case 1:10cr20894pas document 42 entered on …fcpa.stanford.edu/fcpac/documents/3000/001757.pdfcase...

Case 1:10cr20894PAS Document 42 Entered on FLSD Docket 02101/2012 of 13

UNITED STATE DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA CASE NO.: 10-20894-CR-SEITZ

Plaintiff;

vs.

JUAN PABLO VASQUEZ,

Defendant. /

DEFENDANT JUAN PABLO VASQUEZ' MEMORANDUM IN AID OF SENTENCING

The Defendant, JUAN PABLO VASQUEZ, through undersigned counsel, hereby submits

the following Memorandum in Aid of Sentencing in support of the Government's request for a

downward departure sentence, pursuant to Section 5K1.1 of the United States Sentencing

Guidelines.'

I.

Three critical facts are undisputed:

1. Juan Pablo Vasquez has provided substantial assistance and is deserving of a downward departure from the applicable advisory sentence under the Sentencing Guidelines (60 months);

2. His criminal conduct and the events that followed have dramatically changed Juan Pablo and his life; and

3. Over the last half-decade, since his ill-fated criminal conduct, Juan Pablo has done everything, and we mean everything, not only to sincerely and frilly accept responsibility and completely and without reservation cooperate, but to live with and show the profound shame and remorse only a genuinely good person can feel. This is what Juan Pablo said to your Honor at the time of the plea, which, candidly, caught even his own lawyers by surprise as it was unrehearsed:

'On February 1, 2012, the Government filed a Motion for Downward Departure Pursuant to SKI. 1 based on Juan Pablo Vasquez' substantial assistance.


I have tried to be as open and as truthful as possible with the government and wit/i Ilinse arniiiii tue to accept the fact that Iwas there when it - tf,1.( ih1ih( /1 oli/(.( /ieppen and that lwould never do it again ....m a //v/ii , examp/e of how your life can change based on something 1/ice! you are doing for a company. And that is definitely not - it 'snot ethical, it's not worth it, and it's not the way to live your life. (Transcript of Plea Hearing, Jan. 21, 2011, at p. 39).

Based on the quantity, quality and nature of his cooperation, as well as Juan Pablo's limited

direct involvement in the offense and the sentence already imposed on the individual with the most

culpability, we are asking this Court to sentence Juan Pablo to a non-incarcerative sentence .2 This

memorandum sets forth the facts and the law which justify and support this conclusion.

II. JUAN PABLO VASOUEZ: THE PERSON

Juan Pablo, who is 37 years old, was born in Bogota, Colombia. At the age of 11, he

suddenly lost his father, a forest engineer, who died as a result of injuries sustained in an automobile

accident. For the remainder of his childhood, his mother, Gloria, worked to support herself and her

only child. In 1990, when Juan Pablo was a teenager, he and his mother immigrated to the United

States and settled in Miami. Juan Pablo attended Gulliver Preparatory School. Upon graduation,

he attended the University of Miami (UM). In July 1994, one year before finishing his

undergraduate degree, Juan Pablo started to work frill-time in the telecommunications field. He

continued working while attending UM Graduate School, earning his Masters in Business

2Passed in 1977, the Foreign Corrupt Practices Act ("FCPA") was rarely used for criminal prosecutions until recently. Traditionally, FCPA matters were settled with a fine and handled in the civil arena. Even though DOJ has recently sought prolonged periods of incarceration for convictions under this Act, many Courts have imposed sentences of probation, particularly for cooperating defendants. See cases discussed in G. Stein, Sentencing of Individuals in FCPA Cases, Business Crimes Bulletin, Jan. 2011 (copy attached hereto as Exhibit A) ("What accounts for the predominance of relatively low, below-Guidelines sentences in FCPA cases? . . . FCPA violators often, if not typically, do not set out to break the law. Rather, operating in countries in which corruption is a way of life, they accede to an official's solicitation of a bribe, or turn a blind eye to an intermediary's misconduct, in the belief that there is no other way to obtain the sought after government contract. None of this may be a defense to an FCPA charge, but sentencing courts understandably view these circumstances as mitigating.").

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Administration (MBA) in 1999.

The following year, at the age of 27, in November 2000, Juan Pablo began working for

LatiNode, a Miami-based telecommunications company founded by Jorge Granados and other

individuals, including, his aunt, Olivia, and mother, Gloria. Juan Pablo served as Vice President of

Sales and was responsible for both the company's sales to long distance carriers and managing the

sales teams. Always viewing the company as a family business, Juan Pablo worked diligently to

increase sales and help the company expand. Due to his successful efforts on the sales end, Juan

Pablo was instrumental in LatiNode being named as the fastest growing Hispanic company in the

United States for both 2004 and 2005. At only 31 years of age, Juan Pablo served as Chief

Commercial Officer for LatiNode from 2006 until 2007, when his employment was terminated as

a result of the investigation which subsequently led to the closing of LatiNode.

On a more personal note, in 2005, Juan Pablo and his wife, Alexandra, were married. In

2007, at the same time his business life began to crumble, his family life was blessed with the birth

of their first daughter, now age 4, followed two years later by the birth of their second daughter, now

age 2. From the letters submitted to the Court on his behalf, it is evident that Juan Pablo is a loving

and dedicated husband and father. To know Juan Pablo is to realize the shame he feels in letting

down his family is much worse than any punishment that will be imposed by this Court. He will live

with that guilt for the rest of his life.

Juan Pablo is a decent, hard-working young man. His actions represent a marked deviation

from an otherwise law-abiding life. See Gray, supra, 453 F.3d at 1325 (prior minimal criminal

record is a valid consideration because it relates to the "history and characteristics of the defendant")

(citing 18 U.S.C. § 3553(a)(1)). When Juan Pablojoined LatiNode, not long after earning his MBA,

it was never his intent to engage in illegal activities. He did not seek it out, it came to him. But he

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has not, and we will not minimize what Juan Pablo did in this case. He made some horrible choices.

He was wrong, terribly wrong. He did not speak up. He did not walk away. He knowingly went

along with the bribery scheme. However, he is a good man who has made substantial efforts to try

to right the wrongs. Not only has he taken responsibility for his own actions, he gave his cooperation

and assistance to the Government. That is because he truly is a decent person. After much personal

reflection, he summoned the courage and did what he knew was the right thing to do. He knew he

needed to redeem himself.

III. THE OFFENSE

LatiNode provided long distance telecommunications services to wholesale and retail

customers using Voice over Internet Protocol (V0IP) technology. The company's wholesale lines

ofbusiness focused on the transport of phone-to-phone calls for other telephone companies, through

high capacity networks. After commencing operations in Miami in 1999, the company expanded

its operations to various Central and South American countries, including Colombia, Guatemala,

Argentina, Peru, Nicaragua and Honduras.

In 2004, Manuel Caceres, a Honduran national who resided in the United States, was brought

in to serve as LatiNode' s Vice President of Business Development. Caceres primarily served as the

point-person for developing the company's business in Honduras?

In December 2005, LatiNode learned that it was the sole winner of an "interconnection

agreement" with Empresa Hondurefta de Telecomunicaciones (Hondutel), the wholly state-owned

telecommunications authority in Honduras. The agreement permitted LatiNode to use Hondutel's

telecommunications lines in order to establish a network between Honduras and the United States

and provide long distance services between the two countries. LatiNode was required to pay

'Caceres was hired by Jorge Granados over objection from Juan Pablo, who had met Caceres years earlier and felt Caceres was not trustworthy.

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Hondutel a set rate per minute for calls to Honduras. In January 2006, after the contract was

awarded, Manuel Zelaya became the president of Honduras. Zelaya appointed his nephew, Marcelo

Chimini, to the position of General Manager of Hondutel.

Several months after LatiNode began doing business with Hondutel, Manuel Caceres went

to Honduras to investigate why the amount of minutes being used were decreasing and discovered

that, despite LatiNode's contract with Hondutel, other companies had been allowed into Honduran

market at better rates. Manuel Caceres met with Chimini and was informed that LatiNode would

need to make payments to Hondutel officials or LatiNode would lose its contract with Hondutel.

Jorge Granados, founder, CEO and Chairman of the Board, authorized Caceres to begin negotiating

the bribe payments to keep the interconnection agreement in place, as well as to receive a reduction

in rates so that LatiNode could be more competitive in the market.

During the Summer of 2006, Granados and others at LatiNode were kept abreast by Caceres,

via email and at Executive Committee meetings in Miami, regarding the negotiations and ultimate

agreement with the Hondutel officials. The agreed upon bribe rate was $0.0 iper minute of long

distance traffic generated by LatiNode. Between September 2006 and June 2007, LatiNode paid

more than $500,000 in bribes to the officials, concealing many of the payments by sending the

money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the

Honduran government officials.'

IV. PARTICIPANTS: ROLES AND RANKING

As with any illegal enterprise, its members bear different levels of involvement and deserve

41n 2007, Mr. Granados entered into negotiations to sell LatiNode to eLandia International Inc. ("eLandia"). eLandia eventually discovered the bribe payments and, after conducting its own internal investigation, made a voluntary disclosure of the criminal conduct to the Department of Justice (DOJ) and Securities and Exchange Commission (SEC). In April 2009, LatiNode pleaded guilty to a one-count information, and was sentenced to a $2 million fine. United States v. Latinode, Case No. 09-20239-CR-HUCK.

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to be punished commensurate with their level of culpability. In this case, all the charged participants

pled guilty to one count of conspiracy to violate the FCPA, with a five (5) year statutory maximum. 5

Despite higher roles and extent of participation in the offense as compared to Juan Pablo, the

advisory guidelines sentence applicable to other participants is the same as for Juan Pablo - 60

months.

1. Jorge Granados

Jorge Granados, who was the founder, CEO and Chairman of the Board of LatiNode,

authorized and directed that the bribe payments be paid to the foreign officials to keep the contract

with Hondutel and for more favorable rates. In order to hide the bribes, Granados decided to make

the payments through accounts held by foreign subsidiaries of LatiNode. Mr. Granados also

attempted to conceal the bribes from eLandia through sham consulting agreements and ordering

employees to delete emails and pertinent files from LatiNode's server. Pursuant to the terms of his

Plea Agreement, but for the five (5) year statutory maximum, Granados' Sentencing Guidelines

range would have been 135-168 months. On July 7, 2007, Judge Lenard, varying down from the

advisory guideline sentence of 60 months, sentenced Mr. Granados to 46 months imprisonment and

no fine. (Excerpt of Transcript of Sentencing Hearing attached hereto as Exhibit B).

2. Manuel Caceres

Manuel Caceres was the Vice President of Business Development at LatiNode. He was

responsible for developing the company's business in Honduras. Mr. Caceres personally and directly

negotiated the bribe payments with the Honduran officials and handled the specific details for where

and how the payments were flumeled to the Honduran officials. Pursuant to the terms of Caceres'

5 1n addition to the conspiracy count, Granados and Caceres originally were both charged via Indictment with money laundering and substantive FCPA counts. Pursuant to the terms of their Plea Agreements, the Government agreed to dismiss those additional counts which would have subjected them to advisory guideline ranges in excess of the five year conspiracy statutory maximum.

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Cooperation Plea Agreement, no enhancement for role was recommended by the Government. But

for the five (5) year statutory maximum, the Sentencing Guidelines range would be 87-108 months.

On Monday, January 30,2012, the date Mr. Caceres' sentencing had been scheduled to occur,

after a hearing that was closed to the public, the sentencing was indefinitely postponed.

3. Manuel Salvoch

Manuel Salvoch, the Chief Financial Officer, directly assisted Mr. Granados in setting up the

subsidiary companies in Honduras and Guatemala from which the bribe payments were made. He

determined the availability of funds and decided from which accounts the bribe payments should be

made. He procured the funds, set up the particulars regarding the payments, including the wire

transfers to make the bribe payments. Like Juan Pablo, Mr. Salvoch cooperated early. The

Government has filed a Substantial Assistance 5K1.1 Motion on behalf of Mr. Salvoch,

recommending a 40% reduction from the advisory Guideline sentence of 60 months (36 months).

Mr. Salvoch is scheduled to be sentenced by Judge Huck on February 23, 2012.

4. Juan Pablo Vasquez

Juan Pablo, VP of Sales and, later, Chief Commercial Officer, knew of the bribery scheme

and agreed that the payments be made. He was kept abreast of the developments involving the

bribery scheme through meetings and email traffic between the other three officers, all ofwhom were

much closer to the scheme. Like Mr. Salvoch, Juan Pablo was subservient to both Mr. Granados,

the head of the company and Mr. Caceras, the operative in Honduras. Unlike any of the other men,

Juan Pablo was young and still learning about business, who, alone, viewed Mr. Granados as his

mentor. Juan Pablo handled the sales end of the business and continued to sell knowing the bribes

would be paid. On one occasion, he assisted in calculating the amount of the payment that would

be paid based on the minutes that had been used in prior months. However, Juan Pablo never was

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involved in either the negotiation of the payments or in the complex setup for transferring funds to

make the payments to the Hondutel officials.'

V. COOPERATION/SUBSTANTIAL ASSISTANCE TO UNITED STATES

There is no dispute that Juan Pablo's cooperation is significant. Even though both Mr.

Granados and Mr. Caceres refused to cooperate with the eLandia internal investigation, Juan Pablo

voluntarily met with the lawyers handling the internal investigation in approximately September of

2007. Evidence from that investigation was used in the criminal case against LatiNode. Then, in

the Spring of 2009, almost three years ago, Juan Pablo agreed to cooperate with the United States

in its investigation of LatiNode. Juan Pablo met with Department of Justice attorneys and the case

agent on numerous occasions. Juan Pablo also provided the case agent with documentary evidence

the Government did not have and could not have gotten without his cooperation. He gave the

Government the complete archive ofhis emails, which included many critical attachments which had

been deleted from the LatiNode server after Jorge Granados instructed the deletion of emails and

other files regarding the bribes. The attachments Juan Pablo provided included spreadsheets where

the business numbers were represented, presentations that contained specifics of the bribes or the

scheme to reduce minutes in the Hondutel bill and summaries of the weekly executive-level meetings

where specific information regarding Honduras was discussed, information that enabled the

Government to prove the extent of the bribes paid. In addition, Juan Pablo reviewed numerous

emails and attachments and specifically selected of the emails most relevant to the Government's

investigation, thereby providing the Government with a roadmap for their case, as well as saving the

agent and Department of Justice attorneys time in preparing their case for presentation to the grand

'When Manuel Caceres testified at Jorge Granados' sentencing hearing, he confirmed Juan Pablo's limited role and participation and that Juan Pablo, basically, just had "knowledge about what's going on." Granados Sentencing Hearing Transcript, July 7, 2011, at p. 16, lines 19-20.

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jury-

On December 14, 20 JO, based in significant part on Juan Pablo's cooperation, a grand jury

returned an indictment against Jorge Granados and Manuel Caceres, both of whom pled guilty to

conspiracy to violate the FCPA. Caceres, in turn, decided to cooperate with the Government and he

provided "substantial assistance in the investigation and prosecution of individual targets" and

"additional assistance to the U.S. government. . ." See United States v. Manuel Caceres, Case No.

10-CR-20881 (Motion for Downward Departure Pursuant to Section 5K1.1, Jan. 27, 2012). Thus,

due to the substantial assistance of Juan Pablo, the Government was able to obtain the cooperation

of Mr. Caceres, which has lead to the investigation and possible prosecution of other individuals.

We would also ask the Court to take another significant factor into consideration in assessing

Juan Pablo's substantial assistance to the Government. Juan Pablo agreed to cooperate despite the

real possibility that the Government could decide to charge his aunt or even his mother. Though the

decision whether to cooperate with the government is always a moral one, in which sometimes a

tough choice needs to be made, in a case such as this, where an individual's cooperation could result

in other close family members being charged, the decision is all the more distressing and difficult

to make and also to follow through with.

For his substantial, extraordinary and difficult cooperation Juan Pablo should receive a

substantial reduction.

VI. THE PROPOSED SENTENCE

The Government has recommended 36 months, a 40% reduction from the advisory Guideline

sentence of 60 months, which, again, is the same starting point (maximum) as for Mr. Salvoch and

Mr. Caceres. Before determining the amount of reduction that should be applied for the substantial

assistance Juan Pablo provided to the Government, the Court should first determine the sentence that

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Case 1:10cr-20894-PAS Document 42 Entered on FLSD Docket 0210112012 of 13

would be appropriate under Section 3553, given Juan Pablo's relatively limited role and participation

in the illegal activities. Based on the 46 month sentence already imposed on Mr. Granados - the

most culpable participant - in order to avoid unwarranted sentence disparities," 18 U.S.C. §

3553(a)(6), the starting point for determining Juan Pablo's sentence necessarily shouldbe 46 months.

46 months is the low end of the guideline range for Level 23. Because Mr. Granados received a four

(4) level enhancement for being an organizer and leader of the criminal activity, 4 levels should be

subtracted from 23, further lowering the level to a 19, the low end of which is 30 months, which

would be the appropriate level for a mid-level participant, such as Mr. Caceres, before factoring in

the impact of any sentence reduction for Mr. Caceres' substantial assistance. The Government has

recommended a 40% reduction for Caceres. A 40% reduction from a 30 month sentence would

bring Caceres down to 18 months, which we submit would be a reasonable sentence, given Mr.

Caceres' level of involvement in the bribery scheme. (Of course, this does not include any other

Section 3553 arguments Mr. Caceres could make.)

As Mr. Salvoch is less culpable than Mr. Caceres, but more culpable than Juan Pablo (given

Mr. Salvoch's direct involvement in assisting in making the bribery payments), we submit that a

reasonable substantial assistance reduction for Mr. Salvoch would be to a sentence of one year and

one day.

Juan Pablo, due to his very limited participation in the bribery scheme, is the least culpable

of the four participants. Even if the cooperation provided by all three of the cooperators (Caceres,

Salvoch and Juan Pablo) were equal, clearly, Juan Pablo should receive the lowest sentence. But,

Juan Pablo's level of assistance to the Government was greater than both Mr. Salvoch and Mr.

Caceres.

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In evaluating Juan Pablo's substantial assistance, the Court should evaluate the "significance

and usefulness" ofhis assistance and consider "the truthfulness, completeness, and reliability" of the

information he provided, along with the "nature and extent of his assistance" and the "timeliness"

of his assistance. U.S.S.G. § SKi .1. Juan Pablo cooperated from very early on. Even before

assisting the Government, he fully cooperated with the internal investigation.' He agreed to

cooperate even though the information he would provide could possibly have resulted in charges

being brought against a close family member. As a result of Juan Pablo's assistance, two of the most

culpable participants were indicted and pled guilty. Mr. Granados is now serving a 46 month

sentence. Mr. Caceres decided to cooperate and apparently has assisted the Government. Not only

was Juan Pablo debriefed and agreed to testify against Granados and Caceres, he provided

documentary evidence the Government could not otherwise obtain. Juan Pablo helped the

Government prepare its case for submission to the grand jury, thereby saving the Government time

and money. Based on all the factors and circumstances applicable to Juan Pablo's assistance, it is

submitted that Juan Pablo should receive more than a 40% reduction as a result of his assistance to

the Government.

Therefore, taking into account the purposes of sentencing and factors relative to "the nature

and circumstances of [Juan Pablo's] offense" and "the history and characteristics" of the person

before the Court for sentencing, pursuant to Section 3553, it is respectfully submitted that a sentence

of one year of probation with six (6) months home confinement is sufficient to provide "just

punishment" for Juan Pablo's offense, promote respect for the law, afford adequate deterrence, as

'The attorney conducting the internal investigation, Peter Prieto, a former federal prosecutor, before Juan Pablo cooperated with the Government, informed undersigned counsel he thought Juan Pablo was "a good witness" and was "truthful, cooperative and helpful."

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well as reflect the need to avoid unwarranted sentencing disparities, while taking into account the

quality, quantity and circumstances of his cooperation, as well as the individual before the Court.

CONCLUSION

WHEREFORE, it is respectfully requested that this Court impose a sentence that takes into

consideration the individual before the Court, the substantial assistance he has provided to the United

States, as well as the foregoing circumstances regarding his cooperation and the sentence imposed

on Jorge Granados - the most culpable participant.

Respectfully Submitted,

ROTHMAN & ASSOCIATES, P.A. 200 South Biscayne Blvd., Suite 2770 Miami, Florida 33131 (305) 358-9000 Fax: (305) 374-5747

By: Is! bavid Rothman DAVID ROTHMAN Florida Bar No. 240273 E-mail: dbr(àrothrnan1awyers.com

By: Is! Jeanne T. Melendez JEANNE T. MELENDEZ Florida Bar No. 0027571 E-mail: jtrn(àrothrnan1awyers.corn

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CERTIFICATE OF SERVICE

I hereby certify that on the 1st day of February, 2012, I electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on all counsel of record via transmission of Notices of Electronic Filing generated by CM/ECF and the following via email:

Probation Officer Thomas Felasco Via Email: Thomas [email protected]

By: Is! Jeanne T. Melendez JEANNE T. MELENDEZ Florida Bar No. 0027571

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