Category Archives: Criminal Division OIA

Parker Drilling Company Resolves FCPA Investigation and Agrees to Pay $11.76 Million Penalty

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Parker Drilling Company Resolves FCPA Investigation and Agrees to Pay $11.76 Million Penalty
 Parker Drilling Company, a publicly listed drilling-services company, headquartered in Houston, has agreed to pay an $11.76 million penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for authorizing payment to an intermediary, knowing that the payment would be used to corruptly influence the decisions of a Nigerian government panel reviewing Parker Drilling’s adherence to Nigerian customs and tax laws.  Acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia announced the charges.

The investigation of Parker Drilling stemmed from the Justice Department’s Panalpina-related investigations, which previously yielded criminal resolutions with Panalpina and five oil and gas service companies and subsidiaries and resulted in more than $156 million in criminal penalties.

Today, the department filed a deferred prosecution agreement and a criminal information against Parker Drilling in U.S. District Court for the Eastern District of Virginia.  The one-count information charges Parker Drilling with violating the FCPA’s anti-bribery provisions.

According to court documents, in  2001 and 2002, Panalpina World Transport (Nigeria) Limited, working on Parker Drilling’s behalf, avoided certain costs associated with complying with Nigeria’s customs laws by fraudulently claiming that Parker Drilling’s rigs had been exported and then re-imported into Nigeria.  In late 2002, Nigeria formed a government commission, commonly called the Temporary Import (TI) Panel, to examine whether Nigeria’s Customs Service had collected certain duties and tariffs that Nigeria was due. In December 2002, the TI Panel commenced proceedings against Parker Drilling.  The TI Panel later determined that Parker Drilling had violated Nigeria’s customs laws and assessed a $3.8 million fine against Parker Drilling.

According to court documents, rather than pay the assessed fine, Parker Drilling contracted indirectly with an intermediary agent to resolve its customs issues.  From January to May 2004, Parker Drilling transferred $1.25 million to the agent, who reported spending a portion of the money on various things including entertaining government officials.  Emails in which the agent requested additional money from Parker Drilling referenced the agent’s interactions with Nigeria’s Ministry of Finance, State Security Service, and a delegation from the president’s office.  Two senior executives within Parker Drilling at the time reviewed and approved the agent’s invoices, knowing that the invoices arbitrarily attributed portions of the money that Parker Drilling transferred to the agent to various fees and expenses.  The agent succeeded in reducing Parker Drilling’s TI Panel fines from $3.8 million to just $750,000.

Under the terms of the agreement, the Justice Department agreed to defer prosecution of Parker Drilling for three years.  Parker Drilling agreed, among other things, to implement an enhanced compliance program and internal controls capable of preventing and detecting FCPA violations, to report periodically to the department concerning Parker Drilling’s compliance efforts, and to cooperate with the department in ongoing investigations.  If Parker Drilling abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the term of the agreement expires.

In entering into the deferred prosecution agreement with Parker Drilling, the Justice Department took into account a number of considerations.  Parker Drilling conducted an extensive, multi-year investigation into the charged conduct; engaged in widespread remediation, including ending its business relationships with officers, employees, or agents primarily responsible for the corrupt payments, enhancing scrutiny of high-risk third-party agents and transactions, increasing training and testing requirements, and instituting heightened review of proposals and other transactional documents for all the company’s contracts; otherwise significantly enhanced its compliance program and internal controls; and agreed to continue to cooperate with the department in any ongoing investigation of the conduct.

Parker Drilling also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC) charging Parker Drilling with violating the FCPA’s anti-bribery, books and records, and internal controls provisions.  As part of that settlement, Parker Drilling agreed to pay $3.05 million in disgorgement and $1.04 million in prejudgment interest relating to those violations.

The criminal case is being prosecuted by Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jasmine Yoon of the U.S. Attorney’s Office for the Eastern District of Virginia, and is being investigated by the FBI. The department’s Office of International Affairs assisted in the investigation.  The department also acknowledges and is grateful for the assistance of the Crown Prosecution Service, the United Kingdom’s Metropolitan Police Service, and SEC.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Obstruction Charges Filed in Ongoing Fcpa Investigation into Alleged Guinean Mining Rights Bribe Scheme

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Frederic Cilins, 50, a French citizen, has been arrested and accused of attempting to obstruct an ongoing investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea.

Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Preet Bharara, the U.S. Attorney for the Southern District of New York; and George Venizelos, the Assistant Director in Charge of the FBI’s New York Field Office, made the announcement.

“Mr. Cilins is charged with scheming to destroy documents and induce a witness to give false testimony to a grand jury investigating potential violations of the Foreign Corrupt Practices Act,” said Acting Assistant Attorney General Raman.  “The Justice Department is committed to rooting out foreign bribery, and we will not tolerate criminal attempts to thwart our efforts.”

“A grand jury can never learn the truth, and justice cannot prevail, where documents are intentionally destroyed and testimony is tainted by lies,” said U.S. Attorney Bharara.  “As alleged, Frederic Cilins attempted to obstruct a significant investigation by corrupting evidence and testimony in precisely those ways.  With today’s arrest, he now begins his own path to justice for his alleged conduct.”

“As alleged, Cilins attempted to buy evidence he sought to destroy,” said FBI Assistant Director in Charge Venizelos.  “The destruction of evidence was in furtherance of Cilins’s alleged effort to obstruct an investigation into a bribery scheme. In effect, he was allegedly willing to commit bribery in an effort to cover up a bribery.”

Cilins was arrested in Jacksonville, Fla., on April 14, 2013, and a criminal complaint was filed in the Southern District of New York today charging Cilins with tampering with a witness, victim or informant; obstructing a criminal investigation; and destroying, altering or falsifying records in a federal investigation.  The obstruction charge carries a maximum penalty of five years in prison, and the tampering and record-destruction charges each carry a maximum penalty of 20 years in prison. Cilins made an initial appearance in the Middle District of Florida and was detained pending a detention hearing scheduled for April 18, 2013.

According to the complaint, Cilins allegedly attempted to obstruct an ongoing federal grand jury investigation concerning potential violations of the Foreign Corrupt Practices Act and laws proscribing money laundering.  The complaint states the federal grand jury is investigating whether a particular mining company and its affiliates – on whose behalf Cilins has been working – transferred into the United States funds in furtherance of a scheme to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region.  During monitored and recorded phone calls and face-to-face meetings, Cilins allegedly agreed to pay substantial sums of money to induce a witness to the bribery scheme to turn over documents to Cilins for destruction, which Cilins knew had been requested by the FBI and needed to be produced before a federal grand jury.  The complaint also alleges that Cilins sought to induce the witness to sign an affidavit containing numerous false statements regarding matters under investigation by the grand jury.

The complaint alleges that the documents Cilins sought to destroy included original copies of contracts between the mining company and its affiliates and the former wife of a now-deceased Guinean government official, who at the relevant time held an office in Guinea that allowed him to influence the award of mining concessions.  The contracts allegedly related to a scheme by which the mining company and its affiliates offered the wife of the Guinean official millions of dollars, which were to be distributed to the official’s wife as well as ministers or senior officials of Guinea’s government whose authority might be needed to secure the mining rights.

According to the complaint, the official’s wife incorporated a company in 2008 that agreed to take all necessary steps to secure the valuable mining rights for the mining company’s subsidiary.  That same contract stipulated that $2 million was to be transferred to the official’s wife’s company and an additional sum was to be “distributed among persons of good will who may have contributed to facilitating the granting of” the valuable mining rights.  According to the complaint, in 2008, the mining company and its affiliates also “commit to giving 5% of the shares of stock” in particular mining areas in Guinea to the official’s wife.

A complaint is merely an accusation, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being prosecuted by Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Elisha J. Kobre of the Southern District of New York.  The case is being investigated by the FBI.  The Justice Department’s Office of International Affairs and Office of Enforcement Operations have also assisted in the investigation.

Two Former Hospital Execs Sentenced For Kickback Scheme

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FOR IMMEDIATE RELEASE
WEDNESDAY, OCTOBER 17, 2012
WWW.JUSTICE.GOV		 AT
(202) 514-2007
TTY (866) 544-5309

TWO FORMER HOSPITAL EMPLOYEES SENTENCED TO SERVE TIME IN
PRISON FOR PARTICIPATING IN KICKBACK SCHEMES AT NEW YORK CITY
HOSPITAL

WASHINGTON — Two former high-ranking employees of facilities operations at New York Presbyterian Hospital (NYPH) were sentenced in U.S. District Court for the Southern District of New York, in Manhattan, by Judge George B. Daniels today for their participation in two separate conspiracies involving kickbacks, the Department of Justice announced today.

Santo Saglimbeni, a former vice president of facilities operations at NYPH, was sentenced to serve 48 months in prison and ordered to pay a $250,000 criminal fine. Emilio “Tony” Figueroa, a former director of facilities operations at NYPH, was sentenced to serve 36 months in prison and ordered to pay a $25,000 criminal fine. Saglimbeni and Figueroa were ordered to jointly and severally pay $603,982 in total restitution to NYPH. Judge Daniels also entered a preliminary order of forfeiture for $2.3 million, which included certain bank accounts into which the kickback money from one of the schemes was deposited, as well as a parcel of land purchased with a portion of the kickback money, in Southampton, N.Y.

“Today’s sentences are consistent with the serious nature of the crimes for which the individuals were convicted,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. “The division remains committed to holding accountable corrupt purchasing officials who undermine the competitive bidding process for their personal gain.”

On Feb. 2, 2012, after a four-week trial, Saglimbeni and Figueroa, along with Michael Yaron and two companies owned by him—Cambridge Environmental & Construction Corp., doing business as National Environmental Associates (Cambridge/NEA), and Oxford Construction & Development Corp.; Moshe Buchnik, the president of an asbestos abatement company doing business at NYPH; and Artech Corp., a sham company Saglimbeni created in the name of his mother, were each convicted of conspiracy to defraud NYPH. Additionally, Yaron, Cambridge/NEA, Oxford, Buchnik, Saglimbeni and Artech were also convicted of a wire fraud violation.

According to evidence presented at trial, the scheme to defraud NYPH centered on Saglimbeni, who with the assistance of Figueroa, awarded asbestos abatement, air monitoring and general construction contracts to Yaron, Buchnik and their companies in return for more than $2.3 million in kickbacks paid to Saglimbeni. A portion of those kickbacks were funneled by Yaron to Saglimbeni through Artech.

On July 31, 2012, Saglimbeni and Figueroa each pleaded guilty to additional mail fraud conspiracy and mail fraud violations. These charges were part of the same indictment but had been severed and were scheduled for a separate trial. According to the superseding indictment, the fraud scheme also centered on Saglimbeni, who with the assistance of Figueroa, awarded heating, ventilation and air conditioning (HVAC) contracts to an HVAC vendor in return for kickbacks in the form of cash goods and services paid to Saglimbeni and Figueroa.

On July 10, 2012, Yaron, Buchnik and the three companies were sentenced for their respective roles in the scheme. Yaron was sentenced to serve 60 months in prison and ordered to pay a $500,000 criminal fine. Buchnik was sentenced to serve 48 months in prison and ordered to pay a $500,000 criminal fine. Yaron’s companies, Cambridge/NEA and Oxford Construction, were each sentenced to pay a $1 million criminal fine. Artech was also sentenced to pay a $1 million criminal fine. Including Saglimbeni and Figueroa, 15 individuals and six companies have been convicted or pleaded guilty as a result of this investigation and have been sentenced to pay a total of more than $4 million in criminal fines and to serve more than 16 years in prison.

This antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to the award of contracts by the facilities operations department of NYPH was conducted by the Antitrust Division’s New York Field Office with the assistance of the FBI and the Internal Revenue Service – Criminal Investigation’s New York Field Office. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance. Anyone with information concerning bid rigging, bribery, tax offenses or fraud related at NYPH should contact the Antitrust Division’s New York Field Office of the at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s New York Division at 212-384-1000.

Army Sergeant Pleads Guilty to Facilitating Theft of Fuel in Afghanistan

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FOR IMMEDIATE RELEASE
Wednesday, October 10, 2012
Army Sergeant Pleads Guilty to Facilitating Theft of Fuel in Afghanistan
Second Guilty Plea Stemming from an Investigation of Fuel Theft at FOB Fenty in Afghanistan

WASHINGTON – U.S. Army Sergeant Christopher Weaver pleaded guilty today to bribery charges for his role in the theft of fuel at Forward Operating Base (FOB) Fenty, near Jalalabad, Afghanistan, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer.

Weaver, 29, of Fort Carson, Colo., pleaded guilty before U.S. District Judge Marcia S. Krieger in the District of Colorado to one count of conspiracy to commit bribery and one count of bribery.

Weaver’s plea is the second guilty plea arising from an investigation into fuel thefts at FOB Fenty.  On Aug. 3, 2012, Weaver’s co-conspirator Jonathan Hightower, 30, of Houston, pleaded guilty for his role in the scheme.

According to court documents, from approximately January 2010 through June 2010, Weaver and Hightower were involved in overseeing the delivery of fuel from FOB Fenty to other military bases.  As part of this process, documents generally described as “transportation movement requests” (TMRs) were created, which authorized the movement of the fuel.  Weaver pleaded guilty to participating in a conspiracy in which fraudulent TMRs, which purported to authorize the transport of fuel from FOB Fenty to other military bases, were created even though no legitimate fuel transportation was required.  After the trucks were filled with fuel, these fraudulent documents were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint in order to justify the trucks’ departures from FOB Fenty.  In truth, according to court documents, the fuel was simply stolen.

Weaver pleaded guilty to receiving payments from a representative of a military contractor that was responsible for transporting fuel in Afghanistan in exchange for facilitating the theft of approximately 100 fuel trucks.  According to Weaver’s signed plea agreement, the loss to the United States as a result of the scheme was in excess of $1.5 million.  According to court documents, Weaver sent cash back from Afghanistan to the United States, in part, by mailing the money inside a stuffed bear.

According to court documents, Hightower worked in Afghanistan as an employee of FLUOR Inc., a U.S. government contractor, from January 2010 to June 2010, where he served as a petroleum supply specialist and was responsible for receiving and disbursing fuel – primarily jet fuel known as JP-8 – for use at FOB Fenty or for transport to other military bases.  According to court documents, Hightower, Weaver and others would receive cash from a representative of a military contractor that was responsible for transporting fuel in Afghanistan, and the money would be apportioned among the conspirators.

Hightower pleaded guilty before U.S. District Judge William J. Martinez in the District of Colorado to two counts of conspiracy to receive bribes – one count involving his conspiracy with Weaver, and another count involving his conspiracy with another alleged co-conspirator at FOB Fenty.  Hightower admitted facilitating the theft of over 100 trucks of fuel and a loss to the United States in excess of $1.5 million.

The cases are being prosecuted by Assistant U.S. Attorney Mark W. Pletcher of the U.S. Attorney’s Office for the Southern District of California, formerly of the Criminal Division’s Fraud Section, and Special Trial Attorney Mark H. Dubester of the Fraud Section.  The cases were investigated by the Special Inspector General for Afghanistan Reconstruction; the Department of the Army, Criminal Investigations Division; the Defense Criminal Investigative Service; the FBI; and the Department of the Air Force, Office of Special Investigations.  Valuable assistance was also provided by the Justice Department’s Office of International Affairs.