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Monday
Jun152015

Trial ends when former PetroTiger boss pleads guilty 

Joseph Sigelman, the former co-CEO of PetroTiger, pleaded guilty today to one criminal count during the third week of his FCPA trial.

Sigelman, 44, pleaded guilty to conspiracy to violate the FCPA. 

The charges is punishable with a a prison sentence of up to five years and up to $250,000 in criminal fines.

U.S. District Judge Joseph E. Irenas of New Jersey scheduled sentencing for 10 am Tuesday (June 16).

Sigelman was charged in a 2014 federal indictment (pdf) with one count of conspiring to violate the FCPA and three counts of violating the FCPA. He also faced charges for conspiracy to commit wire fraud and money laundering.

The DOJ alleged he and others bribed an official at Ecopetrol SA, Colombia’s state-controlled oil company, to win a $39 million contract. He was also charged with defrauding PetroTiger by taking kickbacks.

As part of his plea Monday, he agreed to pay $239,000 in restitution to PetroTiger.

Gregory Weisman, the company's former general counsel, pleaded guilty in November 2013 to one count of conspiracy to violate the FCPA and to commit wire fraud.

Knut Hammarskjold, who served as a co-CEO of PetroTiger, also pleaded guilty to the same charges.

They haven't been sentenced.

PetroTiger is a privately held British Virgin Islands company with operations in Colombia and offices in New Jersey. It provides production testing services to oil and gas companies.

The defendants allegedly made at least four payments in 2010 from PetroTiger’s bank account in the United States to an account in Colombia held by David Duran, an employee of Ecopetrol, worth a total of about $333,500.

Duran was among six arrested in Colombia in March. He no longer works for Ecopetrol. His wife, Johanna Navarro, was also arrested. The DOJ said the bribes to Duran were paid through a phony consulting contract between PetroTiger and Navarro.

PetroTiger won't face criminal charges in the U.S.

In a statement Monday, the DOJ said:

The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which fully cooperated with the department’s investigation. Based on PetroTiger’s voluntary disclosure, cooperation, and remediation, among other factors, the department declined to prosecute PetroTiger.

Sigelman had asked the judge before his trial started to dismiss the FCPA charges against him. He argued that employees of state-owned enterprises aren't "foreign officials" under the FCPA.

In 2012, the FBI interviewed Weisman, the company lawyer, about suspicious overseas payments. While secretly wearing a wire for the FBI, Weisman went to Sigelman’s Miami apartment and asked what he should do.

Sigelman told Weisman to calm down -- “regroup, go on vacation, collect yourself, come out [expletive] strong,” according to court documents.

Judge Irenas ruled that attorney-client privilege didn't shield the taped conversations because Sigelman wasn't a client actively seeking legal advice.

During Sigelman's trial, the defense argued that Weisman tried to falsely incriminate their client in exchange for leniency from the DOJ.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.