This previous post highlighted a DOJ criminal enforcement action against Paulinus Iheanacho Okoronkwo (also known as Pollie – a dual citizen of the U.S. and Nigeria who resides in California).
Pollie was an attorney admitted to the State Bar of California and the “sole proprietor of the Law Office of Pollie Okoronkwo where he practiced immigration law and personal injury matters, such as slip-and-fall and motor vehicle injury cases.”)
The indictment alleged that Okoronkwo was also a “foreign official serving as the general manager of the NNPC’s [Nigerian National Petroleum Corporation] Upstream Division” and further alleged the following relevant background.
“In or about 1998, Addax [a wholly-owned subsidiary of Sinopec Group (a Chinese SOE), was an international oil and gas corporation headquartered in Geneva, Switzerland, with a strategic focus on Africa and the Middle East] entered into a production sharing contract with the NNPC. In or about 2001, Addax and the NNPC negotiated a “side letter” to the original production sharing contract that provided favorable fiscal terms for Addax with respect to tax and royalty payments that it was required to make to the government of Nigeria. Following negotiation of the side letter, Addax and the Nigerian government had ongoing disputes concerning the calculation of tax and royalty payments.
In or about 2012, after years of failing to reach an agreement, the government of Nigeria nullified the favorable fiscal terms that had been conferred in the 2001 side letter and began to recoup past benefits that had been conferred to Addax by “overlifting,” i.e., keeping a greater share of the oil that Addax extracted than the quantity agreed upon. By in or about the end of August 2014, the government of Nigeria had recouped approximately $510 million in past benefits conferred on Addax.
Addax calculated that, if the 2001 side letter were rescinded, Addax would be obligated to repay approximately $2.76 billion for the period from 2001 to 2014 and would be deprived of approximately $2.37 billion in future benefits. Accordingly, Addax stood to incur losses in excess of $5 billion if the side letter dispute was not successfully resolved.
Addax filed a lawsuit in Nigeria for breach of contract against the NNPC. On May 25, 2015, in the last few days of the administration of Nigerian President Jonathan Goodluck, Addax and the NNPC entered into a settlement agreement in which the favorable financial terms of the 2001 side letter were reinstated and future liabilities that Addax faced were nullified.
By no later than on or about September 7, 2015, new Nigerian President Muhammadu Buhari left in place the portions of the settlement agreement resolving disputes over past benefits that Addax received but nullified the portion of the agreement that guaranteed that those terms would be kept in place going forward. Addax had calculated that the failure to apply the side letter prospectively would cost Addax approximately $2.37 billion.”
Under the heading, “The Illegal Bribery Scheme,” the indictment alleged:
“On or about October 26, 2015, Addax signed an engagement letter with the “Law Office of Pollie Okoronkwo,” purportedly based in Lagos, Nigeria. Per the terms of the letter, Addax agreed to pay $5,263,157.89, including an immediate payment of $2,105,263.16, purportedly in exchange for firm’s work as “Consultants for the negotiation and completion of a Settlement Agreement with NNPC” with respect to Addax’s dispute over drilling rights. The engagement letter also included wiring instructions that directed payment to the OKORONKWO IOLTA [Interest on Lawyers Trust Account]. In reality, the engagement letter was a ruse intended to conceal the fact that Addax’s payment to Okoronkwo constituted a bribe in exchange for his influence in securing more favorable financial terms relating to Addax’s extraction of crude oil in Nigeria, and the purported Lagos address for the Law Office of Pollie Okoronkwo housed a different business.
On or about October 28, 2015, Addax caused a bribe of approximately $2,105,263 to be transmitted to the OKORONKWO IOLTA by means of an international wire.
To ensure the favorable financial terms Okoronkwo sought on Addax’s behalf were not later revoked or revised, Okoronkwo and Addax took steps to conceal from governmental authorities, auditors, and the public Addax’s transfer of funds to the OKORONKWO IOLTA.”
Last week Okoronkwo was found guilty at trial of three counts of transactional money laundering, one count of tax evasion, and one count of obstruction of justice. (See here for the DOJ release).
The U.S. prosecution of an alleged “foreign official” in connection with a foreign bribery scheme once again begs the question – raised several times on these pages – whether the Foreign Extortion Prevention Act (FEPA) was even needed given that the DOJ has successfully prosecuted numerous “foreign officials” in connection with bribery schemes using other criminal statutes.
