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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
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Eric Carlson
Contributing Editor

Hey, Tesler Belongs In Top Ten

We love the mailbag. Yesterday a reader said: “While the Tesler plea is a $149 million forfeiture, it seems to me that it should make your Top 10.”

Jeffrey Tesler, 61, former middleman to KBR and its TSKJ partners Snamprogetti, Technip, and JGC, pleaded guilty in federal court in Houston in March to conspiracy and violating the FCPA. He still faces final sentencing but has already agreed to forfeit $149 million to the U.S. government, the biggest individual FCPA forfeiture in history.

On the current top-ten list of FCPA cases, Tesler would rank eighth. And he’d become the first individual to ever appear on the list with the corporate offenders.

Here’s it is with Tesler included:

1. Siemens (Germany): $800 million in 2008.

2. KBR / Halliburton (USA): $579 million in 2009.

3. BAE (UK): $400 million in 2010.

4. Snamprogetti Netherlands B.V. / ENI S.p.A (Holland/Italy): $365 million in 2010.

5. Technip S.A. (France): $338 million in 2010.

6. JGC Corporation (Japan) $218.8 million in 2011.

7. Daimler AG (Germany): $185 million in 2010.

8. Jeffrey Tesler (U.K. citizen): $149 million in 2011.

9. Alcatel-Lucent (France): $137 million in 2010.

10. Panalpina (Switzerland): $81.8 million in 2010.

Does adding Tesler make sense?

Forfeiture isn’t a criminal or civil penalty. But it does resemble disgorgement — a favorite equitable remedy of the SEC in FCPA civil cases that’s intended to deprive corporate wrongdoers of ill-gotten gains.

In our computations for the top ten list, disgorgement is always included. (We also keep a separate list of the ten biggest disgorgements in FCPA cases. Siemens is on top with $350 million, KBR with $177 million, Snamprogetti with $125 million, and so on.)

Disgorgement, the way the SEC uses it in FCPA cases, is a fixed amount the defendant agrees to pay to settle its civil case. Forfeiture, on the other hand, is an order by the court against an individual defendant that can be a fixed amount, as in Tesler’s case, or can be based partly on the unknown value of property interests, as with the Greens’ pension funds.

Tesler’s plea agreement lists bank accounts he controlled that apparently held exactly $148,964,568.67. That amount, the plea agreement said, “represents proceeds traceable” to Tesler’s violations under the conspiracy and FCPA statutes. There’s nothing indefinite about it. And presumably with Tesler’s help, the DOJ will recover all of it.

So Tesler needs to appear on the top ten list, at least with an asterisk.

That’s why we love the mailbag.

Download the March 11, 2011 plea agreement in U.S. v. Tesler here.

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