Former Chief Executive Officer Of Oil Services Company Indicted In New Jersey On Foreign Bribery And Kickback Charges
NEWARK, N.J. – The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – was indicted today for his role in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA) and to defraud PetroTiger.
U.S. Attorney Paul J. Fishman of the District of New Jersey, Acting Principal Deputy Assistant Attorney General Marshall Miller of the Justice Department’s Criminal Division and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.
Joseph Sigelman, 43, of Miami and the Philippines, was indicted today by a federal grand jury in Camden, N.J., with conspiracy to violate the FCPA and to commit wire fraud, conspiracy to launder money, and substantive FCPA and money laundering violations. Gregory Weisman, 42, of Moorestown, N.J., the former general counsel of PetroTiger, pleaded guilty on Nov. 8, 2013, to conspiracy to violate the FCPA and to commit wire fraud. Sigelman’s co-CEO, Knut Hammarskjold, 42, of Greenville, S.C., pleaded guilty to the same charge on Feb. 18, 2014.
According to documents filed in this case and statements made in court:
Sigelman and others paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million. To conceal the bribes, they first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. Sigelman and Hammarskjold provided Weisman invoices, including her bank account information. The conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed. Sigelman and his conspirators took steps to conceal the bribe payments from PetroTiger’s board members.
In addition, Sigelman and others attempted to secure kickback payments while negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating more favorable terms for the owners of the target company, two of the owners agreed to kick back to the conspirators a portion of the increased purchase price. To conceal the kickback payments, Sigelman and others had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments and used the code name “Manila Split” to refer to the payments amongst themselves.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013, with conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money and substantive violations of the FCPA. Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on Jan. 3, 2014, in the Philippines. The charges against Sigelman, Hammarskjold and Weisman were unsealed on Jan. 6, 2014. Today’s indictment consolidates the complaint’s conspiracy to commit wire fraud and to violate the FCPA charges into a single count, and adds one count of transacting in criminal proceeds.
The conspiracy to commit wire fraud and violations of the FCPA count carries a maximum potential penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The three substantive FCPA counts each carry a maximum potential penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum potential penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The transacting in criminal proceeds charge carries a maximum potential penalty of 10 years in prison and $250,000 or twice the gain or loss from the offense.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which cooperated with the department’s investigation. The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter. The department also thanks the Republic of the Philippines, including the Bureau of Immigration, and the Republic of Panama for their assistance in this matter. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Assistant U.S. Attorney Zach Intrater of the District of New Jersey and Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Defense counsel: Andrew C. Lourie, Matthew I. Menschel, William A. Burck, Juan Pablo Morillo Esqs., Washington; Patrick J. Egan Esq., Philadelphia