Innospec Agent to Pay $250K, Serve 30 Months for FCPA Violation
The Justice Department has announced that Ousama Naaman, a former agent for U.S. company Innospec Inc., was sentenced on December 22, 2011 to 30 months in prison and ordered to pay a $250,000 fine for his participation in a conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe former Iraqi government officials, in violation of the Foreign Corrupt Practices Act (FCPA).
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Paid Iraqi Government to Get Contracts Under UN Oil for Food Program
Naaman and his companies were the Iraqi agents of Innospec Inc. In March 2010, Innospec pleaded guilty to wire fraud in connection with its payment of kickbacks to the Iraqi government under the OFFP, as well as FCPA violations in connection with bribe payments it made to officials in the Iraqi Ministry of Oil.
From 2001 to 2003, acting on behalf of Innospec, Naaman offered and paid 10 percent kickbacks to the then-Iraqi government in exchange for five contracts under the OFFP. Naaman negotiated the contracts, including a 10 percent increase in the price to cover the kickbacks, and routed the funds to Iraqi government accounts in the Middle East.
Also Paid Bribes to Secure Sales of Lead in Iraq
In addition, Naaman admitted to paying and promising to pay more than $6.8 million in bribes from 2004 to 2008, in the form of cash, travel and entertainment, to officials of the Iraqi Ministry of Oil and the Trade Bank of Iraq to secure sales of tetraethyl lead in Iraq, as well as to secure more favorable exchange rates on the contracts. Naaman provided Innospec with false invoices to support the payments, and those invoices were incorporated into the books and records of Innospec.
Earned $2.7M in Commissions from Contracts, Etc.
In addition to bribes actually offered and paid to Iraqi officials, Naaman convinced Innospec to pay him $750,000 for additional bribes that Naaman never paid, instead keeping the money for himself. Naaman earned $2.7 million in commissions on the contracts and would have earned an additional $5.3 million had the final contract not been halted as a result of the investigation.
Settled $438K Civil Penalty with SEC for Same Misconduct
Naaman separately settled civil charges in August 2010 with the U.S. Securities and Exchange Commission (SEC) for the same misconduct. Naaman disgorged $877,096 in profits and prejudgment interest in connection with the settlement. The SEC civil penalty of $438,038 will be satisfied in part by his criminal fine.
U.S. Immigrate and Customs Enforcement press release is available here.
Justice Department press release is available here.