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United States v. Chevron Corp.

 
:
Chevron Corp. - Chevron Corp.
:
DOJ Criminal
:
November 8, 2007
:
United States v. Chevron Corp.
:
This is an "oil side" Oil-for-Food case, and was brought by the U.S. Attorney's Office for the Southern District of New York, rather than the Fraud Section of the Department of Justice that normally prosecutes FCPA cases.

The non-prosecution agreement covers the Office of Foreign Asset Controls of the U.S. Treasury and the District Attorney's Office of New York County.

The DOJ stated in the non-prosecution agreement that it will seek to transfer the forfeiture of $20,000,000 to the Development Fund of Iraq.
:
Energy (Non-Utility)-Oil & Gas-Other/Multi
:
Iraq
:
2000; 2001; 2002; 2003
:
Various officials in the former Iraqi government.
:
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 non-prosecution agreement, from April 2001 through May 2002, Chevron purchased Iraqi oil from third-party intermediaries and/or allocation holders. Although Chevron took certain steps designed to prevent the purchase from third parties of Iraqi oil on which illegal surcharges had been paid, such procedures proved inadequate. Moreover, the United States Government has represented that evidence at trial would prove that, on at least one occasion, a Chevron employee asked a seller of Iraqi oil if the seller could negotiate a lower surcharge payment to the former Government of Iraq in order to reduce Chevron's costs in a particular deal. The United States Government further represented that records maintained by the former Government of Iraq and its agents demonstrate that, from April 17, 2001 until May 2002, Chevron purchased Iraqi oil for which third-party intermediairies and/or allocation holders paid approximately $20,000,000 in illegal surcharges to the former Government of Iraq.

Under the non-prosecution agreement, in addition to forfeiture, Chevron agreed to pay $2,000,000 to the Office of Foreign Asset Control in settlement of any civil penalties for violations of the Iraqi Sanctions Regulations (31 C.F.R. part 575) that might be applicable.
:
Wire Fraud
:
Cease and Desist, Civil Settlement, Non-prosecution Agreement
:
Forfeiture of $25,000,000; $2,000,000 to the Treasury's Office of Foreign Asset Control in settlement of civil penalties
:
27,000,000
:
0
:
Domestic Concern, Issuer
:
U.S.
:
Contract Procurement/Retention
:
Not stated.
:
Wire/check
:
Sales Agent/Consultant
:
20,000,000
:
Iraq
:
Jordan, Lebanon
:
No
:
No