Frederic Bourke, the co-founder and chairman of accessories firm Dooney & Bourke, was sentenced on Tuesday to one year and one day in prison for his role in a conspiracy to bribe officials in Azerbaijan.
This story first appeared in the October 30, 2009 issue of WWD. Subscribe Today.
U.S. District Court Judge Shira Scheindlin in Manhattan said Bourke, who was convicted in July after a monthlong jury trial, knew of the bribes but was not the plot’s originator. She also fined Bourke $1 million and ordered him to serve three years of supervised release.
He was allowed to remain free on $10 million bail, pending his appeal. Scheindlin said he was not a flight risk and there were facts in the case that could result in a new trial or reversal.
“Had this scheme succeeded…the people of Azerbaijan would have been deprived of the benefit of their greatest national resource,” Scheindlin said. “After years of presiding over this case, it’s not clear to me whether Mr. Bourke was a victim, a crook or a little bit of both.”
Bourke, 63, was convicted of conspiracy to violate the Foreign Corrupt Practices Act and Travel Act and of making false statements to the FBI. The charges stemmed from his involvement with Oily Rock Group Ltd., an investment firm that sought windfall gains from the sale of the state-owned oil company of the former Soviet state Azerbaijan.
Prosecutors said Bourke invested about $8 million in Oily Rock, which bought government-issued privatization vouchers from citizens of the emerging nation during the Nineties. In order to ensure the oil company went private, members of the investment group, including principal Viktor Kozeny, paid millions of dollars in bribes to officials in Azerbaijan, the U.S. Attorney’s Office said.
Prosecutors had sought the maximum prison term of 10 years for Bourke, who never saw a return on his investment as the Azerbaijan oil company remained state-owned.
“We have a substantial chance of winning that appeal, as the judge said,” said Bourke’s lawyer, Harold Haddon.
Thomas McAndrew, counsel for Dooney & Bourke, said in an interview that Bourke would remain chairman of the Norwalk, Conn.-based handbag firm he founded with Peter Dooney in 1975. At the time of Bourke’s 2005 indictment, the company said his private investments were completely separate from its business.
“Truly this is an anomaly; this is not what we know his character to be,” McAndrew said. “We’re confident he’ll continue to make a positive contribution to society.”