Approximately one year ago, a criminal indictment against Ousama Naaman was unsealed (see here). The indictment charged Naaman, a dual Canadian and Lebanese national, with violating the FCPA and conspiring to violate the FCPA and commit wire fraud, while acting on behalf of a U.S. public chemical company and its subsidiary in connection with kickback payments to the Iraqi government under the United Nations Oil for Food Program. The indictment also charged Naaman with making payments on behalf of the company to Iraqi Ministry of Oil officials.
Since then, Naaman was extradited to the U.S. and the chemical company was identified as Innospec – which resolved its own FCPA enforcement action in March (see here).
As noted in this DOJ release, last Friday Naaman “pleaded guilty … to a two-count superseding information filed June 24, 2010, charging him with one count of conspiracy to commit wire fraud, violate the Foreign Corrupt Practices Act (FCPA), and falsify the books and records of a U.S. issuer; and one count of violating the FCPA.”
According to the release:
“From 2001 to 2003, acting on behalf of Innospec, Naaman offered and paid 10 percent kickbacks to the then Iraqi government in exchange for five contracts under the OFFP. Naaman negotiated the contracts, including a 10 percent increase in the price to cover the kickback, and routed the funds to Iraqi government accounts in the Middle East. Innospec inflated its prices in contracts approved by the OFFP to cover the cost of the kickbacks. Naaman also admitted that from 2004 to 2008, he paid and promised to pay more than $3 million in bribes, in the form of cash, as well as travel, gifts and entertainment, to officials of the Iraqi Ministry of Oil and the Trade Bank of Iraq to secure sales of tetraethyl lead in Iraq, as well as to secure more favorable exchange rates on the contracts. Naaman provided Innospec with false invoices to support the payments, and those invoices were incorporated into the books and records of Innospec.”
For additional coverage of the Naaman plea, see here from Christopher Matthews at Main Justice.
In 1998, the FCPA’s antibribery provisions were amended to, among other things, broaden the jurisdictional reach of the statute to prohibit “any person” “while in the territory of the U.S.” from making improper payments through “use of the mails or any means or instrumentality of interstate commerce” or from doing “any other act in furtherance” of an improper payment. (see 15 USC 78dd-3(a)). “Any person” is generally defined to include any person other than a U.S. national or any business organization organized under the laws of a foreign nation. (see 15 USC 78dd-3(f)).
In other words … the FCPA … it isn’t just for Americans.
Ousama Naaman found out the hard way.
Other foreign nationals that have been the focus of FCPA enforcement actions include Jeffrey Tesler and Wojciech Chodan (both U.K. citizens criminally indicted for their roles in the KBR / Halliburton bribery scheme)(see here) and Chrisitan Sapsizian (a French citizen who pleaded guilty to violating the FCPA for his role in a scheme to bribe Costa Rican foreign officials) (see here).