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U.S. v. El Paso Corporation

 
:
El Paso Corporation
:
DOJ Criminal
:
February 5, 2007
:
U.S. v. El Paso Corporation
:
In this Oil-for-Food matter, the non-prosecution agreement covers civil violations of regulations administered by the Office of Foreign Assets Control. The DOJ sought and obtained forfeiture and planned to transfer the amount obtained to the Development Fund of Iraq.
:
Energy (Non-Utility)-Oil & Gas-Petrochemicals
:
Iraq
:
2001; 2002
:
In April 1995, the U.N. adopted Security Council Resolution 986 which permitted Iraq to sell its oil and to use proceeds from those sales to purchase humanitarian supplies such as food for the Iraqi people ("U.N. Oil-for-Food Program" or "OFF"). In an extensive scheme, the Iraqi government received illicit payments in the form of surcharges from oil purchasers and kickbacks, often termed "after sales service fees," from humanitarian goods suppliers.

According to the non-prosecution agreement, in January 2001 El Paso merged with The Coastal Corporation. Following this merger, El Paso purchased Iraqi oil from third-party intermediaries or allocation holders. Although El Paso took steps designed to prevent the purchase of Iraqi oil on which third parties had paid illegal surcharges, such procedures proved inadequate. Records maintained by the former Government of Iraq and its agents demonstrate that, from June 2001 until May 2002, El Paso purchased Iraqi oil for which third-party intermediaries or allocation holders paid approximately $5,480,000 in illegal surcharges to the former Government of Iraq. These surcharge payments were not deposited into the Oil-for-Food Program's escrow account, which was established to purchase humanitarian goods for the Iraqi people.
:
Wire Fraud
:
Cease and Desist, Injunction/Cease and desist, Non-prosecution Agreement
:
Forfeiture of $5,482,363, which the DOJ intended to transfer to the Development Fund of Iraq; injunction to maintain an internal compliance program to safeguard against violations of OFAC sanctions programs.
:
5,482,363
:
0
:
Issuer
:
U.S.
:
Contract Procurement/Retention
:
420,000,000
:
Wire/check
:
Sales Agent/Consultant
:
5,480,000
:
Jordan, Lebanon
:
No
:
No