Enforcement Action

 

Docket or Case Number:    13-cr-00176

Court:    E.D. Virginia

Initiation Date:    04/16/2013  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Neil H. MacBride, United States Attorney
  • Jasmine Hyejung Yoon, Assistant United States Attorney
  • Jeffrey H. Knox, Chief, Fraud Section, Criminal Division
  • Stephen J. Spiegelhalter, Trial Attorney, Fraud Section, Criminal Division
  • Charles F. Connolly, Assistant United States Attorney

Assisting Agencies:    U.S. Securities and Exchange Commission , Federal Bureau of Investigation , Department of Justice- Criminal Division’s Office of International Affairs , U.K. Crown Prosecution Service , London Metropolitan Police

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Parker Drilling Company provides worldwide drilling services, rental tools, and project management. Their shares trade on the NYSE under the ticker symbol PKD.

In late 2001, Parker Drilling retained Panalpina to obtain new temporary import permits (TIPs) for its Nigerian rigs. Between late 2001 and April 2002, in an effort to secure new TIPs for Parker Drilling's rigs, Panalpina submitted false paperwork to the Nigerian Customs Service, stating that the rigs had left Nigeria. The false paperwork allowed Parker Drilling to eliminate the costs associated with exporting and importing its rigs. Panalpina employees bribed Nigerian Customs Service officials to insure the success of the false paperwork.

The Panel of Inquiry (the "TI Panel") was a board empanelled for the purpose of examining certain duties and tariffs that the Nigerian Customs Service collected or failed to collect between 1984 and 2000. On or about May 12, 2004, the TI Panel assessed a fine of $3.8 million against Parker Drilling relating to gaps in its TIPs.

Parker Drilling sought to reduce this fine and retained a Law Firm, Outside Counsel, and hired a Nigerian agent. Parker Drilling paid a total of $1,250,000 to the Law Firm, Outside Counsel, and Nigerian agent, who used a portion of the money on various things including entertaining the Nigerian government officials. On May 26, 2004, the TI Panel reduced the fine to $750,000 without a factual basis for doing so.

On April 16, 2013, the DOJ filed a criminal information against Parker Drilling Company, charging the company with violating the anti-bribery provisions of the FCPA. At the same time the DOJ entered into a deferred prosecution agreement with Parker Drilling. Under the DPA, Parker Drilling agreed to pay a $11,760,000 penalty and to submit periodic reports to the DOJ on the status of the company's anti-corruption compliance policies and procedures.

In a related action, Parker Drilling entered a settlement with the SEC, agreeing to pay $3,050,000 in disgorgement and $1,040,000 in pre-judgment interest.

Country(ies) involved:    Nigeria

Sanction to Bribe Ratio:    $11,760,000 / $1,250,000 = 940.80 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $11,760,000 / $3,050,000 = 385.57 %

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

Country(ies) involved:    Nigeria

Total $ Bribery Payments:    $1,250,000

Total $ Revenue Generated from Bribery:    N/A

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

Total $ Monetary Sanctions:    $15,850,818

Sanction to Bribe Ratio:    $15,850,818 / $1,250,000 = (1268.07 %)

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    N/A

Name:    Parker Drilling Company

Place of Incorporation:    United States

HQ Country(ies):    United States

Entity Type:    Public Company

FCPA Claims:    Anti-Bribery, Primary, Issuer (15 U.S.C. § 78dd-1)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Issuer

Period of Bribery:   2004 - 2004

Total Bribery Payments:    $1,250,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $3,050,000

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Officials; Nigeria's State Security Service ("SSS")
  • Name N/A, Officials; Nigeria Customs Service ("NCS")
  • Name N/A, Officials; Panel of Inquiry for the Investigation of all cases of temporary import permits issued between 1984 to year 2000 (TI Panel)

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Law Firm (U.S. limited liability partnership) , Lawyer
  • Nigeria Outside Counsel , Lawyer
  • Nigerian Agent , 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

TRANSACTION OVERVIEW
Bribes to Nigerian government officials

Period of Bribery:   2004 – 2004

Total Bribery Payments:    $1,250,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $3,050,000

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Nigeria's State Security Service ("SSS");
  • Name N/A, Officials; Nigeria Customs Service ("NCS");
  • Name N/A, Officials; Panel of Inquiry for the Investigation of all cases of temporary import permits issued between 1984 to year 2000 (TI Panel);

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Law Firm (U.S. limited liability partnership) - Lawyer
Nigeria Outside Counsel - Lawyer
Nigerian Agent - 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

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
Parker Drilling Company      

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Parker Drilling Company    

Total Monetary Sanctions for the Action:    $11,760,000

Case Status:    Resolved


Disposition:    Deferred Prosecution Agreement

Date of Disposition:    04/16/2013

Parker Drilling Company

—  Total Monetary Sanctions for Defendant:    $11,760,000

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Self-reporting

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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