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U.S. v. Saybolt North America, Inc. and Saybolt, Inc.

 
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Saybolt - Saybolt North America, Inc.
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DOJ Criminal
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August 18, 1998
:
U.S. v. Saybolt North America, Inc. and Saybolt, Inc.
:
U.S. v. Saybolt North America Inc. and Saybolt Inc., Cr. No. 98CR10266WGY, (D. Mass. 1998)
:
In this early FCPA M&A case, the fine was paid by the acquirer out of an escrow account held back from the purchase price.

The case began as an EPA investigation and involves non-U.S. individual defendants, one of whom remains a fugitive. While cooperating in an EPA investigation, the Company did not disclose the FCPA facts before the government learned of them from another source, and therefore did not receive credit for cooperation in the plea agreement.

The company claimed its FCPA violations resulted from its reliance on the advice of counsel, who the shareholders later sued for malpractice.

In contrast to more recent practice, the company was not required to retain a monitor.
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Utilities-Oil
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Panama
:
1994; 1995
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Panamanian government officials
:
Saybolt North America, Inc. ("Saybolt N.A.") is the parent company of Saybolt, Inc. Saybolt N.A. is in turn a subsidiary of Saybolt International, a Dutch company. Saybolt, Inc. had supervisory authority over various non U.S. Saybolt companies, among them Saybolt de Panama, another subsidiary of Saybolt International. The government's investigation of Saybolt began with allegations of data falsification at its lab facilities in Massachusetts. The company was in the process of being acquired by Core Laboratories N.V. and cooperated in this investigation. However, during the investigation, the EPA's criminal investigation division discovered illegal bribes made in Panama at the direction of Saybolt, Inc. that had not been previously disclosed to the government. Accordingly, in the plea agreement, Saybolt was given cooperation credit in the EPA, but not in the FCPA, matter.

These bribes were made to various Panamanian government officials in order to obtain a lease of a favorable location on the Panama canal. The payments were authorized at a board meeting held in New Jersey, attended by David H. Mead, CEO of Saybolt N.A. and director of Saybolt International who also supervised Saybolt de Panama, Frerick Pluimers, the chairman of the parent company, and Philippe Schreiber, a U.S. lawyer who was a director of Saybolt N.A. During the meeting, Schreiber advised the board that people went to jail for making these types of payments, and thereafter the company decided to make the payments using funds from the Dutch parent, rather than from the U.S. company, in an attempt to evade the FCPA. An employee of Saybolt, Inc. was sent to Panama to oversee the cash payment, which consisted of funds from Saybolt International rather than Saybolt N.A. Upon discovery of these illegal payments and incidents of data falsification, the DOJ brought criminal proceedings against both Saybolt N.A. and Saybolt, Inc. The first set of charges, brought only against Saybolt, Inc., consisted of conspiracy to falsify data. The second set of charges, brought against both Saybolt, Inc. and Saybolt N.A., consisted of conspiracy to violate the FCPA and violation of the FCPA's anti-bribery provisions. Saybolt, Inc. and Saybolt N.A. pled guilty to all charges. Pursuant to a plea agreement, Saybolt, Inc. agreed to pay $3,400,000 in fines for its data falsification violations. For the foreign bribery violation, Saybolt N.A. paid a fine of $1,500,000. Saybolt N.A. also served a term of five years probation and established a compliance program as part of the agreement. In addition, the government charged Mead and Pluimers with violating and conspiring to violate the FCPA's anti-bribery provisions. In a related action, Saybolt brought a malpractice claim against Schreiber on these facts.
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Anti-bribery (Domestic Concern)
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Fine, Plea
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Although both Saybolt North America Inc. and Saybolt Inc. entered guilty pleas, the sentence was calculated and imposed collectively. Accordingly, see Saybolt Inc. for the details of the sanction.
:
Not stated.
:
0
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See Saybolt Inc.
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Domestic Concern
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U.S.
:
Not stated.
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Cash, Wire/check
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Direct
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50,000
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Panama
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Netherlands
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Includes obtaining a lease in a free trade zone from which to do business.
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Yes
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No