Photo credit: Pro-Honduras Network. The photo depicts the accused Carl Zaglin.
NOTE: Please excuse the typos and grammatical errors. This is a working document.
What happened today
- A juror was dismissed for disobeying judge’s orders and seeking information about the case outside of the courtroom.
- The government and the defense delivered their closing remarks.
- The judge gave her instructions to the jury and the case was formally given to the jury for deliberations.
- A verdict is expected at any time.
What to expect tomorrow/Monday
- If a verdict is not reached today, the jury will continue deliberating on Monday until they reach one.
Key details that surfaced
Government’s closing remarks
Good morning. At the beginning of this trial, we told you this case is about bribery, hundreds of thousands of dollars in bribes that were paid and promised to by the defendant to Honduran officials including Pacheco, Molina and Francisco Cosenza. The money passed right here through Miami and Belize bank accounts. This case is about bribes.
The evidence is overwhelming and prove beyond a reasonable doubt that the defendant paid bribes to get payments for his company. He knew what he was doing, he used his Chief Financial Officer, Luis Berkman, and his Vice President to execute his scheme. Brian Dehart and Luis Berkman did the negotiating and Aldo Marchena delivered the bribes.
From 2015 to 2019, for five years, the defendant secured contracts totally over $10 million because the scheme worked. We have spent the last two weeks seeking bits and pieces. But today, we will put them all together for the full pictures. The emails, contracts, invoices, and others documents to look at the evidence to show that the defendant used bribes to get business for his company.
The defendant is charged with three crimes: Conspiracy to violate the Foreign Corrupt Practices Act (FCPA), 2) Violating the FCPA, 3) Conspirating to commit money laundering.
Now, I am going to talk about the evidence. Please take notes of the evidence, each of the exhibit with their numbers and the evidence will be made accessible to you. I am going to provide a roadmap of what I will talk about:
- 1. Defendant and co-conspirators,
- 2. Overview of scheme, and just to note: no one denies that bribes were paid
- 3. Reason why defendant knew
- 4. Legal elements of the case.
1. The defendant and his co-conspirators: The defendant was the CEO of Atlanco, a manufacturer of uniforms. Dehart was a minority owner and the defendant and Dehart were close. The defendant used Bryan and Luis Berkman to negotiate and deliver bribes. Luis was the defendant’s left hand, and Bryan the right. The defendant used intermediaries like Aldo Marchena who was “the money man, the money launderer.” He would send the bribe money to Jamie Nativí, Juan Molina and Francisco Cosenza to make payments to high-level officials. Cozenza steered contracts to Atlanco and pushed for them to get paid. Juan Molina received over $100,000 in bribes, and there were other officials involved.
2.You have spent two weeks listening that the defendant was participating in: conspiracy to bribe Honduran officials, the defendant promised to pay bribes, and he used intermediaries. In 2015, the defendant had the opportunity to become a major provider, they had a factory in Honduras to put a uniform on every Honduran police officer in the country. The conspiracy began around April 2015 when the defendant, Brian Dehart and Loren Simpson agreed to pay bribes to Honduran officials using proceeds of the contracts. The bribes were shown on a spreadsheet [in court]. $750,000 were paid in “administrative costs” but these were bribes. Loren Simpson and Bryan Berkman told you they discussed this with the defendant. The plan was to have TPG deliver the bribes. This is a criminal conspiracy to violate the FCPA. They received a $5 million contract. Money was important to the defendant because Atlanco was in bad financial shape. The company had “major immediate flow problems.”
The defendant had two problems. When TPG left the deal, he needed someone to deliver payments and Scott Haygood started to ask questions. But defendant was careful, he knew it was illegal so he used people around him. He used Aldo Marchena, used Brian Dehart and Bryan Berkman to cover it up and put a barrier around Scott Haygood. He told lies, he and Luis Berkman traveled to Miami to meet with Aldo Marchena. He told his lawyers that he worked in Marchena’s office and told his attorney that he would use Marchena to deliver uniforms. This was a lie. Over two years, the defendant sent $2.4 million to Marchena and he covered up his tracks by having Marchena send him bogus invoices. Marchena then paid bribes to Honduran officials. Hundreds of thousands of dollars in bribes and he paid additional small bribes in 2019. It’s as plain as day. The defendant knew what Marchena was doing. “The scheme was clear: Pay bribes, get business, get paid.” These are details that are not disputed and the government is responsible to prove our case.
3. The only real dispute in this case is whether the defendant knew bribes were being paid. It’s not disputed in this case that there were bribes or not. This is an international bribery and money laundering scheme. Marchena was not a broker, he was a money launderer. Marchena sent hundreds of thousands of dollars in accounts to the U.S and Belize, and to Honduras and into the hands of Honduran officials including Juan Molina, Francisco Cosenza, and Jaime Nativí. Cosenza worked behind the scene to push for more Atlanco contracts and to get Atlanco paid. He tried to conceal his scene with fake invoices to Marchena.
Defense will argue that the defendant did not know. But did the defendant agree to pay bribes to Cosenza and others? Yes, yes he did. I will walk you through the six reasons how you know the defendant conspired to pay officials through Marchena to launder bribe money.
- Witness testimony,
- The defendant knew Marchena was a sham
- The defendant was “the boss”
- The defendant knew all about Cosenza
- The defendant “took care” of the CFO
- The audio recordings.
[The prosecutor went into detail for each of these reasons].
Each one of these six reasons is sufficient to convict. If you believe one, then convict the defendant. We presented not just one but six about how the defendant knew about the bribes.
The defendant is accused with three charges,
- Conspiring to violate the FCPA
- Violate the FCPA
- Conspiring to launder money
[The prosecutor went through how the evidence demonstrated the involvement of the defendant in each charge].
The defendant’s crimes began in 2015. He was at the top of a bribery conspiracy for years. He made lots of money, $10 million because he put interests over integrity. The FCPA was enacted to stop bribes and corruption that undermine our institutions, businesses, and our economy. It was designed to hold businessman that bribe, lie and threat to their own advantage. The defendant deceived many for years. He’s guilty and you should find him guilty on all three counts.
Defense closing remarks
[NOTE: The closing remarks of the defense at times were hard to follow, particularly the threads of their arguments.]
Thank you for your attention in this trial. I am going to talk to you about the defense aspect of closing arguments even though the defense doesn’t have to put up a single piece of evidence. Proving beyond a reasonable doubt means that the case has to be very convincing. Would you be willing to rely on Luis Berkman for the most important affairs or decisions in your life? What about Bryan Berkman? Same with Loren Simpson and Aldo Marchena. They had a reason to say what they said.
This case is about intent. What was Carl Zaglin’s intent? Was the act committed voluntarily or willingly with intent? That’s critical and that’s a high burden to prove. Zaglin relied on information he received from counsel and its a defense and an absolute defense. The interactions he had with lawyers are part of the evidence in this case.
The most important thing you bring to this courtroom, even more important than the law degrees that the lawyers have: Common sense. Look at everything and ask yourself: Does this make sense? Time and time again, you will realize that it does not.
Why are we talking about common sense? If you are the boss of some kind of company, it doesn’t make sense to reach out to a law firm and request information about the FCPA. The lawyers were told about the first contract which involved $1.2 million.
In early 2015, Tactical Products Group (TPG) had already negotiated the uniforms contract with TASA and their broker commissions. Atlanco did not get involved until March 2015 and TPG had already been awarded a contract but had not finalized it. Altanco inherited brokers.
Jaime Nativí was not a broker, he was not a Honduran official. Scott Haygood was the point of contact and was providing information to counsel about administrative costs, $750,000, and talked openly about the “waterfall.” And “waterfall” is something that Scott Haygood says is typical in business when money is being paid out. It’s a business term, it’s not a bribe. Mr. Zaglin brought in lawyers because he had nothing to hide.
What happened after the contract was signed? When did Berkman’s plans to steal begin? He’s an absolute liar at the top magnitude. Zaglin reaches out to lawyer to talk about Achieve. Scott Haygood and Carl Zaglin shares information. Zaglin sends him a slideshow on FCPA.
[Defense put a slide on the screen for the jury:]
On September 3, 2015: Scott Haygood and Carl Zaglin had a meeting with lawyers about the FCPA, including an expert on the Act.
- James Eisenhower, a subject matter expert on the FCPA
- High level briefing on the FCPA
- You do not need to know your customers or their actions.
- Use of brokers is allowed under FCPA
- Not a strict liability statute
- Someone outside the company downstream is not liable.
- Had discussions about what payments would be
- Revealed that $1.2 million in broker fees on $750,000, commission plus another $400,000 some odd thousand.
- Crux: Is it ok to pay TPG and these people?
No one would call an expert on FCPA if they were a criminal. Carl Zaglin didn’t have wilfull intent to join any criminal conspiracy in that respect.
[The defense continued to go through some of the government exhibits presented as evidence and adding their arguments to them]
This case really comes down to: Would anyone believe beyond a reasonable doubt. Would you believe a word of what Bryan Berkman, Luis Berkman and Loren Simpson say? Everyone would say absolutely not. The government’s case is pieced together by these testimonies.
Look at the Bolivian cash deals involving the Berkmans. They did not have to plead guilty to anything but they got a deal in order to testify in this case. They have a desire to be free that is so high – the Berkmans got a deal on their Bolivian deal because of their contributions to the Honduras case. But they have zero credibility.
The beauty of this country is that in this courtroom, the government loses its power and the power goes into the jury box. The jury has the power to determine what is proof beyond a reasonable doubt. This is the beauty of our system.
I ask you not to compromise your review of the charges. Do not negotiate that Mr. Zaglin be charged with one crime and not the other. For me as a defense attorney, this is the hardest part of the trial. I have to sit down and am not given another chance to talk. The government will get up again and make their arguments but when you go back to the jury room, think to yourself, “What would Mr. Gillen say?”
The government has the complete burden of proof beyond a reasonable doubt. They have not shown it and you should acquit Mr. Zaglin. Declare him not guilty on all three charges.