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U.S. v. Ousama M. Naaman

 
:
Innospec - Naaman, Ousama M.
:
DOJ Criminal
:
August 7, 2008
:
U.S. v. Ousama M. Naaman
:
U.S. v. Ousama M. Naaman, No. 1:08-cr-00246 (D.D.C. 2008)
:
An agent was indicted alone, although the company he reportedly represented in Iraq is still under DOJ and SEC investigation.
:
Energy (Non-Utility)-Oil & Gas-Refinery
:
2001; 2002; 2003; 2004; 2005; 2006; 2007; 2008
:
Iraqi Ministry of Oil
:
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. The kickback payments were masked by inflating the contract price, usually by 10% of the contract value.

According to the indictment, from approximately March 2001 though 2003, Naaman, a Lebanese/Canadian dual national, allegedly conspired to cause FCPA violations and caused kickback payments to be made to Iraqi government officials totaling over $2 million in exchange for contracts with the Ministry of Oil to purchase additives from a U.S. company, understood, based on Innospec company statements, to be Innospec. These payments resulted in Innospec profits of over $40 million. Naaman allegedly received agent's fees (2% commission) plus an additional 2% commission on contract prices for delivering the kickbacks. Naaman allegedly created false invoices for reimbursement of the kickbacks, causing Innospec to conceal the payments and falsify its consolidated books and records. In 2006 and 2007, Naaman also allegedly paid $150,000 in bribes to Ministry of Oil officials to ensure Innospec's competitors' product would fail field trial tests. From 2005 to 2007, Naaman also arranged for travel including pocket money given as cash for Iraqi officials and their families.

On August 7, 2008, a grand jury indicted Naaman on one count of conspiracy to commit wire fraud and to violate the anti-bribery provisions of the FCPA and two counts of substantive violations of the antibribery provisions of the FCPA. The indictment remained under seal until July 30, 2009 when Naaman was arrested in Frankfurt, Germany. The Department of Justice extradited Naaman from Germany to the United States.

In a superseding information filed on June 24, 2010, Naaman was charged with conspiracy to defraud the U.N. OFF program and to violate the antibribery and books and records provisions of the FCPA, violating the antibribery provisions of the FCPA, and aiding and abetting.

On June 25, 2010, Naaman pleaded guilty to the charges in the superseding indictment. He was sentenced on December 22, 2011.
:
Aiding and abetting anti-bribery, Anti-bribery (Other Persons), Conspiracy - Anti-Bribery, Conspiracy - Books & Records
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Imprisonment, Plea
:
30 months in prison, $250,000 fine.
:
250,000
:
30
:
Agent of Issuer
:
Foreign
:
Canada
:
Contract Procurement/Retention
:
40,000,000
:
Cash, Travel, Wire/check
:
Sales Agent/Consultant
:
2,000,000
:
Switzerland
:
No
:
No
:
United Kingdom