Oil Traders Plead Guilty In Multimillion Dollar Kickback Scheme
|Oct. 20, 2011|
HOUSTON – Oil traders Bernard Langley, 54, of the United Kingdom, and Clyde Meltzer, 65, of Houston and Livingston, N. J., have pleaded guilty to conspiring to engage in wire fraud in connection with a multimillion dollar kickback scheme, United States Attorney Kenneth Magidson announced today.
Langley and Meltzer entered the plea at a hearing this morning before United States District Judge Sim Lake. The conspiracy charge carries a punishment of up to 20 years in prison, a fine of up to $250,000 and restitution of up to $57 million. Langley and Meltzer also agreed to an order forfeiting numerous assets obtained with proceeds of the kickback scheme, including luxury and classic automobiles, jewelry, funds in Swiss and Monocan bank accounts, real estate in Texas and Florida as well as investments in a Houston sports bar. To date, assets valued at more than $20 million have been forfeited to the United States in this case which also has resulted in the guilty plea of former LyondellBassell employee Jonathan Barnes.
According to the plea agreements and other public documents in this case, Houston Refinery LP is a subsidiary of LyondellBassell Industries and operates a large refinery in Houston. Houston Refinery imports most of its crude oil from Venezuela and the shipping of that oil is a significant expense. In late 2006, Barnes became the marine chartering manger at Houston Refinery responsible for entering into agreements and prices with shipping companies. Langley and Meltzer were longtime associates from the international oil trading business who had a number of companies incorporated in the British Virgin Islands and elsewhere, including Fossil Energy. In exchange for Barnes agreeing to use their companies to transport the oil on tankers from Venezuela to Houston, Langley and Meltzer agreed to pay Barnes one-third of the profits they received. As a result, Barnes’ incentive was to authorize Lyondell, from which the conspirators concealed the kickback arrangement, to above market rates for the shipping. From 2007 through late 2009 when new management at Lyondell discovered the overcharges, Langley and Meltzer used Swiss bank accounts to pay Barnes more than $20 million in kickbacks.
Judge Lake scheduled the sentencing of Langley and Meltzer for Jan. 26, 2012. Both defendants have been in federal custody since Dec. 9, 2010, when they were arrested at the Galleria in Houston after a recorded meeting with co-defendant Barnes.
The case was investigated by the United States Postal Inspection Service with the assistance of LyondellBasell Industries. For their invaluable assistance during the course of the investigation, United States Attorney Magidson wishes to expressly thank and recognize the Department of Justice’s Office of International Affairs and the governments of France, Switzerland and the British Virgin Islands. The case is being prosecuted by Assistant United States Attorneys Gregg Costa and forfeiture matters are being handled by Assistant United States Attorney Kristine Rollinson.