Enforcement Action

 

Docket or Case Number:    08-cr-597

Court:    S.D. Texas

Initiation Date:    09/03/2008  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • William J. Stuckwisch, Assistant Chief, Fraud Section, Criminal Division
  • Patrick F. Stokes, Senior Trial Attorney, Fraud Section, Criminal Division
  • Steven A. Tyrrell, Acting Chief, Fraud Section, Criminal Division

Assisting Agencies:    U.S. Securities and Exchange Commission , France's Law Enforcement Agency , Switzerland's Law Enforcement Agency , U.K. Law Enforcement Agency , Federal Bureau of Investigation , Internal Revenue Service , Department of Justice- Criminal Division’s Office of International Affairs , Italy's Law Enforcement Agency

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Albert Jackson Stanley was the former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR).

KBR was part of a four-company joint venture called TSKJ, which was comprised of Technip of France, Snamprogetti Netherlands B.V. of the Netherlands, Kellogg Brown & Root of the United States, and JGC Corporation of Japan. Between 1995 and 2004, members of the joint venture devised and implemented a scheme to bribe Nigerian government officials to obtain contracts worth over $6 billion to build liquefied natural gas (LNG) production facilities. on Bonny Island in Nigeria The joint venture partners formed a "cultural committee" comprised of senior sales executives at each company, to consider how to carry out the bribery scheme. To conceal the illicit payments, the joint venture entered into sham contracts with a shell company controlled by a U.K. solicitor (Jeffrey Tesler, who was given $132 million for the purpose of bribing high-level Nigerian officials) and a Japanese trading company (Marubeni Corporation, which was given $51 million for the purpose of bribing low-level Nigerian officials) as conduits for the bribes. Total payments to the two agents exceeded $180 million.

On September 3, 2008, Stanley pleaded guilty to a two-count criminal information in the Southern District of Texas, charging him with conspiracy to violate the FCPA, and to commit mail and wire fraud. He was sentenced to 30 months in prison, followed by three years of supervised probation, and ordered to pay $10.8 million in restitution. Stanley had originally faced an 84-month sentence, but was granted less because federal prosecutors deemed his cooperation to be substantial enough to recommend leniency.

Country(ies) involved:    Nigeria

Sanction to Bribe Ratio:    $10,800,200 / $182,000,000 = 5.93 %

Sanction to Revenue Ratio:    $10,800,200 / $6,000,000,000 = 0.18 %

Sanction to Profit Ratio:    N/A

Number of Related Enforcement Actions (Including This Enforcement Action):    11

Country(ies) involved:    Nigeria

Total $ Bribery Payments:    $183,000,000

Total $ Revenue Generated from Bribery:    $6,000,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    N/A

Total $ Monetary Sanctions:    $1,715,938,854

Sanction to Bribe Ratio:    $1,715,938,854 / $183,000,000 = (937.67 %)

Sanction to Revenue Ratio:    $1,715,938,854 / $6,000,000,000 = (28.60 %)

Sanction to Profit Ratio:    N/A

Name:    Albert Jackson Stanley

Employers & Positions:    Kellogg Brown and Root Inc. - Employee

Country:    United States

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371)

Related Claims:    Conspiracy to Commit Mail and Wire Fraud (18 U.S.C. § 371; 18 U.S.C. § 1341)

Statutory Basis for FCPA Jurisdiction:    Domestic Concern ; Domestic Concern (Officer) ; Domestic Concern (Employee) ; Domestic Concern (Agent) ; Conspirator

Period of Bribery:   1994 - 2004

Total Bribery Payments:    $182,000,000

Total Revenue Generated from Bribery:    $6,000,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Officials; Nigerian National Petroleum Corporation ("NNPC")
  • Name N/A, Officials; Nigeria LNG Limited ("NLNG")

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Marubeni Corporation , Agent/Consultant/Broker
  • Tri-Star Investments Ltd. , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments made by the Joint Venture to Tesler for engineering contracts in Nigeria

Period of Bribery:   1994 – 2004

Total Bribery Payments:    $132,000,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Nigerian National Petroleum Corporation ("NNPC");
  • Name N/A, Officials; Nigeria LNG Limited ("NLNG");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Tri-Star Investments Ltd. - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments made by the Joint Venture to Marubeni for engineering contracts in Nigeria

Period of Bribery:   1994 – 2004

Total Bribery Payments:    $50,000,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Nigerian National Petroleum Corporation ("NNPC");
  • Name N/A, Officials; Nigeria LNG Limited ("NLNG");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Marubeni Corporation - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes


Parent(s):   Halliburton

Subsidiary:  Kellogg Brown and Root LLC

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     Yes

Type of Transaction:    Acquisition


Successor(s):   Halliburton; Kellogg Brown and Root LLC; Kellogg Brown & Root LLC

Predecessor:  The M.W. Kellogg Company

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    No
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    Yes
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    Yes
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    No
  • Voluntary Disclosure by Successor in Connection with the Transaction:    No
  • DOJ Opinion Sought in Connection with Transaction:    No
  • Successor Liable for Predecessor Misconduct? :    No

  

Predecessor:  Kellogg Brown and Root Inc.

  • Nature of Misconduct    N/A
  • Quality of Due Diligence:    N/A
  • Voluntary Disclosure by Successor in Connection with the Transaction:    No
  • DOJ Opinion Sought in Connection with Transaction:    No
  • Successor Liable for Predecessor Misconduct? :    No

  

N/A

Mitigating Factors Referenced by the Government (Individual Defendants):

Defendant Cooperation
Albert Jackson Stanley

Aggravating Factors Referenced by the Government (Individual Defendants):

Defendant Insufficient Cooperation
Albert Jackson Stanley  

Total Monetary Sanctions for the Action:    $10,800,200

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    09/03/2008

Albert Jackson Stanley

—  Total Monetary Sanctions for Defendant:    $10,800,200

—  Imprisonment/Incarceration:    30 months

—  Probation/Supervised Release:    36 months

—  House Arrest:    None

—  Community Service:    None

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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