Two former CEOs and the top lawyer of PetroTiger Ltd., a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey, were charged with bribery, fraud and money laundering, the U.S. Department of Justice said Monday.
Ex-CEOs Joseph Sigelman, who lived in Miami and the Philippines, and Knut Hammarskjold of Greenville, S.C., as well as former general counsel Gregory Weisman of Moorestown, N.J., allegedly bribed an official at Ecopetrol SA, Colombia’s state-controlled oil company, to win a services contract worth $39 million.
Hammarskjold was arrested November 20 at Newark Liberty International Airport, the DOJ said. Court records indicate he was released on $700,000 bail on December 4.
Sigelman was arrested Saturday in the Philippines and appeared Monday in Guam before a U.S. Magistrate there.
They were charged by sealed six-count complaints filed in the District of New Jersey on November 8 with conspiracy to commit wire fraud, conspiracy to violate the Foreign Corrupt Practices Act, conspiracy to launder money, and substantive violations of the FCPA.
Weisman, the general counsel, pleaded guilty November 8 to a criminal information charging him with one count of conspiracy to violate the FCPA (the U.S. antibribery law) and to commit wire fraud. His charges and guilty plea were unsealed Monday.
The defendants allegedly made at least four payments in 2010 from PetroTiger’s bank account in the United States to the official’s bank account in Colombia worth a total of about $333,500.
They tried 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,” the DOJ said. When those transfers didn’t go through, they made payments directly to the Ecopetrol official’s bank account, according to the charges.
The defendants were also charged with trying to secure kickbacks for an acquisition of another company on behalf of PetroTiger. In exchange for a higher purchase price, two of the owners of the target company agreed to kick back to the defendants a portion of the increased purchase price, the DOJ said. The defendants 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 among themselves, according to the DOJ.
All three defendants are 42 years old.
Conspiracy to commit wire fraud is punishable by up to 20 years in prison. FCPA conspiracy and substantive counts carry prison sentences of up to five years. Conspiracy to commit money laundering carries a maximum penalty of 20 years in prison.
PetroTiger provides production testing services to oil and gas companies. It has 1,000 professionals and engineers, according to its website. The company wasn’t charged Monday.
“The FBI is committed to pursuing those who disrupt the level playing field to which companies in the U.S. and around the world are entitled,” according to FBI Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division.
The DOJ said it had help from its law enforcement counterparts in Colombia and the Philippines. It said the investigation is being handled by the FBI’s Newark Division.
Source: The FCPA Blog