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 Greens paid bribes so they would be awarded business contracts that brought the couple $14 million. 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 and are free on bond.
The outcome of the trial coupled with recent comments by federal officials could have an effect on how Hollywood studios conduct business in foreign countries. This month, Robert Khuzami, head of the Securities and Exchange Commission's enforcement division, said the agency would create a unit that would 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."
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 website. 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 had lost several development deals in China, Vietnam and Thailand because of the government's probe.
"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."