Enforcement Action

 

Docket or Case Number:    11-cr-00260

Court:    S.D. Texas

Initiation Date:    04/06/2011  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Denis J. McInerney, Chief, Fraud Section, Criminal Division
  • William J. Stuckwisch, Assistant Chief, Fraud Section, Criminal Division
  • Patrick F. Stokes, Senior Trial Attorney, Fraud Section, Criminal Division

Assisting Agencies:    France's Government Agency , Switzerland's Government Agency , United Kingdom's Government Agency , Italy's Government Agency

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    Foreign investigation

Whistleblower:    Unknown

Case Status:    Resolved


Summary

JGC Corporation, formerly Japan Gasoline Co., was a global engineering company headquartered in Yokohama, Japan.

JGC 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, 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 April 6, 2011, the DOJ filed a criminal information against JGC Corporation in the Southern District of Texas, charging JGC with one count of conspiracy to violate the FCPA and one count of aiding and abetting violations of the FCPA. At the same time, the DOJ entered into a deferred prosecution agreement with JGC. Under the terms of the DPA, JGC agreed to pay a monetary penalty of $218.8 million, and to retain an independent compliance consultant for a period of two years.

On April 26, 2013, JGC met its obligations under the DPA, and the department dismissed with prejudice the criminal information.

On March 21, 2014 the African Development Bank levied a $5.2 million fine against JGC. The African Development Bank also levied a $5.3 million penalty against Technip, and a $6.5 million penalty against Kellogg Brown & Root LLC.

Country(ies) involved:    Nigeria

Sanction to Bribe Ratio:    $218,800,000 / $182,000,000 = 120.22 %

Sanction to Revenue Ratio:    $218,800,000 / $6,000,000,000 = 3.65 %

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:    JGC Corporation

Place of Incorporation:    Japan

HQ Country(ies):    Japan

Entity Type:    Public Company

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)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Conspirator ; 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 (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
JGC Corporation    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
JGC Corporation  

Total Monetary Sanctions for the Action:    $218,800,000

Case Status:    Resolved


Disposition:    Deferred Prosecution Agreement

Date of Disposition:    04/06/2011

JGC Corporation

—  Total Monetary Sanctions for Defendant:    $218,800,000

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Independent monitor

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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