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The recent convictions and lengthy prison sentences for numerous corporate executives – people who are worth tens or hundreds of millions of dollars – raise a simple question: Why didn’t they flee to some tropical paradise? While, it is hard to uproot your life and your family and to move to a distant corner of the globe, it is no harder than spending a decade or more in a federal prison. And, of course, fleeing will be seen as an admittance of guilt. Yet, isn’t it better to flee and be deemed guilty by the public then to stay and be declared guilty by a jury? In the final analysis, the reason why more corporate defendants are not “lamming it” may be that few fugitives ultimately succeed in either living an enjoyable life or avoiding punishment. Former Comverse Technology CEO Jacob Alexander is the most recent example. Alexander, a resident of the United States and a citizen of Israel, fled to Namibia after transferring $57 million there, as well as sending his family ahead. He chose Namibia because it does not have an extradition treaty with the United States. Namibia is nonetheless holding an extradition proceeding. As part of the process, Namibia officials have been essentially asking what the United Stated is willing to give in return for Alexander. For the moment, at least, Alexander remains free in southwest Africa, but his future there is far from certain. Robert Vesco is the most notorious white collar fugitive. In the early 1970′s, Vesco was the focus of a SEC investigation involving substantial, but uncharged, allegations that he had looted a mutual fund of millions of dollars. Vesco ping-ponged among several countries before fleeing to Costa Rica in 1973. While in Costa Rica, Vesco donated over $2 million to a company owned by then-President Figueres, who promptly caused a law to be passed that protected Vesco from extradition. Within one year, however, Figueres was out of office. Figueres’ political opponents then sought to drive Vesco from the country. Vesco then reportedly paid millions of dollars to Cuba for refuge. While there, Vesco became ill with a series of kidney infections. Vesco’s money began running out by the mid-1990s, at which point the Cuban government alleged he was involved in fraud and sentenced him to 13 years in a labor camp. All of this occurred in response to an SEC investigation that may or may not have gone criminal, and in an era when even the biggest white collar criminal could reasonably expect a few years in a prison camp. Vesco may have avoided prosecution in the United States, but he certainly has not lived a better life. How Extradition Works Extradition is generally carried out pursuant to a series of bilateral and multilateral treaties between the United States and over 100 other countries. Most countries in the world have extradition treaties of one type or another with most other countries. Currently, the United States does not have extradition treaties with North Korea, the People’s Republic of China and Namibia. Many criminal defendants planning to flee look at the list of countries having extradition treaties with the United States and assume that if there is no such treaty, they are safe. As Alexander learned, nothing could be further from the truth. Extradition treaties come in two basic types: list and dual criminality. List treaties enumerate specific crimes for which extradition is allowed. Dual-criminality treaties, which are much less common, generally allow for extradition of a criminal if the punishment allowed is more than one year in both jurisdictions. Under both list and dual-criminality treaties, if the conduct is not a crime in the host country, then extradition will not usually be ordered. (France has refused to extradite Roman Polanski for statutory rape on this basis for decades.) Most countries will deny extradition if they are convinced that the punishment would not be commensurate with the crime. Most European Union countries, as well as Mexico and Canada, will generally not allow extradition if the death penalty may be imposed. (Philadelphians are aware of France’s policy concerning this from the Ira Einhorn case. France refused to extradite Einhorn until it was assured he would not be executed.) European Union countries also will not extradite persons who would be at significant risk of being tortured or “degraded.” The authors were recently involved in a case involving the extradition of Canadian citizens to the United States. Canada courts initially refused to extradite the defendants because of the threat of homosexual rape in American prisons. Many countries, including France, Germany, China and Japan prohibit extradition of their own citizens. Generally speaking, these countries prosecute the defendants at home and attempt to punish them approximately equivalent to what they would have received in the country where they committed the crime. There exists today a significant strain between the United States and the United Kingdom concerning extradition. The United Kingdom seeks to extradite three individuals alleged to be members of the Irish Republican Army. Recent modifications to the extradition treaty have been interpreted by United States officials to require that the United Kingdom show “reasonable cause” that the individuals committed the various offenses with which they are charged. This has delayed the extradition. In response, British officials have acted excessively slowly in extraditing the so-called “Natwest Three,” three individuals charged with crimes related to the Enron scandal. Most extraditions are far less controversial than this and the typical white collar business crime extradition will go much more smoothly for the prosecution. It is also important to note that under the federal sentencing guidelines, fighting extradition will virtually guarantee a denial of any reduction in sentence for acceptance of responsibility and can be regarded as obstruction of justice. And, finally, the flight itself is likely a separately chargeable crime. Capturing Fugitives There is a more direct option. Federal agents may legally travel to a foreign land to seize and return a defendant to the United States. Most recently, in the United States v. Alvarez-Machain, the U.S. Supreme Court held that forcible abduction of a defendant does not prohibit his trial in the United States. The United States has shown a willingness to commit the resources necessary to seize defendants in significant cases regardless of the diplomatic niceties involved. In addition, countries that do not have an extradition treaty with the United States may still be willing to return an American fugitive in exchange for some consideration from the United States. The United States’ good will alone will likely outweigh any affection a foreign government feels for a fugitive. It is not surprising, then, that various non-extradition treaty countries have nonetheless returned fugitives. Finally, the International Prisoner Transfer Program, which was founded in response to public outcry concerning the movie Midnight Express, which featured an American in custody under horrible conditions in a Turkish prison, provides the framework for countries to obtain their citizens from foreign imprisonment. A country may receive one of its nationals from a foreign country which has convicted and sentenced him for committing an offense, and that country accepts responsibility for enforcing or administering the transferred sentence. Also, a country may return foreign nationals who have been convicted and sentenced for a crime to their home country to serve their sentences. Most of the prisoners that the United States has transferred to foreign countries have been convicted of federal offenses, although, those detained in state institutions are also eligible. Over the past several years, the United States has processed approximately 1,500 transfer applications per year. The United States typically denies just over half of the applications. By contrast, only 84 Americans were accepted back into the United States in 2005. Relatively few Americans seek return. Instead, they typically prefer to stay abroad where sentences are generally less harsh. This is especially so given that the United States has effectively abolished parole. For example, if an American is sentenced to 10 years by a Canadian court and is transferred to the United States, he will serve 10 years, minus only possible earned “good time” and an early transfer to a halfway house. This is likely to add up to about eight years in prison. If the same prisoner serves his time in Canada, he is subject to Canadian parole provisions, which will release him much earlier, likely after only four years. Of course, some foreign prisons are bad enough (e.g., the Turkish prison in Midnight Express) that it is still worth coming back to a U.S. prison. Conclusion In the face of federal criminal charges alleging nearly $100 million in fraud, “Crazy Eddie” Antar used false passports to hopscotch through multiple countries including England, France, Switzerland, Canada and finally Israel. After serving seven months in an Israeli jail and being extradited to the United States, Crazy Eddie uttered the memorable phrase that “just like my stereo prices, running from prosecution is insane.” Crazy Eddie was right. JOSEPH U. METZ is a partner at Dilworth Paxson, where he is a member of the corporate investigations and white collar group. His areas of practice include white collar criminal defense and related litigation as well as internal corporate investigations. He has defended a number of political and business figures. He can be reached at 717-236-4812 or [email protected]. DAVID M. LAIGAIE , a partner at Dilworth Paxson, heads the corporate investigations and white collar group. His areas of practice include health care fraud, securities fraud, tax fraud, export violations, pharmaceutical marketing fraud, municipal corruption, defense procurement fraud and public finance fraud. He regularly conducts internal corporate investigations. He can be reached at 215-575-7168 or [email protected].

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