Stanley, Tesler, and Chodan Sentencings Postposed

Sentencing of the three individual defendants in the TSKJ Nigeria case has been delayed again.

Jack Stanley, 66, is now set to be sentenced by Judge Keith P. Ellison in Houston on February 23 instead of February 3. The former CEO of KBR pleaded guilty three years ago to helping KBR and its partners pay more than $180 million in bribes to Nigerian officials. The companies won contracts worth $6 billion to build LNG facilities on Bonny Island, Nigeria.

Jeffrey Tesler, 62, a London lawyer who handled $130 million of the bribes, is scheduled to be sentenced in Houston on February 22. After his extradition from the U.K., he pleaded guilty last year to an FCPA conspiracy and a substantive FCPA count. As part of his plea, Tesler already forfeited $149 million to the U.S. Treasury. The money was in about a dozen bank accounts around the world.

The third individual defendant, Wojciech Chodan, 72, was a KBR manager in the U.K. He pleaded guilty in December 2010 to one count of conspiracy to violate the FCPA. He's also set to be sentenced on February 22.

Tesler and Chodan were supposed to be sentenced on February 2.

Stanley received a preliminary sentence of 84 months in prison and was ordered to make a restitution payment of $10.8 million. His jail term hasn't started yet and is subject to review based on his cooperation in the case.

With Stanley's help, enforcement actions against the four TSKJ partners resulted in settlements of $1.65 billion. Those settlements now make up four of the six biggest FCPA cases of all time.

KBR and its one-time parent Halliburton paid $579 million in 2009 to resolve criminal and civil FCPA charges. In 2010, Italy's Snamprogetti paid $365 million to U.S. enforcement agencies, and France's Technip paid $338 million. Then in 2011, JGC paid $218.8 million.

Stanley and Chodan have objected to the government's presentence reports.

Sentencing of the three individual defendants was reset numerous times while the government completed its prosecution of the TSKJ partners.

Marubeni Pays $54.6 Million To Settle TSKJ Nigeria Case

The DOJ said today that Japan's Marubeni Corporation will pay a $54.6 million criminal penalty to resolve FCPA charges for its role as an agent of the KBR-led TSKJ joint venture.

A criminal information filed today against Marubeni in U.S. District Court for the Southern District of Texas charged the company with one count of conspiracy and one count of aiding and abetting violations of the FCPA. The Tokyo-based trading company was given a two-year deferred prosecution agreement.

Marubeni was hired by the four-company TSKJ joint venture to help win contracts to build liquefied natural gas facilities on Bonny Island, Nigeria. The TSKJ partners were Technip S.A., Snamprogetti Netherlands B.V., Kellogg Brown & Root Inc. (KBR), and JGC Corporation. Between 1995 and 2004, the joint venture won four contracts worth more than $6 billion.

TSKJ paid $132 million to a Gibraltar corporation controlled by London lawyer Jeffrey Tesler and $51 million to Marubeni. The money was intended to be used to bribe Nigerian government officials.

The DOJ and SEC have now recovered $1.7 billion in penalties and disgorgement from TSKJ and its agents. Four of the six biggest FCPA cases of all time involve the TSKJ partners. Siemens' $800 million settlement is still the biggest single-company FCPA enforcement action.

In March, Jeffrey Tesler pleaded guilty to an FCPA conspiracy and a substantive count. As part of his plea, Tesler paid $149 million, the biggest FCPA forfeiture by an individual.

Jack Stanley, KBR's former CEO, pleaded guilty in Houston in 2008 to a two-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act and to commit mail and wire fraud.

After Stanley's guilty plea, KBR and its one-time parent Halliburton paid $579 million in 2009 to resolve criminal and civil FCPA charges. In 2010, Italy's Snamprogetti paid $365 million to U.S. enforcement agencies, and France's Technip paid $338 million. Then in 2011, Japan's JGC paid $218.8 million.

Stanley, 66, received a preliminary sentence of 84 months in prison and was ordered to make a restitution payment of $10.8 million. His jail term hasn't started yet and is subject to review based on his cooperation. Final sentencing is set for February 3.

The agent Tesler, 62, is scheduled to be sentenced in federal court in Houston on February 2.

Wojciech Chodan, 72, a former KBR manager in the U.K. who pleaded guilty in December 2010 to one count of conspiracy to violate the FCPA, is also set to be sentenced on February 2.

TSKJ: The FCPA's Whale

In April this year, the final TSKJ partner, Japan's JGC, paid $218.8 million in a plea deal with the DOJ. It was the biggest FCPA case in 2011 (so far) and landed sixth on our all-time top ten list.

The TSKJ settlements now make up four of the six biggest FCPA cases of all time. Together, they're twice the size of Siemens' $800 million settlement, still the biggest single-company FCPA enforcement action.

In March, Jeffrey Tesler, an agent who delivered TSKJ's bribes to Nigerian officials, pleaded guilty to an FCPA conspiracy and a substantive count. As part of his plea, Tesler paid $149 million, the biggest FCPA forfeiture by an individual.

The TSKJ enforcement action started in September 2008. Jack Stanley, KBR's former CEO, pleaded guilty in Houston to a two-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act and to commit mail and wire fraud.

Stanley cooperated with prosecutors. Over the next three years, four companies and two more individuals pleaded guilty, eventually paying $1.65 billion in criminal and civil penalties and forfeited assets.

Stanley and KBR had led the TSKJ joint venture. Between 1995 and 2004, it paid $182 million in bribes to Nigerian government officials, winning four contracts to build liquefied natural gas facilities on Bonny Island, Nigeria worth more than $6 billion.

After Stanley's guilty plea, KBR and its one-time parent Halliburton paid $579 million in 2009 to resolve criminal and civil FCPA charges. In 2010, Italy's Snamprogetti paid $365 million to U.S. enforcement agencies, and France's Technip paid $338 million. Then in 2011, JGC paid $218.8 million.

Stanley, 66, received a preliminary sentence of 84 months in prison and was ordered to make a restitution payment of $10.8 million. His jail term hasn't started yet and is subject to review based on his cooperation. Final sentencing is set for February 3. The feds' $1.65 billion payday is sure to help him.

The agent Tesler, 62, is scheduled to be sentenced on February 2.

Wojciech Chodan, 72, a former KBR manager in the U.K. who pleaded guilty in December 2010 to one count of conspiracy to violate the FCPA, is also set to be sentenced on February 2.

Tesler Also Faces Prison In France

Responding to our post about Jeffrey Tesler's court appearance in Houston earlier this year to plead guilty to conspiracy to violate the Foreign Corrupt Practices Act and a substantive FCPA count, a reader sent a startling note.

The correspondent, who refers to himself as a 'French FCPA Blog addict for years' -- [thanks from us] -- said:

Dear FCPA Blog,

I would just like to add that Mr Tesler is expected to be sentenced in Paris (France) criminal court on 11 June 2012.

His lawyer said Tesler will plead not guilty. He faces ten years of jail for corruption of foreign public officials.

Reminder:

Before the DOJ launched its investigation about the Bonny Island NGL plant (with KBR Halliburton, Technip, ENI Snamprogetti and JGC corp); it was first a French judge, Renaud Van Ruymbeke, who launched an investigation about money laundering with Tri-Star Investments in Gibraltar and links with offshore accounts in Switzerland and Monaco.

Because of France's lack of political will to pursue foreign public bribery (and most of all French companies when they are bribing abroad), the U.S. Treasury won $1.6 billion thanks to this French judge requesting mutual legal assistance from the U.S.

Another example of the difficulty of multi jurisdictional investigations...

Here is the link to the news story (sorry it's in French).

Yours sincerely ....

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Editor's note: Here's what sourcewatch said about the French judge:

Renaud Van Ruymbeke is the French investigating magistrate probing accusations of large-scale bribery and corruption against Halliburton KBR and Technip SA.

Van Ruymbeke has become one of the world's top corruption fighters. With fellow magistrate Eva Joly, he investigated the then-publicly-owned French oil company Elf Aquitaine, which was being used as a private slush fund by French politicians and company executives, winning prison sentences for the former Foreign Minister Roland Dumas and the company's president.

While investigating Elf, Van Ruymbeke discovered a $180 million slush fund, believed by many to have been the conduit for the extravagant bribery of Nigerian officials by the TSKJ consortium.

Van Ruymbeke is also investigating the Bin Laden family financial empire and the possibility that it funneled money to Osama Bin Laden much later than previously claimed. If he discovers such links, the family fortune may be exposed to claims from victims of Osama's terrorist attacks.

Where Is Your Family, Sir?

In March this year, in a federal courtroom in Houston, Jeffrey Tesler, 62, stood before Judge Keith P. Ellison, left, and pleaded guilty to conspiracy to violate the Foreign Corrupt Practices Act and a substantive FCPA count.

Through counsel, the former London lawyer, KBR middleman, and FCPA fugitive said yes, he'd helped pay massive bribes to Nigerian officials on behalf of KBR and the other TSKJ partners. And he agreed to the biggest FCPA-related forfeiture by an individual and third biggest FCPA disgorgement overall -- $149 million.

Then came the moment when Judge Ellison spoke directly to Tesler.

*     *     *

THE COURT: Mr. Tesler, you seem like such an unlikely person to be here.

THE DEFENDANT: I agree with that assumption.

THE COURT: Was it just everybody was doing this?

THE DEFENDANT: I think that's a fair comment.

THE COURT: Where is your family, sir?

THE DEFENDANT: My family is -- my wife and one daughter live in London, England and my other daughter lives in Israel.

THE COURT: You have joint Israeli-English citizenship?

THE DEFENDANT: I have a U.K. passport -- I have an Israel travel document, which I think is pretty close to citizenry, but I don't think it is actually the same.

THE COURT: Is there anything more you would like to say or anything more you would like to ask us, Mr. Tesler?

THE DEFENDANT: Not at this time, Your Honor. . . . .

THE COURT: After hearing everything you have heard, Mr. Tesler, do you wish to plead guilty or not guilty to Counts One and Two of the indictment filed on or about February 17, 2009?

THE DEFENDANT: I do, Your Honor.

THE COURT: You wish to plead guilty?

THE DEFENDANT: I do, yes, Your Honor.

THE COURT: Based on the testimony and based on the plea agreement, the Court finds the defendant is competent and represented by competent counsel. There is an adequate factual basis for the plea, and the plea is knowing and voluntary. The Court does find and hold that the defendant is guilty of Counts One and Two of the indictment filed on or about February 17, 2009.

*     *     *

Jeffrey Tesler is free on $50,000 bond. Sentencing is set for February 2, 2012. He faces up to ten years in prison.

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Download the indictment in U.S. v. Tesler here and the plea agreement here.