Hollywood may be in for tighter government scrutiny of its overseas operations.
Producers Gerald and Patricia Green were found guilty late Friday on charges of bribery and money laundering related to their running of a local film festival in Thailand, a decision that experts say could lead to further investigation into the huge amounts of business film studios do overseas.
The two were convicted of conspiracy to violate the Foreign Corrupt Practices Act, eight counts of violating the act and seven counts of money laundering. In addition, Patricia Green was found guilty on two counts of falsifying U.S. tax returns related to the bribes.
The jury was unable to reach a decision on an obstruction-of-justice charge against Gerald Green, and the government agreed to drop it. The trial lasted two and a half weeks; jury deliberations took one day.
Under federal guidelines, Gerald Green, 77, and his wife, Patricia, 52, could each face more than 10 years in prison when they are sentenced in December, said Assistant U.S. Atty. Bruce H. Searby, who prosecuted the case.
According to the U.S. government, the Greens paid bribes of $1.8 million to then-Tourism Authority of Thailand Gov. Juthamas Siriwan in order to run the Bangkok International Film Festival and secure two other contracts related to tourism. The contracts were worth more than $13.5 million, prosecutors said.
"There were a series of different projects and opportunities for the governor and the Greens to make a lot of money," Searby said. "They would build the Greens' profit and bribes to the governor into the contracts."
Thai officials closely followed the Greens' case and may use some of the U.S. government's findings to prosecute Siriwan, Searby said.
The couple worked on the festival in 2003 and operated it from 2004 through 2006. Through connections made in that process, Gerald Green became an executive producer on the 2006 film "Rescue Dawn," which was shot in Thailand. He previously produced the 1986 Oliver Stone film "Salvador" and the 1976 film "Foxtrot," starring Peter O'Toole.
Gerald and Patricia Green's attorneys both said they were disappointed by the verdict and were preparing to appeal.
"It's a case of circumstantial evidence," said Marilyn Bednarski, who represented Patricia Green. She added that "the people of Thailand were not victimized in any way" because the Greens provided "top-notch services" for the film festival.
Jerome Mooney, Gerald Green's lawyer, said he thought the case was a warning.
"We understand the government was taking a shot across the bow of Hollywood," Mooney said. "We just wish the shell hadn't landed on our clients' boat."
The prosecution of the Greens, which started in 2007, is the first criminal FCPA case brought by the government against film producers.
James Tillen, an attorney at Washington law firm Miller & Chevalier who has worked on many foreign corruption cases, said one case in a certain field is typically followed by more.
"Once the [Department of Justice] learns the ins and outs of a particular industry and knows where the FCPA risks are, they're more likely to keep their eyes peeled and go after others in the future," he said.
Hollywood is particularly at risk for such prosecution, he added, because many overseas productions and distribution deals are done on a tight timeline, with tens or hundreds of millions of dollars at stake, so bribes to foreign officials can be considered a cost of business.
Such legal violations can be very costly. In FCPA cases, Tillen said, all profits from the project can be confiscated, regardless of the size of the bribe.