Some time back (1980s), Dick Flynn, a CPA who was a friend, sometime golfing companion, and a guy my firm went to for forensic investigation of corporate accounting, got caught up in a horrendous miscarriage of justice (my personal opinion.)
The basic facts are these:
- Dick worked for a company that got into a dispute (alleged fraud) with a client
- The head of the company and Dick went to Mexico to negotiate a settlement
- The head of the company returned to the USA and authorized Dick to complete the negotiation
- A member of the US Consulate was present during the negotiations as an "arbitrator"
- Dick had a heart attack during the negotiation and was hospitalized
- The aggrieved Mexican company filed fraud charges and Dick was imprisoned in Mexico
It's been more than 20 years, and my memory isn't perfect and I never knew ALL the details because neither I nor my firm were involved, BUT I did manage to find this legal citation
http://bulk.resource.org/courts.gov/c/F2/748/748.F2d.1186.84-2427.html
of a case where Dick's family tried to get him out of prison by compelling testimony from the Consular employee.
Ultimately, the Mexican Supreme Court overturned Dick's conviction, but not before he had suffered several heart attacks during 37 months in prison. Dick returned home in 1985 and died shortly thereafter. When I saw my friend, he was very ill and appeared to have aged 20 or 30 years in the 3 years he spent in prison. We never got a chance to play golf again the last summer of his life. His boss, Bob, thought he was a sharp businessman, but he ultimately outsmarted himself and got indicted for using phony letters of credit to obtain printing presses he resold to buyers in another country.
(As he told it, he never intended to cheat anyone, just defer total payment until he received money from his buyers. Essentially, he wrote phony checks as downpayment, with the stated intention of redeeming the bad checks for cash somewhere down the road. Law says that's a NO-NO.)
Bottom line:
The local law in Mexico allowed Dick to be imprisoned for two years before his case went to trial in Mexico. While in prison, he had several more heart attacks. Certainly, in the USA, the case would have probably been a mere civil matter
(money, not prison, at stake) regarding opposing opinions of quality and quantity, but neither Dick nor his boss were aware of the consequences of failure to resolve the matter in arbitration. As I recall, Dick was not even an employee of the company when the original deal under dispute went forward. As an "authorized" officer of the corporation at the time charges were filed, though, he was held criminally liable.
Definitely an object lesson in Contract Review, where it makes sense to know what can happen if the contract comes under dispute!
