Can Carlos Ghosn beat the rap?
With a trial looming this year on charges of aggravated breach of trust and filing false statements to regulators regarding $80 million in deferred income, the former chairman of Nissan Motor Co. and Renault SA needs a new strategy. He’s lost two requests for bail and faces as much as 10 years in prison if convicted.
Confronting a Japanese legal system with a 99% conviction rate, Ghosn overhauled his legal team last week. He replaced a group led by former local prosecutor Motonari Otsuru with one overseen by Junichiro Hironaka, who is known for aggressive tactics defending high-profile clients such as a former senior bureaucrat accused of corruption. Hironaka will hold his first news conference as Ghosn’s lawyer on Wednesday.
By hiring a lead lawyer nicknamed “The Razor,” Ghosn is betting that an attorney with a history of challenging the insular Japanese legal world can make him a free man again.
“Otsuru was miscast because he’s not the type of lawyer that will take a combative stance against the prosecutors and likely couldn’t maintain a relationship of trust with Ghosn,” said Nobuo Gohara, an attorney and former prosecutor in Japan. “Hironaka is the type of lawyer who will thoroughly fight the prosecutors’ charge.”
Ghosn’s defense team includes Takashi Takano, who represented a member of the Aum Shinrikyo cult behind the 1995 sarin gas attack in Tokyo.
“This might be the first time Takano and Hironaka are on a criminal case together,” said Nobuko Otsuki, a Tokyo-based defense lawyer. “They’re all-stars.”
Ghosn’s new defense team may explore several legal arguments to discredit the state’s case both in court and in the media, according to legal experts in Japan.
Strategy No. 1: Don’t back sown
Unlike in the U.S., hiring ex-prosecutors as your defense attorneys isn’t a good strategy in Japan because they’re accustomed to nearly all defendants either confessing or being convicted, and they usually maintain social relationships with their former colleagues, said Stephen Givens, a law professor at Sophia University in Tokyo.
“Once you are a prosecutor, you never change your spots,” Givens said. “You remain loyal and sympathetic to the prosecution side.”
Hironaka successfully defended Atsuko Muraki, a former senior bureaucrat, charged in 2009 with falsely certifying an organization as representing disabled people so it could use cheaper postage rates. A third member of Ghosn’s new team, Hiroshi Kawatsu, was part of the defense. Muraki won 37.7 million yen in compensation from the government.
He also helped win acquittal for longtime politician Ichiro Ozawa, who was indicted in 2011 for allegedly being involved in a campaign finance scandal. Otsuru was one of the leading prosecutors in that case.
“Ghosn really wants vindication,” Givens said. “Probably Ghosn is thinking, ‘I have nothing to lose and I’m going to be aggressive as hell.’ ”
Strategy No. 2: Blame Nissan
The defense team will strike at the heart of the state’s argument by contending that Ghosn is a victim of corporate intrigue, said former criminal defense lawyer Keiichi Muraoka, a professor at Hakuoh University in Oyama, north of Tokyo.
With this strategy, he said, Ghosn’s team will present him as a victim of Nissan executives eager to grab power away from Renault and short-circuit a possible merger with the French automaker. In his defense, the fallen titan said in court last month he had been wrongly accused and unfairly detained, terming the accusations “merit-less and unsubstantiated.”
“The new defense team will create a ‘case theory’ that Ghosn’s case is not a crime causing any damage to Nissan but a fabrication by the Nissan headquarters under the struggle for power between Nissan and Renault,” Muraoka said in an email.
Prosecutors also have accused Ghosn of “aggravated breach of trust” for acts related to payments — from a pool of money that only he had the authority to use — to a company controlled by the automaker’s Saudi Arabian business partner, Khaled Juffali. Ghosn’s team likely will argue that Nissan approved the $14.7 million in payments.
The payments over four years “were for legitimate business purposes in order to support and promote Nissan’s business strategy in the Kingdom of Saudi Arabia, and included reimbursement for business expenses,” according to a statement issued last month on behalf of Khaled Juffali Co. by its New York-based public relations representative Terry Rooney, founder and CEO of RooneyPartners.
Nissan also approved arrangements for the purchase of several homes, including those in Brazil and Lebanon, Ghosn said in an interview last month with Japan’s Nikkei newspaper.
The automaker last week tried to end any debate over whether Ghosn hid millions of dollars in deferred income. Nissan set up a reserve of $83 million for deferred pay — money that Ghosn maintains was never promised to him. The automaker also slashed its forecast.
And beyond the boardroom, lawyers could take on the courtroom by arguing that Ghosn’s monthslong detention is arbitrary, Muraoka said. “The world needs to know that our criminal justice system is unfair.”
Strategy No. 3: Time’s up
A critical part of the prosecutors’ case is the allegation that Ghosn transferred personal investment losses to Nissan in 2008. His lawyers may argue that the statute of limitations requires the government to file charges within seven years of the alleged crime, Givens said.
A key element could be how to calculate that period of time. Prosecutors may contend that the years stopped accumulating whenever Ghosn left the country, meaning he can be charged for alleged crimes in 2008.
Hironaka’s team could challenge that by saying the clock on the statute stops with the issuance of a warrant. In Ghosn’s case, that was shortly before his arrest in November — 11 years after the alleged crimes.
“There’s a very strong statute-of-limitations case to be made for the transactions that took place back in 2008,” Givens said.