Enforcement Action

 

Docket or Case Number:    09-cr-00098

Court:    S.D. Texas

Initiation Date:    02/17/2009  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

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

Assisting Agencies:    U.S. Securities and Exchange Commission , France's Law Enforcement Agency , Switzerland's Law Enforcement Agency , Federal Bureau of Investigation , U.K. Serious Fraud Office , Department of Justice- Criminal Division’s Office of International Affairs , Italy's Law Enforcement Agency , U.K. Crown Prosecution Service , London Metropolitan Police , City of London Police

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Defendant Jeffrey Tesler was a london lawyer who had dual citizenship in Britain and Israel. Defendant Wojciech Chodan was a sales vice president employed by M.W. Kellogg Ltd. ("MWKL") from in or about 1988 until December 1998, after which he was a consultant to MWKL until June 16, 2004, when his consulting agreement was terminated.

In 1991, a joint venture was formed for the purpose of bidding on and, if successful, designing and building a liquefied natural gas plant and several expansions on Bonny Island, Nigeria (the "Bonny Island Project"). The joint venture was comprised of four companies - 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 related to the Bonny Island Project. 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.

According to the indictment, Chodan and his co-conspirators caused the wire transfers to be sent to the two agents.

Jeffrey Tesler and Wojciech J. Chodan were extradited to Texas after losing legal battles in the UK. On February 17, 2009, Tesler and Chodan were indicted on one count of conspiracy violate the FCPA, and ten counts of violating the anti-bribery provisions of the FCPA.

On March 11, 2011, Tesler plead guilty to one count of conspiracy to violate the FCPA and one count of violating the anti-bribery provisions of the FCPA. As part of the plea agreement, Tesler agreed to forfeit $148,964,569, and pay a $25,000 fine. Tesler was sentenced to 21 months in prison, followed by two years of supervised release. Prosecutors had sought a 78-month sentence for Tesler, but he received credit for his cooperation with the government.

On December 6, 2010, Wojciech Chodan pleaded guilty to one count of conspiracy to violate the FCPA, and agreed to forfeit $726,885, and pay a $20,000 fine. Chodan also was sentenced to one year of unsupervised probation.

Country(ies) involved:    Nigeria

Sanction to Bribe Ratio:    $149,736,654 / $182,000,000 = 82.27 %

Sanction to Revenue Ratio:    $149,736,654 / $6,000,000,000 = 2.50 %

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:    Jefferey Tesler

Employers & Positions:    Tri-Star Investments Ltd. - Solicitor

Country:    United Kingdom

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. §§ 78dd-1, 78dd-2, and/or 78dd-3) ; Anti-Bribery, Primary, Domestic Concern (15 U.S.C. § 78dd-2)

Related Claims:    Criminal Forfeiture (28 U.S.C. § 2461; 18 U.S.C. § 981) ; Criminal Forfeiture (21 U.S.C. § 853)

Statutory Basis for FCPA Jurisdiction:    Issuer (Agent) ; Domestic Concern (Agent) ; Person (Agent) ; Aider & Abettor/Cause/Control Person


Name:    Wojciech J. Chodan

Employers & Positions:    M.W. Kellogg Ltd. - Vice-President

Country:    United Kingdom

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. §§ 78dd-1, 78dd-2, and/or 78dd-3) ; Anti-Bribery, Primary, Domestic Concern (15 U.S.C. § 78dd-2)

Related Claims:    Criminal Forfeiture (28 U.S.C. § 2461; 18 U.S.C. § 981) ; Criminal Forfeiture (21 U.S.C. § 853)

Statutory Basis for FCPA Jurisdiction:    Domestic Concern (Agent) ; Aider & Abettor/Cause/Control Person

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?  No


M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

N/A

Mitigating Factors Referenced by the Government (Individual Defendants):

Defendant Cooperation
Jefferey Tesler
Wojciech J. Chodan

Aggravating Factors Referenced by the Government (Individual Defendants):

Defendant Insufficient Cooperation
Jefferey Tesler  
Wojciech J. Chodan  

Total Monetary Sanctions for the Action:    $149,736,654

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    03/11/2011

Jefferey Tesler

—  Total Monetary Sanctions for Defendant:    $148,989,769

—  Imprisonment/Incarceration:    21 months

—  Probation/Supervised Release:    24 months

—  House Arrest:    None

—  Community Service:    None

—  Admission of Guilt/Acceptance of Responsibility:    Yes


Disposition:    Plea Agreement

Date of Disposition:    12/06/2010

Wojciech J. Chodan

—  Total Monetary Sanctions for Defendant:    $746,885

—  Imprisonment/Incarceration:    None

—  Probation/Supervised Release:    12 months

—  House Arrest:    None

—  Community Service:    None

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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