In recent years, application of the U.S. criminal laws to foreign nationals beyond the nation’s borders has become an increasing area of dispute. For federal prosecutors, one approach has been to seek to use the breadth of conspiracy statutes and accomplice liability theories to extend their reach even beyond that of the underlying substantive criminal statute. One of the most significant areas of U.S. law enforcement’s extraterritorial expansion has been the Foreign Corrupt Practices Act (FCPA), a niche notable for untested legal theories because of the dearth of cases that actually are litigated.1 Now, however, the U.S. Court of Appeals for the Second Circuit has an opportunity to examine the validity of the government’s approach in United States v. Hoskins,2 an FCPA case the U.S. Department of Justice currently is prosecuting in the District of Connecticut. Given the federal courts’ increasing sensitivity to issues related to extraterritoriality, the Second Circuit’s decision is likely to have an impact beyond FCPA enforcement efforts.
Today many businesses operate with little regard to international borders. Nevertheless, courts repeatedly have recognized that the Justice Department’s authority to police foreign conduct has its limits. For instance, attempts by the government to extend federal civil and criminal securities fraud statutes to foreign transactions and the purchase of securities outside the United States have been rejected by the courts.3 Courts similarly have rejected efforts by the government to prosecute foreign defendants under the honest services fraud and federal funds bribery statutes for foreign activity where the only nexus to the United States alleged is that the “aim of the illegal activity was to cause harm inside the United States.”4
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