Victim Company to Receive More than $23 Million in Forfeited Assets
|Oct. 11, 2012|
HOUSTON – More than $23.7 million in forfeited assets will be returned to LyondellBasell Industries’ subsidiary, Houston Refining LP, which was the victim of a multimillion dollar fraud and kickback scheme, United States Attorney Kenneth Magidson announced today.
Former LyondellBasell Industries employee Jonathan Barnes and oil traders Bernard Langley and Clyde Meltzer previously pleaded guilty to their roles in the scheme and were subsequently sentenced to 84, 48 and 60 months in prison. Barnes was ordered to pay restitution of $82,107,774 to the fraud victim, and Langley and Meltzer are liable to pay $57.3 million of that restitution amount. In their plea agreements, the three defendants agreed to orders forfeiting to the United States numerous assets they obtained with proceeds of the kickback scheme, including luxury and classic automobiles, expensive jewelry, funds in foreign bank accounts and real estate in Texas, New York and Florida.
Victims of financial crime should receive restitution for their losses to the fullest extent possible. It is a priority of the Asset Forfeiture Program of the U.S. Department of Justice (DOJ) to return forfeited assets to such victims. In this case, DOJ has liquidated many of the forfeited assets and continues to pursue additional assets. As part of the restoration process, the Asset Forfeiture and Money Laundering Section (AFMLS) of the DOJ authorized the transfer of forfeited funds into the registry of the district court system for distribution to the fraud victim in accordance with the district court’s orders of restitution. The monies have been deposited into the court’s registry, and $23,735,991.41 is expected to be promptly distributed to Houston Refining LP. A supplemental restoration amount of more than $5 million is expected to be made within the next six months.
According to the plea agreements and other public documents in this case, Houston Refining LP is a subsidiary of LyondellBasell Industries and operates a large refinery in Houston. Houston Refining imported most of its crude oil from Venezuela, the shipping of which was a significant expense. In late 2006, Barnes became the Marine Chartering Manger at Houston Refining 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. 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 pay 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.
The case was investigated by the United States Postal Inspection Service with the assistance of LyondellBasell Industries. The case is being prosecuted by Assistant United States Attorney Jason Varnado. Forfeiture matters are being handled by Assistant United States Attorney Kristine Rollinson.