Ousama M. Naaman, a dual citizen of Canada and Lebanon, pleaded pleaded guilty Friday in Washington, D.C. to conspiracy and to violating the Foreign Corrupt Practices Act. He was charged in a June 24, 2010 superseding information with engaging in an eight-year conspiracy to defraud the United Nations oil-for-food program and bribing Iraqi officials.
Naaman, 61, of Abu Dhabi, United Arab Emirates, was indicted in August 2008. He was originally charged with one count of conspiracy to commit wire fraud and to violate the Foreign Corrupt Practices Act and two counts of violating the FCPA. The superseding two-count information dropped the wire fraud conspiracy charge.
He now faces up to ten years in prison. No date has been set for sentencing.
For about a decade he acted as an agent of U.S.-based Innospec Inc. In March this year, the specialty chemical-maker reached a $40 million global settlement of more than a dozen criminal charges in the U.S. and U.K., including FCPA and U.N. oil for food program offenses, and violations of the U.S. embargo against Cuba.
The SEC’s complaint against Innospec referred to an email apparently from Naaman to the company’s management in October 2005. It said Iraqi officials were demanding a 2% kickback on sales. The e-mail stated: “We are sharing most of our profits with Iraqi officials. Otherwise, our business will stop and we will lose the market. We have to change our strategy and do more compensation to get the rewards.” Innospec’s Business Director authorized over $195,000 in bribes, and in another e-mail discussing the wording of the invoice, said: “The fewer words the better!”
With his plea, Naaman admitted paying or promising to pay more than $3 million to officials at Iraq’s Ministry of Oil and the Trade Bank of Iraq to win business for Innospec. The company makes and markets the anti-knock compound tetraethyl lead (TEL) used in leaded gasoline. Demand for TEL dropped in most Western countries after enactment of the U.S. Clean Air Act. But Innospec’s management encouraged bribery to boost sales in other markets, mainly in developing countries.
Naaman was arrested on July 30, 2009 in Frankfurt, Germany. The Justice Department extradited him to the United States. In the superseding information, he was charged in Count One under 18 U.S.C. §371 with conspiracy to defraud the U.N. oil-for-food program and to violate both the antibribery and books and records provisions of the FCPA. In Count Two, he was charged under 15 U.S.C. §78dd-l with violating the FCPA and under 18 U.S.C. §2 as an aider and abettor.
A copy of the June 24, 2010 superseding information in U.S. v. Ousama M. Naaman can be downloaded here.