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FCPA Blog Daily News

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Thursday
Jan272011

Agent's Sentencing Delayed

In Washington, D.C. yesterday, federal district court judge Ellen Huvelle delayed the sentencing of Ousama Naaman. She reset the hearing for April 18.

Naaman, 61, was Innospec's former agent in Iraq. He was extradited from Germany last year and pleaded guilty in June to conspiracy and to violating the Foreign Corrupt Practices Act.

The government wants him sentenced to seven and half years in prison. In a memorandum to the court, prosecutors said under the federal guidelines, Naaman should receive a ten-year sentence.

Naaman's lawyers are asking for a sentence of time served, arguing that he's already spent "just shy of a year in prison [in Germany awaiting extradition], and another seven months under strict conditions of release" in the U.S.

The government said Naaman admitted in his plea that as Innospec's agent for seven years, he helped pay $4 million in kickbacks to the Iraqi government and more than $3.5 million in bribes to senior Iraqi government officials. The bribes helped win contracts to sell a gasoline additive to the Iraqi Ministry of Oil that earned more than $50 million in profits for Innospec, the DOJ said.

In arguing for a long jail sentence, the government said Naaman personally made $2.7 million on the tainted deals and would have made $5.3 million more if the DOJ hadn't discovered the bribes. Prosecutors argued that Naaman also had Innospec pay $155,000 in bribes to block a competitor from the market.

The government said Naaman kept some of Innospec's bribe money for himself, and in all earned $8.8 million from his criminal conspiracy.

Earlier this week, Innospec's former CFO and CEO settled civil FCPA charges with the SEC by paying about $229,000 in disgorgement and penalties. The SEC charged Paul W. Jennings with falsely certifying to auditors from 2004 through 2009 that he had complied with Innospec's Foreign Corrupt Practices Act compliance policy. Jennings, however, knew about Innospec's bribery in Iraq and Indonesia and personally approved some of the payments.

In March last year, Innospec 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 is now free on personal recognizance pending his sentencing.

A copy of the government's January 22, 2011 sentencing memorandum in U.S. v. Naaman can be downloaded here.

Download a copy of Naaman's memorandum in aid of sentencing (92 pages) can be downloaded here.

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