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.

Fox's Top Ten For 2011, Corporate Division

By Thomas Fox

As December is a time for reflection on the past twelve months, I have been considering the FCPA Enforcement Action year.

I submit for your consideration my Top 10 FCPA Enforcement Actions for 2011 in the Corporate Division.

Happy Holidays to all!

1.  Alcatel-Lucent ($137 million), or non-cooperation will cost you. -- The company lost between $10 million to $20 million in penalty reduction because its initial investigative counsel did not fully cooperate with the DOJ after self-disclosure.

2. Armor Holdings ($10.29 million), or you can step back from the abyss. -- The company had 92 separate instances of disguising bribes yet was able to obtain a NPA, through self-disclose, cleaning house, remediation and implementing a best practices compliance program.

3. Bridgestone ($28 million), don’t double down a FCPA violation by adding anti-trust violations. -- The company was found to have engaged in both bribery of foreign officials but using such corrupt acts in furtherance of bid-rigging.

4. JGC ($218.8 million), and then there were none. -- The final corporate conclusion of the infamous Bonny Island, Nigeria Bribery Scandal. Joining with previously settled defendants, Halliburton, Technip and Snamprogetti/ENI to bring a total settlement amount of over $1.5 billion.

5.  Johnson & Johnson ($77 million), enhanced compliance obligations, the new normal?-- Not only did J&J agree to implement a minimum best practices compliance program, it also agreed to “enhanced compliance obligations”.

6. Maxwell Technologies ($14.3 million), start your day with a risk assessment. -- One of several cases where the DOJ specified some of the parameters of the risks you should assess to inform your compliance program.

7.  SciClone ($2.5 million to date), or the plaintiff’s bar finds compliance. -- Not an enforcement action but the settlement of a shareholder derivative action during the pendency of a FCPA investigation, where the company agreed to implement a best practices compliance program.

8.  Tenaris ($8.9 million), or the SEC joins the DPA party. -- The first instance of the SEC entering into a Deferred Prosecution Agreement for the settlement of civil FCPA violations.

9.  Tyson’s Foods ($5.2 million) or don’t blame me, I only bribed the wife. -- The company received a DPA for a bribery scheme involving payments for Mexican government officials' wives.

10.  Watts Water ($3.7 million), or it is a good thing to keep up with the news. -- The company’s general counsel read about an enforcement action involving a non-related company in a different industry but with the same sales model as his company and wondered if it might be a FCPA problem for his company. It was.

_____________

Thomas Fox is the creator and writer of the widely-read FCPA Compliance and Ethics Blog. He has practiced law in Houston for 25 years. Tom writes and speaks nationally and internationally on FCPA compliance, indemnities and other forms of risk management for a worldwide energy practice, tax issues faced by multi-national U.S. companies, insurance coverage issues, and protection of trade secrets. He can be contacted here.

Who Paid FCPA-Related Fines Overseas?

Here's a list of fines paid overseas for bribery by companies that have settled FCPA enforcement actions.

There may be others but these are what a friend of the FCPA Blog has found so far.

Of the seventeen spots, Siemens occupies three and sits on top with a whopping $856 million fine paid in Germany.

Nigeria has most often followed FCPA enforcement actions. It appears seven times, the U.K. five times, Germany, Costa Rica, Italy, Norway, and the Holland once each.

The list points to a problem more global companies will face -- bribery prosecutions and penalties in multiple jurisdictions. We talked about the coming chaos in June.

	Company	Country	Total Fines (US$)	Date Reported
1	Siemens	Germany	856,000,000	Dec-08
2	BAE	UK	49,000,000	Feb-10
3	Siemens	Nigeria	46,500,000	Nov-10
4	Halliburton	Nigeria	35,000,000	Dec-10
5	Eni SpA / Snamprogetti	Nigeria	32,500,000	Dec-10
6	Technip	Nigeria	30,000,000	Feb-11
7	JGC Corp	Nigeria	30,000,000	Feb-11
8	Innospec	UK	12,700,000	Mar-10
9	MW Kellogg /KBR	UK	11,400,000	Feb-11
10	Alcatel Lucent	Costa Rica	10,000,000	Jan-10
11	Aon Ltd	UK	8,500,000	Jan-09
12	Johnson & Johnson / DePuy	UK	7,850,000	April-11
13	Tidewater Inc	Nigeria	6,300,000	Mar-11
14	Statoil	Norway	3,000,000	Oct-04
15	Nobel Corp	Nigeria	2,500,000	Jan-11
16	Siemens	Italy	1,200,000	Apr-09
17	Azko Nobel	Holland	600,000	Dec-07