Paul G. Novak, 46, was sentenced today to serve 15 months in prison by U.S. District Judge Simeon T. Lake III of the Southern District of Texas. The court took into consideration Novak’s cooperation, and the sentence was consistent with the government’s recommendation. In addition to the prison sentence, Novak was ordered to pay a $1 million fine and to serve two years of supervised release following his release from prison. In sentencing Novak, the court took into consideration the assistance Novak provided the government in ongoing investigations.
Novak pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA. Novak admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian government officials and officials from a Nigerian political party to assist Willbros and its joint venture partner, a construction company based in Mannheim, Germany, in obtaining and retaining the Eastern Gas Gathering System (EGGS) Project, which was valued at approximately $387 million. The EGGS project was a natural gas pipeline system in the Niger Delta designed to relieve existing pipeline capacity constraints.
According to court records, Novak and his alleged co-conspirators Kenneth Tillery, Jason Steph, Jim Bob Brown, three employees from Willbros’s joint venture partner and others agreed to make the corrupt payments to, among others, government officials from the Nigerian National Petroleum Corporation, the National Petroleum Investment Management Services, a senior official in the executive branch of the federal government of Nigeria, and members of a Nigerian political party. Court documents state the bribes were paid to assist in obtaining and retaining the EGGS contract and additional optional scopes of work.
According to information contained in plea documents, to secure the funds for those corrupt payments, Novak and his alleged conspirators caused Willbros West Africa Inc., a subsidiary of Willbros International, to enter into so-called “consultancy agreements” with two consulting companies Novak represented in exchange for purportedly legitimate consultancy services. In reality, those consulting companies were used to facilitate the payment of bribes.
In addition to Novak, to date, two Willbros employees have pleaded guilty for their roles in the EGGS bribery scheme, and Willbros has entered into a deferred prosecution agreement with the government:
- On May 14, 2008, Willbros Group Inc. and Willbros International entered into a deferred prosecution agreement with the government and agreed to pay a $22 million penalty, in connection with the company’s payment of bribes to government officials in Nigeria and Ecuador. On March 30, 2012, the government moved to dismiss the charges following Willbros’s satisfaction of its obligations under the deferred prosecution agreement, and on April 2, 2012, the Court granted the United States’ motion.
- On Sept. 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and in connection with his role in making corrupt payments in Ecuador. After a reduction for cooperation, Brown was sentenced on Jan. 28, 2010, to 12 months and one day in prison, two years of supervised release and a $17,500 fine.
- On Nov. 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. After a reduction for cooperation, Steph was sentenced on Jan. 28, 2010, to 15 months in prison, two years of supervised release and a $2,000 fine.
Kenneth Tillery was charged, along with Novak, for his alleged role in the bribery scheme in an indictment unsealed on Dec. 19, 2008. According to the indictment, Tillery was a Willbros International employee and executive from the 1980s through January 2005. From 2002 until January 2005, Tillery served as executive vice president and, later, as president of Willbros International. Tillery remains a fugitive. The charges against Tillery are merely accusations, and he is presumed innocent unless and until proven guilty.
The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad. Significant assistance was provided by the Criminal Division’s Office of International Affairs. This case is being prosecuted by Senior Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.