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.

'It's A Growth Industry, Isn't It?'

Jack Stanley's admissions when he pleaded guilty three years ago to conspiracy to violate the FCPA and commit mail and wire fraud were staggering.

The former CEO of KBR helped funnel $182 million in bribes to government officials in Nigeria. 

Judge Keith P. Ellison gave Stanley a preliminary sentence of 84 months in prison (subject to final review after his cooperation) and ordered a $10.8 million restitution payment.

On February 3, Stanley is set to appear again before the judge to learn his final sentence.

Here's a look at what happened during Stanley's initial appearance, arraignment, and plea before Judge Ellison on September 3, 2008. William Stuckwisch was the prosecutor.

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THE COURT: Unless I have forgotten how to do multiplication, six and a half years would be what, 78 months?

MR. STUCKWISCH: That's correct, Your Honor. The [Federal Sentencing] Guidelines range calculated by the Government for Count Two would be 78 to 97 months.

THE COURT: So it is within that Guideline range?

MR. STUCKWISCH: It would be within the Guideline range on Count Two, and then --

THE COURT: I know, Count One would be a lot higher.

MR. STUCKWISCH: Correct.

THE COURT: And in terms of the purposes of punishment, do you think this is primarily as a matter of
general deterrence? I doubt he's a continuing risk, is he?

MR. STUCKWISCH: No, Your Honor, we don't believe he's a continuing risk. It's both -- it's general deterrence in the area of enforcement of the Foreign Corrupt Practices Act. A sentence such as this would send a message to other executives that foreign bribery is taken very seriously and penalties will be paid for violators of the Act. In terms of Mr. Stanley himself, I should note that his conduct here was egregious.

THE COURT: I'm concerned about the conduct. I'm concerned about it.

MR. STUCKWISCH: Yes, Your Honor.

THE COURT: Is this comparable to other sentences that have been imposed pursuant to the Foreign Corrupt Practices Act?

MR. STUCKWISCH: This would be the longest sentence to date in a Foreign Corrupt Practices Act.

THE COURT: That's what I wondered about. I know it's a growth industry, isn't it, the Foreign Corrupt Practices Act? It's keeping a lot of white collar lawyers busy; is that fair?

MR. STUCKWISCH: I think that's fair. I believe the previous longest sentence of an individual in an FCPA case was I believe 60-odd months here in Houston. [Editor's note: sentence of Douglas Murphy, American Rice Inc., 63 months.]

THE COURT: The distinguishing aspects of this one are the dollar volume and the far-ranging nature of the conspiracy?

MR. STUCKWISCH: Those are distinguishing factors, and Mr. Stanley's position at the company. He was the CEO and chairman of his company.

THE COURT: Was it a Halliburton subsidiary; is that right?

MR. STUCKWISCH: We haven't identified the company in the public papers, Your Honor, because of Justice Department Guidelines about identifying uncharged wrongdoers.

THE COURT: Okay.

MR. STUCKWISCH: But if that's important to your consideration --

THE COURT: No, no. I know something about that corporation. He wasn't the chairman of the corporation. It's set forth in the Pretrial Report he was chairman of some subsidiary, I have to believe.

MR. STUCKWISCH: That's right, Your Honor, he was the chairman of a major global engineering and construction services company, business around the world, constructing, among other things, large liquefied natural gas plants, which were at issue in these projects. This case is distinguishable also because of the wide range and high level of the officials, the foreign government officials whom were to be bribed. This scheme is distinguish able from previous cases by the sophistication of the scheme, funneling the bribes through agents and Swiss bank accounts, other foreign bank accounts, shell companies, nominee accounts. I think it's fair to say that this is the largest FCPA prosecution to date.

THE COURT: Well, I'm not trying to play defense counsel, I'm really not, but I'm concerned about this proceeding, as I am about all proceedings. But it appears Mr. Stanley was dealing with a substantial physical dependency during much of this time. Was that factored in?

MR. STUCKWISCH: Yes, Your Honor.

THE COURT: I know the Guidelines don't allow you to, but --

MR. STUCKWISCH: No, it was factored in, Your Honor. We considered not only his conduct here, but his personal circumstances, including his alcoholism and his current health. We've also considered our ongoing investigations and the needs of our investigation and our desire that Mr. Stanley cooperate --

THE COURT: All right. Do you think a 5K [downward sentencing departure based on Substantial Assistance to Authorities] is realistic?

MR. STUCKWISCH: If Mr. Stanley provides substantial assistance, I think a 5K is realistic, yes, Your Honor. And we have every expectation that Mr. Stanley is going to provide substantial assistance, to be perfectly honest. We wouldn't be doing the deal unless we believed that.

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 ....

______________________

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.