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Bonny Island Bribery Club Statistics

By on August 26, 2010 in Albert Jack Stanley, Bonny Island Bribery, ENI, Halliburton, Jeffrey Tesler, JGC of Japan, KBR, Nigeria, Snamprogetti, Technip, Wojciech Chodan

Bonny Island.

It is located at the southern edge of the Niger delta of Nigeria. (see here).

It is the location featured in several corporate and individual FCPA enforcement actions – actions that have thus far resulted in approximately $1.3 billion in fines, penalties and disgorgement.

This number is sure to grow as one member of the joint venture at the center of bribery scheme – JGC of Japan – has yet to resolve its exposure although (as noted in this post from the FCPA Blog) it has confirmed that it is discussions with the DOJ.

In addition, the DOJ, in its indictments of Jeffrey Tesler and Wojciech Chodan, is seeking forfeiture of $132 million.

Further, as noted in this prior post, Halliburton has disclosed that it faces exposure in the U.K. in connection with a Serious Fraud Office investigation of M.W. Kellogg Company (“MWKL”), a United Kingdom joint venture 55% owned by KBR. In its most recent 10-Q (here) Halliburton stated:

“MWKL is cooperating with the SFO’s investigation. Whether the SFO pursues civil or criminal claims, and the amount of any fines, restitution, confiscation of revenues or other penalties that could be assessed would depend on, among other factors, the SFO’s findings regarding the amount, timing, nature and scope of any improper payments or other activities, whether any such payments or other activities were authorized by or made with knowledge of MWKL, the amount of revenue involved, and the level of cooperation provided to the SFO during the investigations. MWKL has informed the SFO that it intends to self-report corporate liability for corruption-related offenses arising out of the Bonny Island project. MWKL has received confirmation that it has been admitted into the plea negotiation process under the Guidelines on Plea Discussions in Cases of Complex or Serious Fraud, which have been issued by the Attorney General for England and Wales.”

While the Bonny Island Bribery Club statistics are not yet final, this post provides a detailed breakdown of the current statistics.

Kellogg Brown & Root LLC / Halliburton Company / KBR Inc. (Feb. 2009)

Attorneys: Paul, Hastings, Janofsky & Walker LLP

DOJ

Entity: Kellogg Brown & Root LLC

Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violation (4 Counts)

Resolution Vehicle: Criminal Information and Plea Agreement

Benefit Received From Improper Payments: $235.5 Million

Sentencing Guidelines Range: $376.8 Million – $753.6 Million

Amount of Fine: $402 Million

Monitor: Yes – Three Years

SEC

Entity: Halliburton Company, KBR Inc.

Charges: FCPA Books and Records and Internal Controls Violation (Halliburton Company), Substantive FCPA Anti-Bribery Violation, Aiding and Abetting Halliburton’s FCPA Books and Records and Internal Controls Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls (KBR Inc.),

Disgorgement Amount: $177 Million

Technip S.A. (June 2010)

Attorneys: Patton Boggs LLP; Wachtell, Lipton, Rosen & Katz

DOJ

Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violation (1 Count)

Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term – 2 Years, 7 Months)

Value of Benefit Received From Improper Payments: $199 Million

Sentencing Guidelines Range: $318.4 Million – $636.8 Million

Amount of Fine: $240 Million (25% Below Minimum Guidelines Range)

Monitor: Yes – Two Years

SEC

Charges: Substantive FCPA Anti-Bribery Violation, FCPA Books and Records and Internal Controls Violation

Disgorgement Amount: $98 Million

Snamprogetti Netherlands BV, ENI S.p.A (July 2010)

Attorneys: Sullivan & Cromwell LLP

DOJ

Entity: Snamprogetti Netherlands BV

Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)

Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)

Value of Benefit Received From Improper Payments: $214.3 Million

Sentencing Guidelines Range: $300 Million – $600 Million

Amount of Fine: $240 Million (20% Below Minimum Guidelines Range)

Monitor: No

SEC

Entity: Snamprogetti Netherlands BV, ENI S.p.A.

Charges: Substantive FCPA Anti-Bribery Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls (Snamprogetti Netherlands BV), FCPA Books and Records and Internal Controls Violation (ENI S.p.A.)

Disgorgement Amount: $125 Million

[Note in all three of the above corporate actions, the entity received a -2 reduction in the culpability score for cooperation. Snamprogetti’s total culpability score (and thus base fine multiplier) was below that of Kellogg, Brown & Root LLC, and Technip given that the company has fewer employees].

Albert Jackson Stanley (August 2008)

Attorney: Larry Veselka (Smyser, Kaplan & Veselka LLP)

DOJ

Charges: Conspiracy to Violate the FCPA (1 Count), Conspiracy to Commit Mail and Wire Fraud (1 Count)

Resolution Vehicle: Criminal Information and Plea Agreement

Plea Agreement Contemplates an $10.8 Million Restitution Order (the amount Stanley agreed the victim – his former employer – incurred as a monetary loss because of his conduct)

Plea Agreement Contemplates a Sentence of 84 months (subject to a downward departure for cooperation)

SEC

Charges: Substantive FCPA Anti-Bribery Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls

Permanent Injunction

Jeffrey Tesler (March 2009)

Indictment Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violations (10 Counts)

Indictment Seeks Forfeiture $132 Million

Wojciech Chodan (March 2009)

Indictment Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violations (10 Counts)

Indictment Seeks Forfeiture $132 Million

Friday Roundup

By on July 9, 2010 in Control Components Inc., DOJ, Extradition, Flavio Ricotti, Jeffrey Tesler, Wojciech Chodan

Some FCPA developments and news to pass along this Friday.

Additional Prosecutor Joins DOJ FCPA Unit

As reported earlier this week in the New York Times (see here), Jeffrey Knox, a current federal prosecutor in the Eastern District of New York, will soon assume a new position in the DOJ’s FCPA unit. Knox, a prosecutor with extensive terrorism and foreign intelligence gathering experience, describes himself in the NY Times article “as a traditional law-and-order Republican.” Prior to becoming a DOJ prosecutor, Knox was an attorney at Simpson Thacher & Bartlett in New York. For additional coverage, see here from Christopher Matthews at Main Justice.

Flavio Ricotti Extradition

As detailed in this DOJ release, “Flavio Ricotti, a former executive of Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), has been extradited to the United States from Germany in connection with his alleged participation in a conspiracy to secure contracts by paying bribes to officials of foreign state-owned companies as well as officers and employees of foreign and domestic private companies.” According to the release, “Ricotti, 49, of Bientina, Italy, was arrested on Feb. 14, 2010, in Frankfurt, Germany, and arrived in the United States on July 2, 2010.”

As noted in the release:

“Ricotti and five other former executives of CCI were charged on April 8, 2009, in a 16-count indictment (see here) for their alleged roles in the foreign bribery scheme. According to the indictment, Ricotti, who served as CCI’s vice president and head of sales for Europe, Africa and the Middle East from 2001 through 2007, allegedly caused CCI employees and agents to make corrupt payments totaling approximately $750,000 to officers and employees of state-owned companies, and corrupt payments totaling approximately $380,000 to officers and employees of private companies. According to the indictment, these corrupt payments occurred in connection with CCI projects in various countries around the world, including in the United Arab Emirates, Kazakhstan, India and Qatar.”

For more on the CCI matter, see here.

Other foreign nationals facing extradition to the U.S. to face FCPA charges include Jeffrey Tesler, the U.K. agent at the center of the Bonny Island bribery scheme, and Wojciech Chodan, also a U.K. citizen and a former salesperson and consultant of a U.K. subsidiary of Kellogg, Brown & Root. (See here). British judges have ruled that Tesler and Chodan can be extradited to the U.S. and these individuals are appealing that decision. And then of course there is Viktor Kozeny (see here).

A good weekend to all.

Friday Roundup

By on July 9, 2010 in Control Components Inc., Extradition, Flavio Ricotti, Jeffrey Tesler, Wojciech Chodan

Some FCPA developments and news to pass along this Friday.

Additional Prosecutor Joins DOJ FCPA Unit

As reported earlier this week in the New York Times (see here), Jeffrey Knox, a current federal prosecutor in the Eastern District of New York, will soon assume a new position in the DOJ’s FCPA unit. Knox, a prosecutor with extensive terrorism and foreign intelligence gathering experience, describes himself in the NY Times article “as a traditional law-and-order Republican.” Prior to becoming a DOJ prosecutor, Knox was an attorney at Simpson Thacher & Bartlett in New York. For additional coverage, see here from Christopher Matthews at Main Justice.

Flavio Ricotti Extradition

As detailed in this DOJ release, “Flavio Ricotti, a former executive of Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), has been extradited to the United States from Germany in connection with his alleged participation in a conspiracy to secure contracts by paying bribes to officials of foreign state-owned companies as well as officers and employees of foreign and domestic private companies.” According to the release, “Ricotti, 49, of Bientina, Italy, was arrested on Feb. 14, 2010, in Frankfurt, Germany, and arrived in the United States on July 2, 2010.”

As noted in the release:

“Ricotti and five other former executives of CCI were charged on April 8, 2009, in a 16-count indictment (see here) for their alleged roles in the foreign bribery scheme. According to the indictment, Ricotti, who served as CCI’s vice president and head of sales for Europe, Africa and the Middle East from 2001 through 2007, allegedly caused CCI employees and agents to make corrupt payments totaling approximately $750,000 to officers and employees of state-owned companies, and corrupt payments totaling approximately $380,000 to officers and employees of private companies. According to the indictment, these corrupt payments occurred in connection with CCI projects in various countries around the world, including in the United Arab Emirates, Kazakhstan, India and Qatar.”

For more on the CCI matter, see here.

Other foreign nationals facing extradition to the U.S. to face FCPA charges include Jeffrey Tesler, the U.K. agent at the center of the Bonny Island bribery scheme, and Wojciech Chodan, also a U.K. citizen and a former salesperson and consultant of a U.K. subsidiary of Kellogg, Brown & Root. (See here). British judges have ruled that Tesler and Chodan can be extradited to the U.S. and these individuals are appealing that decision. And then of course there is Viktor Kozeny (see here).

A good weekend to all.

An FCPA Triangle

By on November 13, 2009 in DOJ Enforcement Action, Halliburton, Individual Enforcement Action, Jason Steph, Jeffrey Tesler, Jim Bob Brown, KBR, Nigeria, Paul Novak, Third Parties, Willbros Group, Wojciech Chodan

First it was the company – Willsbros Group Inc. (see here).

Then, it was the company’s employees – Jim Bob Brown (see here) and Jason Steph (see here).

Finally, it is the company’s consultant – Paul Novak (see here).

An FCPA triangle of sorts.

Don’t hold your breath waiting for an FCPA square because, as has been noted in previous posts, the final piece of the puzzle … the “foreign official” will not be happening anytime soon as the FCPA only applies to the “briber-giver” not the “bribe-taker.”

As noted in the DOJ release, Novak (a former consultant for Willbros International Inc. – a subsidiary of Willbros Group Inc.) pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA in connection with payments to Nigerian “foreign officials.”

Assistant Attorney General Breuer (the blog’s “person of the week” given his frequent mention here in the last few days) had this to say:

“The use of intermediaries to pay bribes will not escape prosecution under the FCPA. The Department will continue to hold accountable all the players in an FCPA scheme – from the companies and their executives who hatch the scheme, to the consultant they retain to carry it out.”

Of course, there still must be jurisdiction over the consultant, but this was not a problem in the Novak matter as he is a U.S. citizen and thus subject both to territorial jurisdiction (i.e. U.S. nexus – see 78dd-2(a)) or nationality jurisdiction (see 78dd-2(i)).

This isn’t the first time the DOJ has gone after consultants or agents. In March 2009, the DOJ unsealed indictments against U.K. citizens Jeffrey Tesler and Wojciech Chodan for their alleged roles in the KBR/Halliburton Nigeria bribery scheme. (see here for the DOJ release, here for the indictment).

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