Enforcement Action

 

Docket or Case Number:    98-cr-10266

Court:    D. Massachusetts

Initiation Date:    01/30/1998  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Joshua S. Levy, Special Assistant U.S. Attorney
  • Paul G. Levenson, Special Assistant U.S. Attorney
  • Joshua R. Hochberg, Chief, Fraud Section, Criminal Division
  • Peter B. Clark, Deputy Chief, Fraud Section, Criminal Division
  • Philip Urofsky, Trial Attorney, Fraud Section, Criminal Division
  • Donald K. Stern, United States Attorney

Assisting Agencies:    Environmental Protection Agency

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    EPA investigation

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Saybolt North America Inc. was a business incorporated under the laws of the State of Delaware, and having its principal place of business in Parsippany, New Jersey. Saybolt North America's primary business was conducting quantitative and qualitative testing of bulk commodities, such as oil, gasoline, and other petrochemicals, as well as grains, vegetable oils and other commodities. Saybolt North America along with its subsidiary Sabolt Inc. are wholly owned by a holding company incorporated in the Netherlands, Saybolt International B.V. ("Saybolt International"). In 1997 Core Laboratories N.V. acquired Saybolt International B.V. for $67 million in cash and the assumption of $5 million in debt.

From 1994 to 1995, Saybolt North America Inc., Saybolt Inc., Saybolt International, B.V., and Saybolt Western Hemisphere conspired to make illegal payments to officials of the government of the Republic of Panama. $50,000 in illegal payments were made to: obtain contracts; to receive a substantial reduction in Saybolt Panama's tax payments to the government of Panama; and to and secure a more permanent facility for Saybolt Panama's operations on highly coveted land near the Panama Canal.

The bribery payments were discovered during an investigation by the Environmental Protection Agency's criminal division over allegations of data falsification.

On August 18, 1998, the DOJ brought criminal proceedings against both Saybolt North America and Saybolt, Inc. The first set of charges, brought only against Saybolt, Inc., consisted of conspiracy to data falsification and wire fraud. The second set of charges, brought against both Saybolt, Inc. and Saybolt N.A., consisted of conspiracy to violate the FCPA and violation of the FCPA's anti-bribery provisions. Saybolt, Inc. and Saybolt N.A. both pled guilty, and Saybolt, Inc. agreed to pay a fine of $3,400,000 for its data falsification violations. Saybolt, Inc. and Saybolt N.A. were joint and severally liable for a $1,500,000 fine for the bribery violations.

In a related case, David H. Mead (President and CEO of Saybolt Inc.) was convicted on all counts, and was required to pay a $20,000 fine. David H. Mead was sentenced to 4 months in prision, 4 months home detension, and three years of supervised probation.

Country(ies) involved:    Panama

Sanction to Bribe Ratio:    $4,902,400 / $50,000 = 9804.80 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    N/A

Number of Related Enforcement Actions (Including This Enforcement Action):    2

Country(ies) involved:    Panama

Total $ Bribery Payments:    $50,000

Total $ Revenue Generated from Bribery:    N/A

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

Total $ Monetary Sanctions:    $4,922,400

Sanction to Bribe Ratio:    $4,922,400 / $50,000 = (9844.80 %)

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    N/A

Name:    Saybolt North America

Place of Incorporation:    United States

HQ Country(ies):    United States

Entity Type:    Subsidiary

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Primary, Domestic Concern (15 U.S.C. § 78dd-2) ; 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:    Domestic Concern ; Conspirator ; Aider & Abettor/Cause/Control Person


Name:    Saybolt Inc.

Place of Incorporation:    United States

HQ Country(ies):    United States

Entity Type:    Subsidiary

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371) ; Anti-Bribery, Primary, Domestic Concern (15 U.S.C. § 78dd-2) ; 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:    Conspiracy to Destroy, Falsify, or Alter Records (18 U.S.C. § 371; 18 U.S.C. § 1519) ; Wire Fraud (18 U.S.C. § 1343)

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

Period of Bribery:   1994 - 1995

Total Bribery Payments:    $50,000

Total Revenue Generated from Bribery:    N/A

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

Country(ies) involved:    Panama

Officials Potentially Influenced (Name; Title; Organization): 

  • Audo Escudero; Sub-Director; Hydrocarbon Directorate
  • Hugo Tovar; General Director; Hydrocarbon Directorate

Defendant-Related Entities Involved in the Misconduct:    Saybolt de Panama - Subsidiary

Third-Party Intermediary:   

  • Agent of Saybolt de Panama , Agent/Consultant/Broker
  • Panama local construction company , Shell Company

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Evade/reduce taxes or penalties, Obtain/retain business, Prevent/reduce competition

TRANSACTION OVERVIEW
Bribes paid to Panamanian officials

Period of Bribery:   1994 – 1995

Total Bribery Payments:    $50,000

Total Revenue Generated from Bribery:    N/A

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

Country(ies) involved:    Panama

Officials Potentially Influenced (Name; Title; Organization):  

  • Hugo Tovar; General Director; Hydrocarbon Directorate;
  • Audo Escudero; Sub-Director; Hydrocarbon Directorate;

Defendant-Related Entities Involved in the Misconduct:    Saybolt de Panama - Subsidiary

Third Party Intermediary:    Agent of Saybolt de Panama - Agent/Consultant/Broker
Panama local construction company - Shell Company

Type of Bribe:   Money

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Evade/reduce taxes or penalties, Obtain/retain business, Prevent/reduce competition

Misconduct by Subsidiary?  Yes


Parent(s):   Saybolt International, B.V.; Saybolt North America

Subsidiary:  Saybolt North America

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

Subsidiary:  Saybolt de Panama

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

Subsidiary:  Saybolt Western Hemisphere

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

Subsidiary:  Saybolt Inc.

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    Yes
  • 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?     Yes

Type of Transaction:    Acquisition


Successor(s):   Core Laboratories, N.V.

Predecessor:  Saybolt International, B.V.

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    No
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    Yes
  • 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:  Saybolt North America

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    No
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    Yes
  • 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:  Saybolt Inc.

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    No
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    Yes
  • 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:  Saybolt Western Hemisphere

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    No
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    Yes
  • 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:  Saybolt de Panama

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    No
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    Yes
  • 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 (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Saybolt Inc.          
Saybolt North America          

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Saybolt Inc.    
Saybolt North America    

Total Monetary Sanctions for the Action:    $4,902,400

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    08/18/1998

Saybolt North America

—  Total Monetary Sanctions for Defendant:    $1,500,800

—  Organizational Probation:    60 months

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Hybrid

—  Admission of Guilt/Acceptance of Responsibility:    Yes


Saybolt Inc.

—  Total Monetary Sanctions for Defendant:    $4,901,600

—  Organizational Probation:    60 months

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Hybrid

—  Admission of Guilt/Acceptance of Responsibility:    Yes

    Note: This sanction may have been imposed jointly and severally on multiple defendants, or it may resolve claims against more than one defendant in this proceeding or related proceedings. You should review the case summaries and resolution documents for all related cases to better understand how sanctions were levied against the defendants.

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