Conspiracy

The sheer size of a conspiracy can create distinct problems for prosecutors and defense attorneys alike. In 1993, U.S. attorneys in New Hampshire began to investigate employees of the American Honda Motor Company. By 1994, prosecutors had cobbled together an immense conspiracy-based commercial BRIBERY case.

The conspiracy prosecutions of American Honda executives and dealers began to develop in 1989, when Richard Nault, an automobile dealer in Nashua, New Hampshire, brought a civil suit against American Honda, claiming unfair treatment. In 1993, after testimony raised concerns of bribery, the judge in Nault's case recommended that federal authorities investigate the financial affairs at American Honda.

Investigations by the FEDERAL BUREAU OF INVESTIGATION (FBI) revealed a widespread pattern of illegal payoffs in which American Honda executives were given cash, jewelry, cars, and store ownership interests in return for the awarding of new Honda dealerships and favorable car allocations. According to the prosecutors, assistant U.S. attorneys Michael Connolly and Donald Feith, the alleged conspiracy involved twenty-two American Honda executives and dealers, encompassed thirty states, and was responsible for the misappropriation of approximately $50 million. In 1993 and 1994, prosecutors dangled various substantive and conspiracy charges before the executives and dealers.

By the end of 1994, only three of the alleged conspirators had refused to plead guilty: John Billmyer, an 18-year American Honda veteran and longtime vice president of auto field sales; Stanley Cardiges, another vice president of auto field sales and Billmyer's protégé; and Dennis Josleyn, whose last position was West Coast sales manager for Acura, American Honda's flagship automobile. In March 1994, Billmyer, Cardiges, and Josleyn were arrested at their homes, booked at local jails, and then released pending trial.

A federal GRAND JURY charged Billmyer with one count of conspiring with Cardiges and Josleyn to defraud American Honda, the United States, the TREASURY DEPARTMENT, and the IRS, in violation of 18 U.S.C.A. § 1341. Specifically, the indictment alleged that Billmyer, Josleyn, and Cardiges had conspired to receive money and gifts by secretly selling the valuable contract rights conferred on prospective dealers by American Honda.

Cardiges and Josleyn were charged with participating in the broad conspiracy with Billmyer and also conspiring to receive kickbacks in connection with an American Honda advertising campaign. Cardiges and Josleyn were further charged with violating the RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (18 U.S.C.A. § 1961 et seq.). In November 1993, Cardiges allegedly asked former American Honda zone manager Edward Temple to tell the FBI that payments the two had received from a hidden interest in a Conway, Arkansas, car dealership were actually loan payments.

American Honda was portrayed by prosecutors as a victim of the conspiracies. As the trial approached, lawyers for Cardiges and Josleyn prepared a defense that would further victimize the company. According to Cardiges's lawyer Philip Israels, any conspiracy case should have included the Japanese executives of Honda Motor Company International, the owner of American Honda. Israels maintained that the Japanese executives knew of, condoned, and even participated in the kickback schemes. Israels further charged that the federal government had information that suggested that Japanese executives knew of the kickbacks, and that the decision not to prosecute the Japanese executives was being used as a bargaining chip in trade negotiations between the United States and Japan.

Josleyn adopted a defense similar to that of Cardiges. Josleyn's attorneys, Paul Twomey and Mark Sisti, noted that the alleged conspiracy was so widespread that Japanese executives must have known of it. Josleyn would deny no specific facts. Rather, he would invert the meaning of the mountain of evidence uncovered by the prosecutors and the FBI, to show that the Japanese executives must have known about and approved of the kickback schemes. Such a showing would allow Josleyn's attorneys to argue that the alleged conspiracy was actually a lawful, routine business practice promoted by American Honda's parent company.

Billmyer had retired from American Honda in 1988. His lawyers, David Long and Kevin Sharkey, centered his defense on a variety of grounds. Their arguments included that the prosecution of Billmyer was barred by the five-year STATUTE OF LIMITATIONS on conspiracy charges because the indictment actually alleged multiple conspiracies, and any criminal liability for a conspiracy involving Billmyer expired in 1993; Billmyer had withdrawn from any alleged conspiracies by retiring in 1988; and New Hampshire was an improper venue because none of the acts Billmyer was alleged to have committed had any relation to New Hampshire.

In the months before trial, several motions to dismiss the case were denied by Judge Joseph DiClerico of the U.S. District Court for the District of New Hampshire. On January 22, 1994, after two years of maintaining his innocence and just one day before jury selection was scheduled to begin, Cardiges pleaded guilty to all charges. In exchange for lenient sentencing recommendations by the prosecutors, Cardiges agreed to testify against Billmyer and Josleyn. All the conspirators except Billmyer and Josleyn were prepared to testify to conspiracies to defraud.

The case proceeded to jury trial in February 1995 and was presided over by Judge DiClerico. In opening statements, assistant U.S. attorney Connolly submitted to the jury that the conspiracy was limited to a few rogue U.S. executives and dealers, and that the United States and American Honda had been conspired against and defrauded by them. Twomey declared that "the government is going to take you everywhere—north, south, east and west" to prove a conspiracy that was supposedly limited to U.S. executives and was completely unknown to Japanese executives. Long and Sharkey covered the litany of apparent infirmities in the government's conspiracy case against Billmyer.

A seemingly endless stream of witnesses then proceeded to testify against Billmyer and Josleyn. American Honda executives and dealers regaled the jury with descriptive accounts of opulence and excess. The kickback schemes resembled homage to the executives, a practice that Honda and Acura dealers called kissing the ring. Dealers and executives told of expensive offerings, including cash payments, free automobiles, Rolex watches, shopping sprees, swimming pools, and tuition payments for children. In several days on the witness stand, Cardiges alone testified to the receipt of approximately $5 million in kickbacks.

At the close of the government's case in chief, Long made a motion to dismiss, arguing that the suit was one of multiple conspiracies, that any conspiracy involving Billmyer supported by the evidence was barred by the statute of limitations, and that any payments or gifts received by Billmyer were unconnected to any conspiracy with Josleyn. The motion was denied, Billmyer called no witnesses, and Josleyn began his defense.

Throughout the presentation of the government's case, Josleyn's lawyers had been fighting a battle with American Honda. They sought to obtain, and eventually received, a copy of handwritten notes kept by Sherry Cameron, American Honda's vice president of human resources. Cameron's notes had been made in connection with American Honda's 1992 internal investigations into rumors of kickbacks. American Honda had appealed Judge DiClerico's decision to order American Honda's release of the notes to the defense, but the First Circuit Court of Appeals refused to reverse the order.

Cameron had testified for the government in March 1995, and Sisti's cross-examination of her had been suspended while the production of her notes was contested. On May 15, 1995, Cameron resumed the witness stand and was faced with poster-sized copies of her notes, one of which revealed that her "point of view" in the investigation was to "try to protect" the company. Cameron further testified that she had limited her investigation to facts, not rumors.

Twomey then called to the stand J. D. Powers, a prominent market research specialist for the automobile industry. Powers testified that in 1983, he sent a letter to Yoshihida Munekujni, then president of American Honda, informing him of widespread rumors of corruption in American Honda. According to Powers, several unindicted top-ranking American Honda executives knew of the kickback schemes in the early 1980s.

This and other evidence allowed Twomey to argue in his closing statement that the conspiracy was so implicit as to constitute one company's policy. Twomey asked the jury whether it could be satisfied that it knew the entire truth in the case. Long contended, in part, that the government had been selective and heavy-handed in its prosecution. The case was submitted to the jury. After five days of deliberations, Billmyer and Josleyn were convicted of all charges. Both vowed to appeal.

Although no Japanese executives were charged in the case, 20 American Honda executives and dealers pleaded guilty, making this the largest conspiracy-based commercial bribery prosecution in the history of the United States.