Enforcement Action

 

Docket or Case Number:    10-cr-00771

Court:    S.D. Texas

Initiation Date:    11/04/2010  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Denis J. McInerney, Chief, Fraud Section, Criminal Division
  • Stacey K. Luck, Trial Attorney, Fraud Section, Criminal Division
  • Adam G. Safwat, Assistant Chief, Fraud Section, Criminal Division
  • Jose Angel Moreno, United States Attorney

Assisting Agencies:    N/A

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Defendant Pride Forasol S.A.S. was a wholly-owned subsidiary of Pride International. Pride International ("Pride"), was a Houston-based corporation, which owned and operated numerous oil and gas drilling rigs throughout the world. Pride Foramer India ("Pride India") was a branch of Pride Forasol's wholly-owned subsidiary, Pride Foramer, operating in India.

From January 2003 to July 2003, the Director of Legal Affairs for Pride Forasol, the Base Manager for Pride India, the Area Manager for the Asia Pacific region (which included Pride India), an Indian customs consultant, and others agreed to pay $500,000 to a judge with India's Customs, Excise, and Gold Appellate Tribunal ("CEGAT") to secure a favorable judicial decision for Pride India relating to a litigation matter pending before the official involving the payment of customs duties and penalties assessed for a rig.

On November 4, 2010, the DOJ filed a criminal information against Pride Forasol in the Southern District of Texas, charging Pride Forasol with conspiracy to violate the anti-bribery provisions of the FCPA, violating the anti-bribery provisions of the FCPA, and aiding and abetting the violation of the books and records provisions of the FCPA. At the same time Pride Forasol entered into a plea agreement with the DOJ and agreed to pay a penalty of $32,625,000. The $32,625,000 fine is approximately 55% below the bottom of the applicable Sentencing Guidelines fine range of $72,500,000. The Department and Pride Forasol agreed that such a reduction was appropriate based on the company's voluntary disclosure of the improper conduct, cooperation in the investigation, and expansive remedial measures.

In a related action, the DOJ entered into a three year deferred prosecution agreement with Pride International. Pride International agreed to pay a fine of $32,625,000. Under the terms of the DPA, any criminal penalty that is imposed by the Court and paid by Pride Forasol in connection with its guilty plea and plea agreement will be deducted from the $32,625,000 fine imposed on Pride International.

On May 31, 2011, Ensco plc (“Ensco”) acquired Pride in a merger and assumed the obligations of Pride under the DPA. Since the merger, the business operations of both Pride and Pride Forasol, were integrated into those of Ensco. On November 2, 2012, the DOJ filed a motion to dismiss to DPA that had been filed against Pride, and a motion to terminate the probation of Pride Forasol. The government determined that the continuation of the DPA and the term of probation would serve no further purpose in light of Ensco's implementation and oversight of compliance with policies, procedures and internal controls regarding the FCPA and other applicable anti-corruption laws across the entire Ensco organization.

Country(ies) involved:    India

Sanction to Bribe Ratio:    $32,626,200 / $500,000 = 6525.24 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $32,626,200 / $10,000,000 = 326.26 %

Number of Related Enforcement Actions (Including This Enforcement Action):    5

Country(ies) involved:    India, Kazakhstan, Libya, Mexico, Nigeria, Republic of the Congo, Saudi Arabia, Venezuela

Total $ Bribery Payments:    $2,000,000

Total $ Revenue Generated from Bribery:    N/A

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

Total $ Monetary Sanctions:    $88,805,918

Sanction to Bribe Ratio:    $88,805,918 / $2,000,000 = (4440.30 %)

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    N/A

Name:    Pride Forasol S.A.S.

Place of Incorporation:    United States

HQ Country(ies):    France

Entity Type:    Subsidiary

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Books & Records, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Primary, Other (15 U.S.C. § 78dd-3) ; Anti-Bribery, Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. §§ 78dd-1, 78dd-2, and/or 78dd-3) ; Books & Records , Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. § 78m (b)(2)(A), and/or 15 U.S.C. § 78m(b)(5)) ; Books & Records, Primary, Issuer [Willful] (15 U.S.C. § 78m (b)(2)(A); 15 U.S.C. § 78ff(a))

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Foreign Nationals and Entities (Employee) ; Conspirator ; Aider & Abettor/Cause/Control Person

Period of Bribery:   2003 - 2003

Total Bribery Payments:    $500,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $10,000,000

Country(ies) involved:    India

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Administrative Judge; Customs, Excise, and Gold Appellate Tribunal ("CEGAT")

Defendant-Related Entities Involved in the Misconduct:    Forinter Limited - Subsidiary ; Interdrill Ltd. - Subsidiary ; Internationale de Travaux et de Material S.A.S. - Subsidiary ; Pride Foramer India - Subsidiary

Third-Party Intermediary:   

  • India Customs Consultant , Agent/Consultant/Broker
  • Third party companies , Shell Company

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Influence the adjudication of disputes, lawsuits, or enforcement actions

TRANSACTION OVERVIEW
Pride Forasol manager's authorized payments to an administrative CEGAT judge

Period of Bribery:   2003 – 2003

Total Bribery Payments:    $500,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $10,000,000

Country(ies) involved:    India

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Administrative Judge; Customs, Excise, and Gold Appellate Tribunal ("CEGAT");

Defendant-Related Entities Involved in the Misconduct:    Forinter Limited - Subsidiary ; Interdrill Ltd. - Subsidiary ; Internationale de Travaux et de Material S.A.S. - Subsidiary ; Pride Foramer India - Subsidiary

Third Party Intermediary:    India Customs Consultant - Agent/Consultant/Broker
Third party companies - Shell Company

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Influence the adjudication of disputes, lawsuits, or enforcement actions

Misconduct by Subsidiary?  Yes


Parent(s):   Pride International, Inc.

Subsidiary:  Pride Forasol S.A.S.

  • 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

Subsidiary:  Pride Foramer India

  • 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

Subsidiary:  Interdrill Ltd.

  • 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

Subsidiary:  Internationale de Travaux et de Material S.A.S.

  • 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

Subsidiary:  Forinter Limited

  • 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?     No

N/A

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Pride Forasol S.A.S.    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Pride Forasol S.A.S.    

Total Monetary Sanctions for the Action:    $32,626,200

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    11/04/2010

Pride Forasol S.A.S.

—  Total Monetary Sanctions for Defendant:    $32,626,200

—  Organizational Probation:    36 months

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Self-reporting

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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