Oussama Naaman, Innospec's one-time agent who pleaded guilty in June to criminal FCPA and conspiracy charges, and David Turner, a former business director at the company, settled civil charges today based on violations of the Foreign Corrupt Practices Act.
Turner, 55, is a U.K. citizen. Naaman, 61, is a dual citizen of Canada and Lebanon.
The SEC said they engaged in widespread bribery of Iraqi government officials under the U.N. oil-for-food program to sell leaded gasoline additive Tetra Ethyl Lean (TEL), and continued the bribery after the oil-for-food program ended. Turner also violated the FCPA by paying bribes to Indonesian officials to sell TEL to state-owned oil companies.
Turner agreed to disgorge $40,000 to the SEC. He wasn't required to pay any civil penalty. The SEC said he provided "extensive and ongoing cooperation in the investigation." Naaman agreed to disgorge $810,076 plus prejudgment interest of $67,030, and pay a civil penalty of $438,038. The civil penalty will be offset by any criminal fine he pays.
From 1995 to 2008, Naaman was an agent of U.S.-based Innospec in Iraq. In March this year, the specialty chemical-maker reached a $40 million global settlement of more than a dozen criminal charges in the U.S. and U.K., including FCPA and U.N. oil for food program offenses, and violations of the U.S. embargo against Cuba.
Naaman pleaded guilty in June this year to a two-count criminal information. He was arrested in July 2009 in Frankfurt, Germany. The Justice Department extradited him to the United States. In a superseding information, he was charged under 18 U.S.C. §371 with conspiracy to defraud the U.N. oil-for-food program and to violate both the antibribery and books and records provisions of the FCPA. In the second count, he was charged under 15 U.S.C. §78dd-l with violating the FCPA and under 18 U.S.C. §2 as an aider and abettor.
The SEC said after his extradition to the United States, Naaman cooperated. No date has been set for his sentencing in the criminal case.
In the SEC's civil case, Naaman and Turner consented to the entry of final judgments that permanently enjoin them from violating Exchange Act Sections 30A and 13(b)(5) and Rule 13b2-1, and from aiding and abetting Innospec’s violations of Exchange Act Sections 30A, 13(b)(2)(A) and 13(b)(2)(B), and as to Turner, from violating Rule 13b2-2.
In Iraq, Innospec's bribery to sell TEL began under the oil-for-food, which ran from 2001 to 2003, and continued until at least to 2008. Namaan arranged bribes there of $1.6 million and promised $884,480 more. In Indonesia, Turner helped Innospec pay more than $6.3 million in bribes from 2000 to 2005 to sell TEL. The company promised at least $2.8 million more in bribes to both Iraqi ministries and government officials and to Indonesian government officials. The SEC said Innospec obtained contracts in exchange for the bribes that it paid and promised worth about $176 million.
The SEC said it had help in the case from the U.K.'s Serious Fraud Office.
Innospec Inc. trades on NASDAQ under the symbol IOSP.
View the SEC's Litigation Release No. 21615 (August 5, 2010) in Securities & Exchange Commission v. David P. Turner and Ousama M. Naaman, Civil Action No. 1:10-CV-01309 (D.D.C.) (RMC) here.
Download the SEC civil complaint againt Naaman and Turner here.
View the SEC's litigation release No. 21454 / March 18, 2010 in Securities & Exchange Commission v. Innospec, Inc., Civil Action No. 1:10-cv-00448 (RMC) (D.D.C.) here.
Download a copy of the SEC's civil complaint against Innospec here.
View the DOJ's March 18, 2010 release here.
Download a copy of the March 17, 2010 criminal information in U.S. v. Innospec, Inc. here.
Download a copy of the government's sentencing memorandum re Innospec here.
Download a copy of Innospec's March 18, 2010 plea agreement here.
View the Serious Fraud Office's March 18, 2010 release here.
Download a copy of the June 24, 2010 superseding information in U.S. v. Ousama M. Naaman here.
Download a copy of Naaman's June 25, 2010 plea agreement with the DOJ here.