NEW YORK — Frederic Bourke Jr., chairman of handbag firm Dooney & Bourke, has been indicted on federal bribery and money laundering charges involving an investment consortium in oil interests in the Republic of Azerbaijan.
Bourke, 59, co-founder of the firm, also was accused of making false statements during two FBI interviews about an $8 million investment that he made on behalf of himself, friends and family, according to the indictment.
The U.S. Attorney’s office in Manhattan said Bourke surrendered on Oct. 6 and was arraigned before U.S. District Judge Richard Casey. Bourke, a resident of Greenwich, Conn., pleaded not guilty and was released on a $10 million personal reconnaissance bond, said a U.S. Attorney’s office spokeswoman.
The indictment, handed down by a federal grand jury and unsealed on Oct. 6, involves alleged bribery of Azerbaijan officials involving privatization of the State Oil Co. of the Azerbaijan Republic.
“Mr. Bourke has been involved with investments and numerous businesses that are totally separate from Dooney & Bourke,” Thomas J. McAndrew, outside counsel to the handbag manufacturer, said in a statement. “Dooney & Bourke has no knowledge of, interest in or involvement with Mr. Bourke’s outside investments, and is not affected in any way by these unfortunate allegations.”
Stanley Twardy Jr., an attorney who represents Bourke, said his client was a “victim” of one of the co-defendants. Bourke’s actions “are those of a person who was not involved in any wrongdoing and we look forward to our day in court.”
Bourke made his $8 million investment “based in part on his understanding that [a co-defendant in the case] had offered, paid, authorized the payment of and would pay bribes” to officials to ensure the consortium’s participation in the privatization of the oil company, the indictment said. The goal was to “reap huge profits from its ultimate resale,” the U.S. Attorney’s office said in a statement.
Regarding the money laundering conspiracy, Bourke and others allegedly invested a total of more than $174 million for the purchase of vouchers and options to take part in the privatization, with the funds sent by wire transfer directly from bank accounts in New York or through correspondent banks in New York to accounts in Zurich and Jersey in the Channel Islands.
The U.S. Attorney’s office said in a statement that the “privatization vouchers were bearer instruments that were freely tradable, and they typically were bought and sold using United States currency.” As foreign investors, the defendants were required to purchase a government-issued option for every voucher they held.
Privately held Dooney & Bourke is based in Norwalk, Conn. According to Hoover’s Company Records, the company had $6.2 million in sales for the 2005 fiscal year. It counts as competitors brands such as Etienne Aigner, Coach and Kate Spade.
The U.S. Attorney’s office said the bribery and false-statements counts each carry a maximum penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss resulting from the alleged violations. The money laundering conspiracy count carries a top penalty of 20 years and a $500,000 fine, or twice the value of the laundered funds. The indictment seeks the forfeiture by the defendants of $174 million.