AUSTRALIAN MAN AND COMPANY INDICTED FOR ALLEGEDLY SELLING TECH ITEMS TO IRAN

The following excerpt is from the Department of Justice website:

Wednesday, February 29, 2012
WASHINGTON – An Australian man and his company have been indicted today by a federal grand jury in the District of Columbia for conspiring to export sensitive military and other technology from the United States to Iran, including components with applications in missiles, drones, torpedoes and helicopters.

The five-count indictment charges David Levick, 50, an Australian national, and his company, ICM Components Inc., located in Thorleigh, Australia, each with one count of conspiracy to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act; as well as four counts of illegally exporting goods to an embargoed nation in violation of IEEPA; and forfeiture of at least $199,227.41.

The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John J. McKenna, Special Agent in Charge of the Commerce Department’s Office of Export Enforcement Boston Field Office; James W. McJunkin, A ssistant Director in Charge of the FBI’s Washington Field Office; Kathryn Feeney, Resident Agent in Charge of the Defense Criminal Investigative Service (DCIS) Resident Agency in New Haven, Conn.; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston.        

Levick, who is the general manager of ICM Components, remains at large and is believed to be in Australia.   If convicted, Levick faces a potential maximum sentence of five years in prison for the conspiracy count and 20 years in prison for each count of violating IEEPA.

According to the indictment, beginning as early as March 2007 and continuing through around March 15, 2009, Levick and ICM solicited purchase orders from a representative of a trading company in Iran for U.S.-origin aircraft parts and other goods.   This person in Iran, referenced in the charges as “Iranian A,” also operated and controlled companies in Malaysia that acted as intermediaries for the Iranian trading company.
The indictment alleges that Levick and ICM then placed orders with U.S. companies on behalf of Iranian A for aircraft parts and other goods that Iranian A could not have directly purchased from the United States without U.S. government permission. Among the items the defendants allegedly sought to procure from the United States are the following:

VG-34 Series Miniature Vertical Gyroscopes.   These are aerospace products used to measure precisely and/or maintain control of pitch and roll in applications such as helicopter flight systems, target drones, missiles, torpedoes and remotely piloted vehicles.   They are classified as defense articles by the U.S. government and may not be exported from the United States without a license from the State Department or exported to Iran without a license from the Treasury Department.

K2000 Series Servo Actuators designed for use on aircraft.   The standard Servo Actuator is designed to be used for throttle, nose wheel steering and most flight control surfaces.   High-torque Servo Actuators are designed to be used for providing higher torque levels for applications such as flaps and landing gear retraction.   These items are classified as defense articles by the U.S. government and may not be exported from the United States without a license from the State Department or exported to Iran without a license from the Treasury Department.

Precision Pressure Transducers. These are sensor devices that have a wide variety of applications in the avionics industry, among others, and can be used for altitude measurements, laboratory testing, measuring instrumentations and recording barometric pressure.  These items may not be exported to Iran without a license from the Treasury Department.

Emergency Floatation System Kits.   These kits contained a landing gear, float bags, composite cylinder and a complete electrical installation kit.  Such float kits were designed for use on Bell 206 helicopters to assist the helicopter when landing in either water or soft desert terrain. These items may not be exported to Iran without a license from the Treasury Department.

Shock Mounted Light Assemblies.   These items are packages of lights and mounting equipment designed for high vibration use and which can be used on helicopters and other fixed wing aircraft.   These items may not be exported to Iran without a license from the Treasury Department.

According to the charges, Levick and ICM, when necessary, used a broker in Florida to place orders for these goods with U.S. firms to conceal that they were intended for transshipment to Iran. The defendants also concealed the final end-use and end-users of the goods from manufacturers, distributors, shippers and freight forwarders in the United States and elsewhere, as well as from U.S. Customs and Border Protection.   To further conceal their efforts, the defendants structured payments between each other for the goods to avoid restrictions on Iranian financial institutions by other countries.
         
The indictment further alleges that Levick and ICM wired money to companies located in the United States as payment for these restricted goods.   Levick, ICM and other members of the conspiracy never obtained the required licenses from the Treasury or State Department for the export of any of these goods to Iran, according to the charges.

In addition to the conspiracy allegations, the indictment charges the defendants with exporting or attempting to export four specific shipments of goods from the United States to Iran in violation of IEEPA.   These include a shipment of 10 shock mounted light assemblies on Jan. 27, 2007; a shipment of five precision pressure transducers on Dec. 20, 2007; a shipment of 10 shock mounted light assemblies on March 17, 2008; and a shipment of one emergency floatation system kit on June 24, 2008.

This investigation was jointly conducted by agents of the Department of Commerce Office of Export Enforcement, FBI, DCIS and ICE-HSI.  The prosecution is being handled by Assistant U.S. Attorneys John W. Borchert and Ann Petalas of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorney Jonathan C. Poling of the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that an indictment contains mere allegations.  Defendants are presumed innocent unless and until proven guilty in a court of law.”

QUEST COMMUNICATIONS CFO GETS JUDGED FOR LISTING ASSETS SALES AS PRODUCT SALES

The following excerpt is from the SEC website:

February 28, 2012
“COURT ENTERS FINAL JUDGMENT AGAINST FORMER CFO OF QWEST COMMUNICATIONS INT’L ROBERT S. WOODRUFF
The U.S. Securities and Exchange Commission announced today that the United States District Court for the District of Colorado entered a Final Judgment dated February 3, 2012, in a civil action against Robert S. Woodruff, the former chief financial officer of Qwest Communications International Inc., a Denver-based telecommunications company. Woodruff, without admitting or denying the Commission’s allegations, consented to the entry of a Final Judgment that enjoins him from violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; finds that he is liable for disgorgement of $1,731,048, plus prejudgment interest of $640,427, imposes a civil penalty of $300,000; and prohibits him from acting as an officer or director of a public company for a period of five years. It is anticipated that the Commission will ask the Court to add the disgorgement, interest and penalty to a Fair Fund which was established in SEC v. Qwest Communications, Inc., Civ No. 04-cv-1267 (D. Colorado). The Commission thus far has distributed approximately $275 million from the Fair Fund to harmed investors
According to the SEC’s complaint, from at least April 1, 1999 through March, 2001, Woodruff and others at Qwest engaged in a large-scale financial fraud that hid from the investing public the true source and nature of the company’s revenue and earnings growth. The complaint alleged that, although Qwest publicly touted its purported growth in services contracts which would provide a continuing revenue stream, in fact, the company fraudulently and repeatedly relied on revenue recognition from one-time sales of assets known as “IRUs” and certain equipment without making required disclosures. The complaint also alleged that Woodruff and others fraudulently and materially misrepresented Qwest’s performance and growth to the investing public. The complaint further alleged that Woodruff sold Qwest stock in violation of the insider trading prohibition of the securities laws."

JUDGEMENT ENTERED AGAINST DEFENDANT MAGNUM D'OR RESOURCES, INC.,

The following excerpt is from the SEC website:

February 24, 2012
COURT ENTERS JUDGMENTS AGAINST DEFENDANTS MAGNUM D’OR RESOURCES, INC., DAVID DELLA SCIUCCA, JR., AND DWIGHT FLATT
Securities and Exchange Commission v. Magnum d’Or Resources, Inc., et al., Civil Action No. 11-60920-CIV-JORDAN/BANDSTRA (S.D. Fla.)
The Securities and Exchange Commission announced that on February 13, 2012, the Court entered a final judgment of permanent injunction and other relief, by consent, against defendant Magnum d’Or Resources, Inc. The final judgment against Magnum enjoins the company from violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities and Exchange Act of 1934 and Exchange Act Rule 10b-5. In addition to injunctive relief, the Court orders Magnum to pay disgorgement in the amount of $7,728,824, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest in the amount of $233,543.01, and imposes a civil penalty in the amount of $725,000. Also, on December 8, 2011 and January 4, 2012 the United States District Court for the Southern District of Florida entered judgments of permanent injunction and other relief, by consent, against defendants David Della Sciucca, Jr. and Dwight Flatt, respectively. The judgments enjoin Sciucca and Flatt from violations of Sections 5(a) and 5(c) of the Securities Act. Sciucca and Flatt also are barred from participating in any penny stock offering and from owning, receiving or purchasing Form S-8 stock. The judgments against Sciucca and Flatt provide for disgorgement and the imposition of civil penalties in amounts to be determined by the Court upon motion of the Commission.

The Commission commenced this action by filing its Complaint on April 29, 2011, against Magnum, Sciucca, Flatt, and others. The Complaint alleges Magnum issued stock pursuant to false Form S-8 registration statements, and used bogus consultants to funnel more than $7 million in illicit stock proceeds back into the company. The Complaint also alleges that in facilitating this kickback scheme, Magnum garnered the assistance of Flatt, Sciucca, and others, who liquidated Magnum S-8 stock, kept a portion of the sales proceeds, and then returned the remaining sales proceeds to Magnum under the guise of loan agreements. The Complaint further alleges that Magnum made false and misleading statements in its Form S-8 registration statements and in various press releases during the relevant time period.”

OWNER OF FRAUDULENT MEDICAL EQUIPMENT COMPANIES GOES TO PRISON FOR FRAUD

Monday, February 27, 2012
“WASHINGTON – A former Los Angeles church pastor, who owned and operated several fraudulent durable medical equipment (DME) supply companies with her husband, was sentenced today to serve 36 months in prison for her role in a $14.2 million Medicare fraud scheme, the Department of Justice, FBI and Department of Health and Human Services (HHS) announced.

Connie Ikpoh, 49, also was sentenced today by U.S. District Judge Terry J. Hatter for the Central District of California to three years of supervised release and ordered to pay $6.7 million in restitution jointly and severally with her co-conspirators.

In August 2011, a jury found Ikpoh, a nurse who also worked at two Los Angeles-area hospitals, and her husband, Christopher Iruke, 61, and one of their employees, Aura Marroquin, guilty of conspiracy and health care fraud offenses following a two-week trial in Los Angeles.

According to evidence presented at trial, Ikpoh and Iruke were pastors at Arms of Grace Christian Center, a Los Angeles church where Ikpoh and Iruke also operated Pascon Medical Supply, a fraudulent DME supply company.   Ikpoh and Iruke hired several church members at Arms of Grace to assist them with running Pascon and three other fraudulent DME supply companies, Horizon Medical Equipment and Supply Inc., Contempo Medical Equipment Inc. and Ladera Medical Equipment Inc.   The trial evidence showed that Ikpoh owned and operated Horizon.   Ikpoh and Iruke used Iruke’s sister Jummal Joy Ibrahim as a straw owner of Contempo and Ladera.

According to the trial evidence, Ikpoh, Iruke, Marroquin and their co-conspirators used fraudulent prescriptions and documents that Ikpoh and Iruke purchased from a number of illicit sources to bill Medicare for expensive, high-end power wheelchairs and orthotics that were medically unnecessary or never provided.   Each power wheelchairs cost approximately $900 per wholesale, but were billed to Medicare at a rate of approximately $6,000 per wheelchair.  Witness testimony established that Ikpoh and Iruke hid the money they used to pay for these fraudulent prescriptions by writing checks to a company called “Direct Supply,” a fictitious company that Iruke created in the name of an Arms of Grace church member.   Iruke cashed the checks that he and Ikpoh wrote to Direct Supply and used the money to purchase the fraudulent prescriptions.

Witnesses who sold the fraudulent prescriptions and documents that Ikpoh, Iruke  and their co-conspirators used to defraud Medicare testified that they and others paid cash kickbacks to street-level marketers to offer Medicare beneficiaries free power wheelchairs and other DME in exchange for the beneficiaries’ Medicare card numbers and personal information.   These witnesses testified that they and their associates used this information to create fraudulent prescriptions and medical documents, which they sold to Iruke and the operators of other fraudulent DME supply companies for $1,100 to $1,500 per prescription.

After Iruke purchased the prescriptions, the trial evidence showed that Ikpoh used the prescriptions at Horizon to bill Medicare primarily for power wheelchairs.   In fact, the trial evidence showed that approximately 85 percent of Horizon’s business was power wheelchairs, and that Ikpoh submitted more than $3.2 million in claims to Medicare.   Medicare paid Ikpoh more than $1.6 million on these claims.   Witnesses who worked at Horizon testified that if Medicare refused to pay Horizon for a power wheelchair, Ikpoh required the witnesses to take back the power wheelchairs from the Medicare beneficiaries.

The trial evidence showed that Ikpoh was also involved with operating Contempo and Ladera.  Ikpoh represented herself to state inspectors as Contempo’s manager and appeared on Ladera’s corporate filings with the state.   Moreover, witness testimony established that Ikpoh ran the companies when Iruke visited Nigeria and that she and one of her co-defendants, Darawn Vasquez, who was also a church member at Arms of Grace, withdrew money from the Contempo bank account to pay for fraudulent prescriptions.

Witness testimony established that in August 2009, law enforcement agents visited Contempo and Ladera and questioned Marroquin and Vasquez about fraud occurring at the companies.  Within a few weeks of the agents’ visit, Iruke closed Contempo and Ladera, which prompted agents to serve Iruke and his and Ikpoh’s attorneys with subpoenas for the companies’ files.  Instead of producing the files, Iruke directed that the files be brought to an auditorium used by Arms of Grace, where Ikpoh, Iruke, Marroquin and others altered and destroyed documents within the files to remove evidence of the fraud scheme.   Law enforcement agents found Marroquin with these files when they arrested her.

Evidence introduced at trial showed that as a result of this fraud scheme, Ikpoh, Iruke, Marroquin and their co-conspirators submitted more than $14.2 million in fraudulent claims to Medicare and received approximately $6.7 million in reimbursement payments from Medicare.  The evidence showed that Ikpoh and Iruke diverted most of this money from the bank accounts of the supply companies to pay for the fraudulent prescriptions and documents, which Iruke purchased to further the scheme, and to cover the leases on their Mercedes vehicles, home remodeling expenses and other personal expenses.

Vasquez and Ibrahim pleaded guilty to conspiracy and false statement charges in February 2011 and March 2011, respectively, and are awaiting sentencing.   On Dec. 9, 2011, Judge Hatter sentenced Marroquin to time served and three years of supervised release.   On Jan. 9, 2012, Judge Hatter sentenced Iruke to serve 180 months in prison and three years of supervised release.

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region for the HHS Office of the Inspector General (HHS-OIG); and Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office.

The case was prosecuted by Trial Attorney Jonathan Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Kirman of the Central District of California. The case was investigated by the HHS-OIG with assistance from the California Department of Justice.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.”

CO-FOUNDERS OF CANOPY FINANCIAL, INC., GO TO PRISON FOR FRAUD

The following excerpt is from the Securities and Exchange Commission website:

February 27, 2012
“United States v. Jeremy Blackburn and Anthony Banas, Criminal Action No. 09 CR 976 (N.D. Ill. March 1, 2010)
The U.S. Securities and Exchange Commission (Commission) announced that on February 15, 2012, co-founders of the bankrupt Canopy Financial, Inc., a health care transaction-software company based in Chicago, were sentenced to 15 and 13 years in prison for defrauding investors and clients of more than $93 million. Anthony Banas, Canopy’s chief technology officer, was sentenced to 160 months in prison, while Jeremy Blackburn, Canopy’s former president and chief operating officer, was sentenced to 180 months in prison. Both men pleaded guilty in late 2010 to one count of wire fraud, admitting they engaged in a fraud scheme that cheated investors of approximately $75 million and also misappropriated more than $18 million from customer accounts intended for health care savings and expenses. In imposing sentence, United States District Judge Ruben Castillo of the Northern District of Illinois noted that this case was the most aggravated financial fraud he had seen in his 18 years on the federal bench. The judge ordered both men to pay mandatory restitution and forfeiture totaling $93,125,918.

According to their plea agreements, Blackburn and Banas used false information about Canopy’s financial condition, including a bogus auditor’s report and falsified bank statements, to fraudulently obtain approximately $75 million from several private equity investors in 2009. Approximately $39 million of that money was used to redeem shares of other Canopy investors, including approximately $1.6 million that went to Blackburn and $975,000 that went to Banas, while another $29 million obtained from investors was deposited into Canopy operating accounts.

Also according to their plea agreements, Blackburn and Banas misappropriated Canopy operating funds for their own benefit. Blackburn took approximately $6 million in unauthorized withdrawals and transfers from Canopy bank accounts during 2009. Blackburn typically directed a Canopy employee, or occasionally Banas, to transfer Canopy funds to his bank accounts or to pay for his personal expenses, including credit card balances, luxury car purchases, and travel on a private jet. Blackburn also paid for personal home renovations, bought sports tickets and purchased jewelry and watches using misappropriated Canopy funds. Banas used misappropriated Canopy money to invest $300,000 in a nightclub. Banas also spent $400,000 between 2007 and 2009 on other personal expenses.

Blackburn admitted that he created phony bank statements during 2009 to conceal the transfer of more than $18 million from special health care accounts in which Canopy held funds as custodian for the benefit of more than 1,600 clients and customers to make payments to medical providers. The funds were transferred to Canopy’s own operating accounts, as well as to benefit Blackburn and Banas personally.

The Commission’s cases against Blackburn (SEC v. Canopy Financial, Inc., et al., Case No. 09-CV-7429, USDC, N.D.IL (LR-21324) and Banas (SEC v. Anthony T. Banas, Case No. 10- CV 3877 USDC N.D. IL) (LR-21566) resulted in permanent injunctions against both individuals, by consent, for violating the antifraud provisions of the Securities Act of 1933 [Section 17(a)] and the Securities Exchange Act of 1934 [Section 10(b) and Rule 10b-5 thereunder], ordered disgorgement of $1,779,759.83 and prejudgment interest of $71,182.03 against Blackburn in April 2011 and disgorgement of $975,548.25 and prejudgment interest of $32,910.45 against Banas in June 2010.
The Commission acknowledges the assistance of the U.S. Attorney’s Office of the Northern District of Illinois and the Chicago Regional Office of the U.S. Department of Labor in this matter.”

DEPARTMENT OF JUSTICE WARNS CONSUMERS TO WATCH OUT FOR UNAUTHORIZED PHONE CHARGES

The following excerpt is from the Department of Justice website:

February 22nd, 2012 Posted by Tracy Russo
The following post appears courtesy of Richard Goldberg, Assistant Director of the Civil Division’s Consumer Protection Branch.

Did you know that your telephone bills may contain charges for products or services other than telephone service, much like charges on a credit card?  Those who carry out these types of fraud have found ways to insinuate themselves onto the telephone billing system, and arrange for false charges to appear on telephone bills.  As a result, you could be paying for goods or services you never ordered or received.

“Cramming” is the practice of placing unauthorized, misleading or deceptive charges on a telephone bill.  The perpetrators tend to keep crammed charges small, to increase the likelihood that you will pay your bill without noticing the false charges.  They do this on both consumer and business telephone bills, on landline and wireless bills.

The Consumer Protection Branch in the Justice Department’s Civil Division is working hard to prosecute these criminals.  But individuals are really the front line in the battle against cramming and in the best position to notice these false charges.  Crammed charges may appear on any page of a telephone bill, so you should carefully review your bill on a monthly basis.

 If you see unfamiliar or suspicious charges on your telephone bill, you should:
 Contact your local telephone company, tell the telephone company of the cramming, and instruct the company to remove the false charge and give a credit for false charges on any previous bills, and
Submit a complaint summarizing the false charges to the Federal Trade Commission.
Many telephone companies will, upon request, exclude third-party billing from a customer’s telephone bill.  Doing so may prevent crammed charges from appearing on telephone bills in the future. "

FORMER CEO KELLOGG, BROWN & ROOT SENTENCED TO 30 MONTHS IN PRISON FOR BRIBERY

The following excerpt is from the Department of Justice website:

“Thursday, February 23, 2012Former Chairman and CEO of Kellogg, Brown & Root Inc. Sentenced to 30 Months in Prison for Foreign Bribery and Kickback SchemesU.K. Solicitor and Former Salesman Also Sentenced for Participation in Scheme to Bribe Nigerian Government Officials

WASHINGTON – Albert “Jack” Stanley, a former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR), was sentenced today to 30 months in prison for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by participating in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts and for conspiring to commit mail and wire fraud as part of a separate kickback scheme, the Justice Department’s Criminal Division today announced.    

U.S. District Judge Keith P. Ellison for the Southern District of Texas also ordered Stanley to serve three years of supervised release following the prison term and to pay $10.8 million in restitution to KBR, the victim of the separate kickback scheme.   Stanley, 69, pleaded guilty on Sept. 3, 2008, to a two-count criminal information charging him with one count of conspiracy to violate the FCPA and one count of conspiracy to commit mail and wire fraud.

Two of Stanley’s co-conspirators also were sentenced by Judge Ellison.   Today, Jeffrey Tesler, 63, a United Kingdom citizen and licensed solicitor, was sentenced to 21 months in prison, followed by two years of supervised release.   Tesler also was ordered to pay a $25,000 fine and previously was ordered to forfeit $148,964,568.   Yesterday, Wojciech J. Chodan, 74, a United Kingdom citizen and former salesman at KBR’s U.K. subsidiary, was sentenced to one year of probation and ordered to pay a $20,000 fine.   Chodan previously was ordered to forfeit $726,885.

Tesler and Chodan were indicted on Feb. 17, 2009, and subsequently extradited to the United States from the United Kingdom.   On Dec. 6, 2011, Chodan pleaded guilty to count one of the indictment charging him with conspiring to violate the FCPA.   On March 11, 2011, Tesler pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA.
         
All three defendants fully cooperated with the department’s investigation, which resulted in more than $1.7 billion in penalties, disgorgement and forfeitures.   The defendants’ substantial assistance in the investigation and prosecution of other defendants was reflected in the sentences the court imposed.

“Today’s prison sentences for Mr. Stanley and Mr. Tesler mark another important step in our prosecution of those responsible for a massive bribery scheme involving engineering, procurement and construction contracts in Nigeria,” said Mythili Raman, Principal Deputy Assistant Attorney General for the Criminal Division.  “These sentences reflect not only the defendants’ illegal acts, but also their substantial cooperation with the government.  As a result of this investigation, three individuals have been convicted of FCPA-related crimes, and five companies in four countries have paid substantial penalties and undertaken significant efforts to enhance their compliance programs.  This case shows the importance the department places on putting an end to foreign bribery.”

According to court documents, KBR was a member of the TSKJ joint venture (named for the first letters of the names of the companies involved), along with Technip S.A., Snamprogetti Netherlands B.V., and JGC Corporation.  Between 1995 and 2004, TSKJ was awarded four EPC contracts, valued at more than $6 billion, by Nigeria Liquefied Natural Gas (LNG) Ltd. to build the LNG facilities on Bonny Island.  The government-owned Nigerian National Petroleum Corporation was the largest shareholder of NLNG, owning 49 percent of the company.

From approximately 1994 through June 2004, the joint venture companies, Stanley, Tesler, Chodan and others agreed to pay bribes to a wide range of Nigerian government officials in order to obtain and retain the EPC contracts.   To pay the bribes, the joint venture hired two agents – Tesler and Marubeni Corporation, a Japanese trading company headquartered in Tokyo.   The joint venture hired Tesler as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, and hired Marubeni to pay bribes to lower-level Nigerian government officials.  At crucial junctures preceding the award of the EPC contracts, Stanley and other co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom TSKJ should negotiate bribes to Nigerian government officials.  TSKJ paid approximately $132 million to a Gibraltar corporation controlled by Tesler and $51 million to Marubeni during the course of the bribery scheme for use, in part, to pay bribes to Nigerian government officials.

In a related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials.  Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program.

In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip in June 2010.  According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years.   In July 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti, which also agreed to pay a $240 million criminal penalty.  In April 2011, the department filed a deferred prosecution agreement and criminal information against JGC, in which JGC agreed to pay a $218.8 million criminal penalty and to retain an independent compliance consultant for two years.   In January 2012, the department filed a deferred prosecution agreement and criminal information against Marubeni, in which Marubeni agreed to pay a $54.6 million criminal penalty and to retain a corporate compliance consultant for two years
         
The criminal cases were prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division.  The Criminal Division’s Office of International Affairs and the SEC’s Division of Enforcement provided substantial assistance.  Significant assistance was provided by authorities in France, Italy, Switzerland and the United Kingdom.   Investigative assistance with the prosecution of Stanley was also provided by the Internal Revenue Service’s Criminal Investigations Division in Houston.”

TRIBUNE CO. EMPLOYEES GET BACK $32 MILLION FOR STOCK OWNERSHIP PLAN AND EXPENCES

The following excerpt is from the Department of Labor website:

“WASHINGTON — The U.S. Department of Labor's Employee Benefits Security Administration has announced that the Tribune Co., GreatBanc Trust Co. and various insurance carriers have completed funding of a global settlement in the amount of $32 million to be allocated among the Tribune Employee Stock Ownership Plan's participants, and to pay for legal and administrative expenses. The settlement is with, among others, the department and the plaintiffs in a private class action lawsuit, and resolves the department's claims of violations of the Employee Retirement Income Security Act.

"This settlement ensures that the Tribune Employee Stock Ownership Plan's participants and beneficiaries will be able to receive the benefits that are rightfully theirs," said Secretary of Labor Hilda L. Solis. "I am pleased that participants' hard earned retirement savings have been returned."

"The fulfillment of this settlement is good news for participants in the Tribune Employee Stock Ownership Plan," said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. "It is the culmination of my agency's commitment and extreme hard work in this case to ensure that the employees' contributions to the plan are handled with the utmost of care according to the law and according to what is right."

On Jan. 30, 2012, the U.S. District Court for the Northern District of Illinois approved the global settlement agreement, which had received prior approval in October 2011 by the U.S. Bankruptcy Court for the District of Delaware. In accordance with the global settlement agreement, the department has concluded its investigation of the plan.

EBSA initiated an investigation of the plan to review its 2007 purchase of Tribune Co. stock for $250 million and the roles played by the plan's fiduciaries, the company and the plan's trustee, GreatBanc Trust Co. The department claimed that the company failed to act prudently and in participants' best interests when it engaged in the ESOP transaction. Additionally, the department claimed that the ESOP transaction was prohibited, a claim consistent with the findings of the district court in the private plaintiffs' action.
As part of its 2007 corporate re-structuring, the Tribune Co. became a privately-held entity owned by the plan. In September 2008, a class action lawsuit was filed on behalf of the plan's participants. While initially filed in California, the case was moved to the Northern District of Illinois in November 2008. In December 2008, the Tribune Co. and some of its subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The department filed claims in the company's bankruptcy proceedings and objected to confirmation of plans to reorganize it. These matters were resolved as part of the global settlement agreement. As of Dec. 31, 2010, the Tribune ESOP had 13,020 participants. The settlement amount has been deposited into an independently managed settlement account.”