Canadian/Lebanese dual national Ousama M. Naaman pleaded guilty today to participating in an eight-year conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe Iraqi government officials in connection with the sale of a chemical additive used in the refining of leaded fuel, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Naaman, 61, of Abu Dhabi, United Arab Emirates, was originally indicted on Aug. 7, 2008, in U.S. District Court for the District of Columbia. Naaman was arrested on July 30, 2009, in Frankfurt, Germany, and extradited to the United States. He pleaded guilty today to a two-count superseding information filed June 24, 2010, charging him with one count of conspiracy to commit wire fraud, violate the Foreign Corrupt Practices Act (FCPA), and falsify the books and records of a U.S. issuer; and one count of violating the FCPA.
Naaman and his companies were the Iraqi agents of Innospec Inc., a U.S. company. On March 18, 2010, Innospec pleaded guilty to a 12-count indictment charging wire fraud in connection with its payment of kickbacks to the Iraqi government under the OFFP, as well as violations of the FCPA 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 kickback, and routed the funds to Iraqi government accounts in the Middle East. Innospec inflated its prices in contracts approved by the OFFP to cover the cost of the kickbacks.
Naaman also admitted that from 2004 to 2008, he paid and promised to pay more than $3 million in bribes, in the form of cash, as well as travel, gifts 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.
Naaman faces a maximum prison sentence of 10 years. His sentencing has not yet been scheduled.
The case is being prosecuted by Trial Attorney Kathleen M. Hamann and Assistant Chief Nathaniel B. Edmonds of the Criminal Division’s Fraud Section. The case is being investigated by the FBI’s Washington Field Office’s dedicated FCPA squad and the U.S. Immigration and Customs Enforcement’s Counter Proliferation Investigations Unit. Significant assistance was provided by the Criminal Division’s Office of International Affairs and the U.S. Securities and Exchange Commission’s FCPA Unit.
The Innospec matter has been investigated in close cooperation with the Securities and Exchange Commission, the Department of the Treasury’s Office of Foreign Assets Control, and the United Kingdom’s Serious Fraud Office.