White Collar & Regulatory Defense
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Our White Collar & Regulatory Defense group has unparalleled experience and expertise, and is among the most respected and successful in the United States. We regularly represent Fortune 500 companies and their executives and boards in connection with investigations by federal and state enforcement authorities, and in courtrooms nationwide. We excel at developing creative and successful strategies and defenses for responding to or preventing government investigations and enforcement proceedings.
Brazilian Investment Banker Secures Ruling Denying Fugitive Disentitlement in Securities Fraud Case
- Client News
- April 1, 2022
Paul, Weiss achieved a victory for client Igor Cornelsen, obtaining a ruling in a criminal securities fraud case that Mr. Cornelsen, a Brazilian national and resident, is not a fugitive and should not be disentitled from pursuing his motion to dismiss in the U.S. District Court for the Southern District of New York.
Mr. Cornelsen is charged with insider trading in Burger King call options prior to 3G’s acquisition of Burger King in 2010. Paul, Weiss moved to dismiss the indictment against Mr. Cornelsen in October 2021, arguing that the relevant criminal statutes do not apply to his alleged extraterritorial conduct and that the indictment fails to allege a sufficient nexus with the United States. In opposition, the government contended only that the district court should decline to consider the merits of Mr. Cornelsen’s motion under the fugitive disentitlement doctrine. U.S. District Judge John G. Koeltl rejected the government’s argument holding that Mr. Cornelsen was neither an actual nor constructive fugitive, and that disentitling him would not serve the objectives of the doctrine.
Substantially adopting the arguments raised in Paul, Weiss’s reply brief, Judge Koeltl held that under the Second Circuit’s recent amended ruling in United States v. Bescond, Mr. Cornelsen could not be considered a fugitive because he was not present in the United States at the time of the alleged crime or when he was charged, he did not flee the United States, and he is living openly in a home country (Brazil) that has a non-extradition policy. The court rejected the government’s arguments that Bescond could be distinguished from this case due to Mr. Cornelsen’s ownership of a vacation home in Boca Raton, Florida, his extensive prior travel to the United States or his change of permanent residence from a third country (The Bahamas) to Brazil after the alleged conduct.
As to the discretionary factors, the court held that disentitlement would not serve the purposes of the fugitive disentitlement doctrine because Mr. Cornelsen’s inability to travel outside Brazil without arrest, if his motion is denied, provides sufficient mutuality; Mr. Cornelsen was not “flouting” the judicial process; disentitlement of Mr. Cornelsen would not significantly deter flight by others; and the government failed to prove prejudice.
The court has ordered the government to respond to Mr. Cornelsen’s motion on the merits.
The Paul, Weiss team includes litigation partner Michael Gertzman.