Carlos Ghosn lieutenant Greg Kelly heads to make-or-break appeal verdict in Nissan criminal trial

TOKYO — Nearly six years after Carlos Ghosn's arrest in Japan and downfall as the venerated chairman of the Renault Nissan Mitsubishi automotive empire, his alleged co-conspirator, American Greg Kelly, is finally heading to a make-or-break verdict in the appeal of his criminal conviction.

Kelly's lawyer, Yoichi Kitamura, made the defense's closing argument Sept. 19, telling the Tokyo High Court that testimony from the key government witness was uncredible, thereby undermining the prosecution of Kelly and allegations of financial misconduct against him.

The argument has worked before. In the initial trial, Kelly was cleared in March 2022 by the court in seven of eight counts.

Kelly's ongoing appeal is focused on overturning the single guilty count in one fiscal year that he was found culpable. Prosecutors, however, are appealing the seven counts on which he was found not guilty.

A verdict will be issued at a Feb. 4 hearing.

"Your court, as the last fact-finding court, should dismiss the prosecution's appeal, allow the defense's appeal, and reverse Kelly's conviction portion of the original judgment, thereby acquitting Kelly in his entirety," Kitamura told the three-judge panel.

"The news of his arrests spread around the world, and Kelly's reputation has literally been diminished on a global level," he said in closing arguments, adding that the high court must "restore Kelly's diminished reputation and to bring justice to Kelly."

Kelly, who was a longtime Nissan human resources and legal executive before joining the board, was given a suspended sentence in the original trial and allowed to return to the U.S. But that came only after Kelly was jailed in Japan and then grounded in the country on bail for more than three years while he fought the charges in court. Kelly now resides in the U.S. with his family.

The February ruling could close a chapter in a stunning scandal that divided the Renault Nissan alliance, triggered a wholesale upheaval of leadership at the carmakers and weakened Nissan's business footing for years as it struggled to regain sales, profits and employee morale.

The affair all but erased the sterling reputation of Ghosn, once one of the most lauded leaders in the automotive industry. And it cast an unfavorable light on Japan's justice system on the international stage, as differences between the legal rights afforded in the West came to light.

Also still unresolved are the four indictments filed against Ghosn, as well as civil cases brought by Nissan against both Kelly and Ghosn, to the tune of ¥15.5 billion ($109.33 million) for Ghosn.

Prosecutors accused both Ghosn and Kelly of hiding some $80.5 million in postponed Ghosn compensation from 2010 to 2018. But separately, Ghosn faces additional criminal breach of trust charges.

Neither Ghosn nor Kelly is in Japan. And neither is expected to be present for the ongoing trials.

Both men, arrested in November 2018 in a coordinated sting after they flew into Japan, have denied wrongdoing. They say the charges of financial misconduct were concocted to block Nissan's fuller integration with its longtime French partner Renault.

Ghosn has been holed up in his ancestral homeland of Lebanon after fleeing Japan in a dramatic dark-of-night escape, hidden in a box, in December 2019. Japan issued an Interpol red notice for his arrest. But Ghosn holds a Lebanese passport, and Lebanon doesn't extradite citizens.

Kelly was left alone to stand trial, which began Sept. 15, 2020, in the Tokyo District Court.

In Kelly's appeal, both the defense and prosecution are seeking a reversal of the original ruling. Unlike in the U.S., prosecutors in Japan are allowed to appeal not-guilty verdicts, a tactic they traditionally use to wear down defense teams and bleed them of cash for attorney fees.

Kelly's guilty verdict hangs on a single count in which the judges say he was made aware of Ghosn's deferred compensation by a manager in the Secretariat division that handled executive pay. The manager, Toshiaki Ohnuma, took a plea bargain to turn witness for the prosecution.

In its appeal, the defense is trying to undermine Ohnuma's credibility. In fact, Kelly was cleared on most counts because the original judges found Ohnuma was not reliable. This was partly because Ohnuma, who kept records on Ghosn's pay, had takena plea bargain with prosecutors to win immunity. But it was also because his memory was at times fuzzy and he could not show Kelly had direct knowledge of the numbers Ohnuma was handling.

In cross-examination during the appeal, Ohnuma on occasion changed his story from the testimony he delivered in the first trial, further undermining his credibility.

"Ohnuma's testimony at this trial rather emphasized how little involvement Kelly had in the conspiracy as alleged by the prosecutors," Kitamura said.

"Ohnuma's testimony has changed in various respects since this appeal trial began. All of these changes are related to the crimes alleged by the prosecutors and are not trivial."

Ohnuma also said he conveyed Ghosn's compensation to Kelly only in rough figures and had "assumed" Kelly already knew the details about Ghosn's remuneration. There was also a big difference between the official pay figures Ohnuma arranged in conjunction with Ghosn and the tentative amounts being worked on by Kelly in separate documents.

"The fact that the amount of money Ohnuma had recorded and the amount of money Kelly was considering paying differed should be an important fact that calls into question the very existence of the conspiracy in the first place," Kitamura said.

The prosecution's star witness also said he shared documents about Ghosn's compensation with Kelly but didn't actually explain the details to Kelly each time.

Kelly has argued that he considered only legal methods to pay Ghosn in an effort to keep him at Nissan and from being poached by competitors after he took a pay cut in 2010. The defense argues that the remuneration under consideration was never even finalized, let alone paid out.

Prosecutors, meanwhile, said Ohnuma's testimony should be viewed in its totality as reliably re-creating a framework of conspiracy to misrepresent Ghosn's compensation. The lower court, they added, improperly disregarded testimony that showed Kelly was aware of the unpaid compensation that Ghosn should have reported. As such, Ohnuma's testimony should be rehabilitated as a linchpin to overturning the not-guilty verdicts, they said.

If the defense has convinced the three judges of Ohnuma's unreliability, it would contribute to a full acquittal for Kelly when the appeals verdict comes down. Such a ruling could also help Kelly's defense in the ongoing civil case brought against him by Nissan.