must be viewed as a serious crime, the principles of denunciation and deterrence were also important.
 
The maximum sentence Mr. Karigar could have received under section 3(2) of the CFPOA was five years in prison. Although this provision was amended in June 2013 to raise the maximum prison term to 14 years, the amendments to the CFPOA did not apply to Mr. Karigar because the offence in question occurred prior to the amendments coming into force.
 
The sentencing reflects a continuing trend of increased enforcement of the CFPOA by Canadian authorities. Additionally, it reflects that judges are increasingly imposing stiffer sentences, including prison terms which historically have been rare, on white-collar offenders.
 
 
CONCLUSION
 
Mr. Karigar’s sentencing is significant because it is the first time that a prison term has been handed out under the CFPOA. The decision, which will stand as a precedent for future sentencings, demonstrates that Canadian courts view breaching the CFPOA as a serious offence. It also demonstrates that enforcement authorities are willing and able to secure significant penalties for individuals or corporations that violate the CFPOA. This sentencing underscores the need for a robust compliance program, including conducting a risk assessment, implementing appropriate policies, training employees and agents, implementing a governance structure aimed at preventing anti-corruption violations, using protective contractual terms, engaging in due diligence, and engaging in ongoing monitoring to guard against these types of matters. For additional information on complying with anti-corruption legislation, please see our previous Blakes Bulletin: The Long Reach of the Law: Practical Tips for Compliance with Anti-Corruption Legislation.
 
For further information on our Business Crimes, Investigations & Compliance group, please contact any of the following members:
 
Calgary             Mark Morrison      403-260-9726
                         Michael Dixon       403-260-9786

Toronto             Paul Schabas       416-863-4274

Montréal            Robert Torralbo    514-982-4014

Vancouver         Sean Boyle          604-631-3344 
Tags: Business Crimes, Investigations & Compliance


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