A federal jury on Friday found Dooney & Bourke co-founder Frederic Bourke guilty of conspiracy for his role in a plot to bribe officials in Azerbaijan.
This story first appeared in the July 13, 2009 issue of WWD. Subscribe Today.
Bourke, 63, was convicted in U.S. District Court in Manhattan of conspiracy to violate the Foreign Corrupt Practices Act and of making false statements to the FBI. The jury acquitted the Greenwich, Conn. resident on one count of money laundering.
Bourke was indicted in 2005 on charges that he was part of an investment group that paid hundreds of millions of dollars in cash, stock and gifts to administrators in the former Soviet state in the late Nineties. According to investigators, the co-conspirators sought to ensure the purchase of the State Oil Company of the Azerbaijan Republic through a rigged auction.
Bourke’s attorney could not be reached for comment.
He faces a maximum punishment of 10 years in prison and $500,000 in fines. Judge Shira Scheindlin scheduled his sentencing for Oct. 13.
Prosecutors said Bourke had invested about $8 million in Oily Rock Ltd., a company run by Czech financier Viktor Kozeny. The Harvard-educated investor bought privatization vouchers through the firm and planned to exercise them in the takeover of the state oil company, prosecutors said.
To ensure its bid, the investment group bribed Azerbaijan officials throughout 1997 and 1998, the U.S. Attorney’s Office said. Prosecutors argued that Bourke knew about the payments and went so far as to obtain medical treatment in New York City for two corrupt Azeri bureaucrats in 1998.
At the time of his arrest, in 2005, a Dooney & Bourke attorney said that Bourke’s private investments were totally separate from the handbag and accessories firm he helped found in 1987. A personal attorney for Bourke said his client had been a victim of his co-defendants at the time.
The Norwalk, Conn.-based Dooney & Bourke is privately held and counts Coach and Kate Spade among its competitors. According to Yahoo Finance, the company had revenues of $6.2 million and 104 employees in 2007, the last year records were available.
The business media dubbed Kozeny the “Pirate of Prague” for other plots to profit off the privatization of state-owned assets after the fall of the Soviet Union. According to prosecutors, Bourke and Kozeny were neighbors in Aspen, Colo.
Kozeny is currently fighting extradition from the Bahamas, according to reports.