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FCPA Blog Daily News

« Not All Corruption Is Created Equal | Main | Freeh Named Daimler Monitor »
Thursday
Mar252010

Tesler Loses Extradition Hearing

A judge in London said Thursday the U.K. lawyer accused of being a middleman in KBR's bribery of Nigerian officials should be extradited to the U.S. to face trial.

Jeffrey Tesler, 61, a U.K. citizen, was indicted in February 2009 by a federal grand jury in Houston. He was charged with one count of conspiring to violate the Foreign Corrupt Practices Act and ten substantive FCPA offenses. If convicted on all counts, he faces up to 55 years in prison. U.K. police, acting at the request of U.S. authorities, arrested Tesler in March 2009.

The Guardian newspaper's Rob Evans said the judge "rejected Tesler's argument that it would be 'unjust and oppressive' to send him to America as prosecutors had taken a long time to charge him. He argued that he would no longer be able to get a fair trial in the US. However the judge pointed out that he was responsible for part of this delay, as he had hired lawyers to block prosecutors obtaining evidence from Switzerland. Prosecutors, who have been investigating the allegations for at least seven years, say that the corrupt payments were laundered via bank accounts there and in Monaco."

The U.S. indictment charged Tesler with using his Gibraltar company, Tri-Star Investments, to funnel about $132 million in bribes to Nigerian officials. The payments were intended to secure contracts worth more than $6 billion to build liquefied natural gas facilities on Nigeria's Bonny Island. The DOJ said Tesler was acting for a joint venture known as TSKJ, equally owned by KBR, Technip of France, Snamprogetti of Italy, and JGC of Japan.

A year ago, Houston-based KBR pleaded guilty to one conspiracy count and four substantive counts of violating the Foreign Corrupt Practices Act through its role in TSKJ. It also settled civil charges with the SEC. KBR's criminal fine was $402 million and, with its former parent Halliburton, it agreed to pay the SEC $177 million in disgorgement.

French company Technip said last month it has reserved €245 million for a potential settlement of FCPA offenses with the Justice Department and SEC for its role in the TSKJ Nigeria joint venture. A few weeks later, Italian energy giant ENI, Snamprogetti's former owner, said it had reserved €250 million for a possible FCPA settlement.

Tesler has argued that the case against him has no connection to the U.S. because the bribery didn't originate or happen there. But lawyers for the U.K. and U.S. governments argued that U.S.-based companies were involved and money had been channelled through U.S. bank accounts.

In his indictment, the U.S. also said Tesler was subject to the FCPA as an "agent" of an "issuer," of a "domestic concern," and of a "person," all within the meaning of the FCPA (Title 15, U.S.C. §§78dd- 1, 78dd-2, and 78dd-3). 

The Guardian said Tesler's lawyers plan to appeal and that the review process would be "lengthy."

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