Innospec’s former agent in Iraq is asking to be sentenced to time served for his role in an eight-year conspiracy to defraud the United Nations oil-for-food program and bribing Iraqi officials.
Under federal sentencing guidelines, Ousama Naaman, 61, a dual citizen of Canada and Lebanon, could face between 135 to 168 months in prison, according to the government’s non-public presentence report.
Naaman pleaded guilty last June to conspiracy and to violating the Foreign Corrupt Practices Act. He’s scheduled to be sentenced in Washington, D.C. by Judge Ellen S. Huvelleon on January 26.
In arguing for a time-served sentence, Naaman’s lawyers say he’s already spent “just shy of a year in prison [in Germany awaiting extradition], and another seven months under strict conditions of release” in the U.S.
In an argument similar to jury nullification, Naaman’s lawyers have also asked the judge to consider the FCPA’s extraordinarily long reach:
Here, the United States has stretched its jurisdiction as far as it can go — and farther than most people around the world would anticipate — in holding Mr. Naaman accountable for violating U.S. law for conduct that he engaged in while in Iraq on behalf of a European company that happened to have an American parent company. None of Mr. Naaman’s actions took place on American soil, yet the United States had him seized at an airport in Germany while he was in transit to France seeking medical care for his heart, had him jailed in Germany, extradited to the United States and place in one of the nastiest prisons in the United States. With respect to sending the right message, that already has occurred. What has happened to Mr. Naaman already shows the world that the United States takes violations of the FCPA very seriously.
Naaman shouldn’t receive a substantial sentence, his lawyers argue, because no one else has been charged with a crime in the case. A long sentence, they say, would send the message that a Middle Easterner is being punished for paying bribes while the Americans and Britons who hired him to do it haven’t been brought to justice.
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 in July 2009 in Frankfurt, Germany. The Justice Department extradited him to the United States. In a 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.
For about a decade he acted as an agent of U.S.-based Innospec. In March last 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.
A lengthy jail term, Naaman’s lawyers argue, won’t help the U.S. improve its image as “a beacon on a hill,” won’t help the U.S. pursue its goal of getting other nations to adopt their own anti-bribery laws like the FCPA, and probably will discourage other countries to continue helping the U.S. investigate potential FCPA offenses “if the perception of foreign governments and their people is that the United States will treat foreign citizens more harshly than the United States treats its own citizens.”
Download a copy of Ousama Naaman’s memorandum in aid of sentencing (92 pages) in U.S. v. Naaman here.