Before film producers Gerald and Patricia Green took over a movie festival in Bangkok, the weeklong event struggled to capture Hollywood's attention.
Over the next four years, the Southern California couple transformed the festival into a rising star on the international circuit for screening new films, attracting the likes of Michael Douglas, Jeremy Irons and director Oliver Stone to Thailand.
The success earned the couple a small fortune and drew scrutiny from federal prosecutors who have charged them with bribing Thai officials to run the festival and land lucrative contracts.
In a novel trial scheduled to start Tuesday in U.S. District Court, prosecutors allege the couple pocketed $14 million over a four-year period. The trial is the first in which entertainment industry figures are charged under the Foreign Corrupt Practices Act, a federal statute prohibiting corrupt payments to foreign officials for business purposes.
Gerald Green, who produced Stone's "Salvador" and the Christian Bale-led "Rescue Dawn," faces 20 counts. Patricia Green, who produced "Diamonds," a comedy starring Kirk Douglas, Dan Aykroyd and Lauren Bacall, faces 21 counts.
If convicted, they each could receive up to life in prison. They have both pleaded not guilty to the charges and are free on bond.
The outcome of the trial coupled with recent comments by federal officials could have an affect on how Hollywood studios conduct business in foreign countries. Earlier this month, Robert Khuzami, head of the Securities and Exchange Commission's enforcement division, said the agency will create a unit that will focus on possible foreign corruption violations.
"I think a message is being sent loud and clear that the government is going after violators no matter what industry they are in," said Franceska Schroeder, an attorney in Washington, D.C., who specializes in trade compliance law. "Even if you are in the entertainment industry, you have to be mindful of payments government officials are asking you to make."
The number of foreign corrupt practices cases the U.S. government has prosecuted has risen in the past several years. In 2003, there were only three; last year there were 17, according to the Department of Justice. So far, this year there have been nine cases.
‘Thai privilege card’ at issue
Prosecutors contend the Greens paid Juthamas Siriwan, the former governor of the Tourism Authority of Thailand, about $1.8 million to help secure the Bangkok International Film Festival and tourism-related deals, beginning in 2002. The payments, often disguised as sales commissions, were transferred into accounts of Juthamas' daughter and a friend or paid in cash to Juthamas directly, according to court documents.
The Greens' lawyers said they never paid to get the contracts.
"They got the contracts because they did good work," said Jerome Mooney, Gerald Green's lawyer. "They entered into consulting agreements with those who had connections with powerful people."
One of the agreements allowed them to sell a "Thai privilege card" giving wealthy foreigners special perks in Thailand such as being escorted through customs and some discounts at hotels and restaurants. Other contracts were to design calendars, a book and a Web site. The couple inflated their budgets so Juthamas could be paid off, prosecutors said.
Patricia Green, 54, is accused of making false statements on tax returns and conspiring with her husband to cover up the payments by using different business entities, some with phony addresses and telephone numbers. Once Gerald Green, 77, learned about the federal investigation, he altered company documents, prosecutors allege.
Mooney said the couple have lost several development deals in China, Vietnam and Thailand because of the government's investigation into their business practices. One of the projects was a home shopping network show in Thailand, he said.
"It's been stressful and difficult because any time the federal government starts an investigation, it's extremely disruptive and extensive," said Marilyn Bednarski, Patricia Green's lawyer. "It's been a two-year investigation that hasn't turned up any evidence of bribery. The allegations are ridiculous."
Proving purpose of payments is keySome legal experts believe the main challenge facing prosecutors is proving that the Greens received the deals because they bribed foreign leaders.
"If this money ended up in the hands of (Thai) government officials, it's going to come down to showing what was the purpose and intent for these payments," said Jonathan Drimmer, a former federal prosecutor who focuses on foreign corruption violations and other U.S. laws.
Juthamas no longer is Thailand's tourism governor and has denied wrongdoing. She ran for a parliamentary seat in 2007 but pulled out of the race after the allegations surfaced. She has not been charged with any crime in Thailand, but Maj. Gen. Piyawat Kingket, chief of the Department of Special Investigation's Special Unit, said the police have found evidence against her.
"We have forwarded the case to the National Anti-Corruption Commission which is expected to decide soon whether to file charges against her to the prosecutors' office," he said.
Gerald Green's career in Hollywood spans more than 30 years, producing "Man Friday" with Peter O'Toole in 1975; serving as technical adviser on the 1984 sci-fi flick "Dune;" and striking up a friendship with Stone when they paired up on "Salvador" two years later, which was nominated for two Academy Awards.
Green ran a handful of companies that negotiated deals in foreign countries. For several years, Green worked with Mexican officials to allow filming at certain sites. He also arranged to provide online marketing and development services to a private Chinese company in 1999.
Most recently, Green was executive producer on "Rescue Dawn," starring Bale in the 2006 real-life tale of U.S. fighter pilot shot down and captured in Laos during the Vietnam War. The movie directed by Werner Herzog was made in Thailand.