Court Allows Discovery as to Vindictive Prosecution Defense by Smartmatic's Parent Company

From U.S. v. SGO Corp. Ltd., decided Tuesday by Judge Kathleen Williams (S.D. Fla.):

For a six-year period, the Government investigated SGO executives for their role in a money laundering and bribery scheme related to the May, 2016 Philippine elections. The investigation culminated in a six-count indictment (“First Indictment“), returned on August 8, 2024, which charged [executives of] SGO and Smartmatic … [with] conspiracy to violate the Foreign Corrupt Practices Act (“FCPA“) (Count I); violations of the FCPA (Count II); conspiracy to commit money laundering (Count III); and international laundering of monetary instruments (Counts IV, V, and VI). The FCPA “prohibits officers of a domestic concern from making corrupt payments to a ‘foreign official.’”

SGO was not charged. In fact, SGO had been cooperating with the Government since 2021, years before the First Indictment was returned. {Although the Parties may dispute the breadth and quality of SGO’s efforts to cooperate, there is no question that SGO and the Government were engaged in discussions and the exchange of documents related to this matter.}

The original trial date was set for October 7, 2024 … [but was eventually reset for 2026]….

As the court notes, the Trump Administration was skeptical of FCPA prosecutions, deprioritized FCPA enforcement generally, and “elected to close FCPA investigations into multiple companies.” But despite that, in October 2025, the government added SGO as a defendant in the case. SGO then moved to dismiss the superseding indictment, alleging vindictive and selective prosecution, and sought discovery in support of that motion, “premised on political events that have embroiled Smartmatic in the wake of the 2020 election”:

Since that election, multiple high-profile individuals and organizations connected to then-Former President Donald Trump have alleged that Smartmatic, a subsidiary of SGO, interfered in the election…. President Trump has also reposted content blaming Smartmatic for interfering in United States and Venezuelan elections, calling Smartmatic “disgraceful” and expressing that those who “rigged” the 2020 election must pay. In response to the statements by President Trump’s confederates, Smartmatic brought various defamation suits, which are largely ongoing. SGO contends that President Trump’s personal animus against SGO and assertion of its rights against President Trump’s confederates precipitated the filing of the Superseding Indictment….

The court lays out the demanding standard for defendants’ attempts to get discovery related to allegations of vindictive or selective prosecution, but concludes that in this case the standard was met. A brief excerpt (for more, including citations to precedents to which the court analogizes this case, see the full opinion):

First, a vindictive prosecution claim may be supported by evidence that the Government bucked a trend in enforcement activity in prosecuting the defendant…. [W]hile the Blanche and Bondi Memos and Executive Order 14209 explicitly announced an intention to rein in and limit FCPA enforcement, particularly against corporations, SGO was charged, nonetheless.

Second, a vindictive prosecution claim may be supported by the timing between a defendant’s assertion of a right and the allegedly vindictive prosecutorial act…. [Here,] it is telling that the Government chose not to indict SGO originally, that SGO was charged only after President Trump reassumed office and after SGO had been cooperating with the Government for years, and that the Government has presented no evidence adduced between the First and Superseding Indictments warranting SGO’s addition as a defendant.

Third, a vindictive prosecution claim may be supported by the Executive, prosecutor, or law enforcement’s stated positions, even when they do not explicitly admit that the case was brought against the defendant for an improper purpose…. The Court finds probative not just that President Trump signed an executive order regarding FCPA enforcement but also that President Trump has personally expressed animus towards SGO regarding election interference. Indeed, President Trump’s confederates were sued by SGO for making false claims regarding SGO’s role in interfering with the 2020 presidential election that President Trump lost….

After evaluating the totality of the circumstances in this case, the Court has concluded that limited discovery regarding SGO’s Motion to Dismiss is warranted…. [T]ere is “some evidence” tending to support SGO’s Motion to Dismiss: the individual Defendants were charged over a year prior to when the Superseding Indictment against SGO was returned; for years prior to the initiation of this case and up until the Superseding Indictment was returned, SGO was cooperating with the Government; the Government charged SGO amidst a public shift away from charging defendants for similar FCPA violations; SGO brought suit against the President’s confederates prior to being charged; and the President has expressed at least some degree of animus towards SGO. “It may well be that no fire will be discovered under all the smoke, but there is enough smoke here … to warrant the unusual step of … find[ing] out how this unusual prosecution came about.”

[T]he Government shall provide the Court with the following for ex parte and in camera review under seal:

1. The prosecution memoranda regarding the initial indictment in this case and the subsequent Superseding Indictment of SGO;
2. All communications, including emails, memoranda, and correspondence, between the Department of Justice—including principals and personnel in the Offices of the Attorney General, the Associate Attorney General, the Deputy Attorney General, and the Principal Deputy Attorney General—and former Acting United States Attorney Hayden O’Byrne, United States Attorney Jason Reding Quiñones, and any member of the past and present prosecution team relating to or discussing the decision to charge SGO and when to charge SGO from January 1, 2025 to October 16, 2025; and
3. Any emails sent by either former Acting United States Attorney Hayden O’Byrne or United States Attorney Jason Reding Quiñones to SGO’s former and current counsel from January 1, 2025 to October 16, 2025.

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