Enforcement Action

 

Docket or Case Number:    4:10-cr-00766

Court:    S.D. Texas

Initiation Date:    11/04/2010  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

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

Assisting Agencies:    US Securities and Exchange Commission , Federal Bureau of Investigation

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Defendant Pride International Inc. was a Houston-based corporation which owned and operated numerous oil and gas drilling rigs throughout the world. Pride Forasol S.A.S. was a wholly owned French subsidiary of Pride International.

From January 2003 through December 2004, certain Pride International subsidiaries and their branches paid a total of approximately $800,000 in bribes directly and indirectly to government officials in Venezuela, India and Mexico. The bribes were paid to extend drilling contracts for three rigs operating offshore in Venezuela; to secure a favorable administrative judicial decision relating to a customs dispute for a rig imported into India; and to avoid the payment of customs duties and penalties relating to a rig and equipment operating in Mexico. The benefit that Pride International received as a result of these payments was at least $13 million.

On August 4, 2010, the DOJ filed a criminal information charging Pride International with conspiracy to violate the anti-bribery provisions of the FCPA, violating the anti-bribery provisions of the FCPA, and violating the books and records provisions of the FCPA. At the same time the DOJ entered into a three year deferred prosecution agreement with Pride International. Pride International agreed to pay a fine of $32,625,000, but 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 International in a merger and assumed the obligations of Pride International under the DPA. Since the merger, the business operations of both Pride International 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 International, 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.

In a related action, without admitting or denying the SEC's allegations, the VP of Pride International, Bobby Benton consented to the entry of the Final Judgment permanently enjoining him from future violations of the FCPA. Bobby Benton was ordered to pay a $40,000 civil penalty.

Country(ies) involved:    India, Mexico, Venezuela

Sanction to Bribe Ratio:    $32,625,000 / $804,000 = 4057.84 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $32,625,000 / $13,000,000 = 250.96 %

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 International, Inc.

Place of Incorporation:    United States

HQ Country(ies):    United States

Entity Type:    Public Company

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Primary, Issuer (15 U.S.C. § 78dd-1) ; Books & Records, Primary, Knowing Violation (15 U.S.C. § 78m (b)(5)) ; Books & Records, Primary, Issuer (15 U.S.C. § 78m (b)(2)(A)) ; Books & Records, Conspiracy (18 U.S.C. 371)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Issuer ; Conspirator ; Person (Books & Records, Internal Controls)

Period of Bribery:   2003 - 2004

Total Bribery Payments:    $804,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $13,000,000

Country(ies) involved:    India, Mexico, Venezuela

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Director; Petrolos de Venezuela S.A. ("PDVSA")
  • Name N/A, Director; Petrolos de Venezuela S.A. ("PDVSA")
  • Name N/A, Administrative Judge; Customs, Excise, and Gold Appellate Tribunal ("CEGAT")
  • Name N/A, Official; Mexican customs

Defendant-Related Entities Involved in the Misconduct:    Forinter Limited - Subsidiary ; Interdrill Ltd. - Subsidiary ; Internationale de Travaux et de Material S.A.S. - Subsidiary ; Mexico Drilling Limited LLC, Pride Central America LLC, and Pride Drilling LLC - Subsidiary ; Pride Foramer de Venezuela S.A. - Subsidiary ; Pride Foramer India - Subsidiary ; Pride Forasol S.A.S. - Subsidiary

Third-Party Intermediary:   

  • India Customs Consultant , Agent/Consultant/Broker
  • Mexico Marketing Agent , Agent/Consultant/Broker
  • Representative of Petroleos de Venezuela S.A. official , Agent/Consultant/Broker
  • Third party companies , Shell Company
  • Vendor A , Agent/Consultant/Broker
  • Vendor B , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Evade/reduce taxes or penalties, Facilitate import/export/delivery of products, Influence the adjudication of disputes, lawsuits, or enforcement actions, Obtain/retain business

TRANSACTION OVERVIEW
Pride International and its subsidiary Pride Forasol S.A.S., payments to government officials in Venezuela, India and Mexico.

Period of Bribery:   2003 – 2004

Total Bribery Payments:    $804,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $13,000,000

Country(ies) involved:    Venezuela, India, Mexico

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Director; Petrolos de Venezuela S.A. ("PDVSA");
  • Name N/A, Director; Petrolos de Venezuela S.A. ("PDVSA");
  • Name N/A, Administrative Judge; Customs, Excise, and Gold Appellate Tribunal ("CEGAT");
  • Name N/A, Official; Mexican customs;

Defendant-Related Entities Involved in the Misconduct:    Forinter Limited - Subsidiary ; Interdrill Ltd. - Subsidiary ; Internationale de Travaux et de Material S.A.S. - Subsidiary ; Mexico Drilling Limited LLC, Pride Central America LLC, and Pride Drilling LLC - Subsidiary ; Pride Foramer de Venezuela S.A. - Subsidiary ; Pride Foramer India - Subsidiary ; Pride Forasol S.A.S. - Subsidiary

Third Party Intermediary:    India Customs Consultant - Agent/Consultant/Broker
Mexico Marketing Agent - Agent/Consultant/Broker
Representative of Petroleos de Venezuela S.A. official - Agent/Consultant/Broker
Third party companies - Shell Company
Vendor A - Agent/Consultant/Broker
Vendor B - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Evade/reduce taxes or penalties, Facilitate import/export/delivery of products, Influence the adjudication of disputes, lawsuits, or enforcement actions, Obtain/retain business

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?:    Yes

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?:    Yes

Subsidiary:  Mexico Drilling Limited LLC, Pride Central America LLC, and Pride Drilling 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?:    Yes

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?:    Yes

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?:    Yes

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?:    Yes

Subsidiary:  Pride Foramer de Venezuela S.A

  • 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?:    Yes

Subsidiary:  Pride Central America 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?:    Yes

Subsidiary:  Pride Drilling 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?:    Yes

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 International, Inc.    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Pride International, Inc.    

Total Monetary Sanctions for the Action:    $32,625,000

Case Status:    Resolved


Disposition:    Deferred Prosecution Agreement

Date of Disposition:    11/04/2010

Pride International, Inc.

—  Total Monetary Sanctions for Defendant:    $32,625,000

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Self-reporting

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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