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‘Classified’ Evidence Puts Naaman Sentencing On Hold

Innospec’s former agent who pleaded guilty last year to an FCPA conspiracy won’t be sentenced until September and maybe a lot later.

According to a recent court filing, Ousama Naaman has raised new evidence that may be classified, and there are new questions about how he spent some of the bribe money. A motion seeking the sentencing delay was signed jointly by Naaman’s lawyers and prosecutors.

It’s not clear if Naaman’s new evidence means the DOJ might prosecute other individuals in connection with the case.

In January, Naaman, 62, argued for a jail term of time-served. He said he’d 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.

Prosecutors had asked for a jail sentence of seven and a half years, saying the federal sentencing guidelines called for up to ten years in jail.

But prosecutors agreed this month to delay Naaman’s sentencing indefinitely. The joint court filing said he “raised issues that the Government has reason to believe makes it necessary to proceed under the Classified Information Procedures Act.”

Sentencing had been set for August 4. Prosecutors and Naaman’s lawyers asked for a delay of at least thirty days and warned that more delays might follow.

The “parties are working to resolve potential factual discrepancies regarding Mr. Naaman’s claimed expenses,” the court filing said, “which could impact the Government’s recommended fine and other sentencing issues.”

In January, Naaman admitted that as Innospec’s agent he paid $4 million in kickbacks to the Iraqi government and more than $3.5 million in bribes to senior Iraqi government officials. Innospec earned more than $50 million selling a gasoline additive to the Iraqi Ministry of Oil.

Naaman deserved a long jail sentence, the DOJ said earlier this year, because he pocketed $8.8 million from his criminal conspiracy.

In March last year, Innospec reached a $40 million global settlement of more than a dozen criminal charges in the U.S. and U.K.

In late January this year, Innospec’s former CFO and CEO settled civil FCPA charges with the SEC by paying about $229,000 in disgorgement and penalties. The SEC charged Paul W. Jennings with falsely certifying to auditors that he’d complied with Innospec’s FCPA compliance policy despite knowing about bribery in Iraq and Indonesia and personally approving some of the payments.

Naaman is free on personal recognizance pending his sentencing. He’s a citizen of Lebanon and Canada.

He was arrested in 2009 in Frankfurt, Germany and extradited to the U.S. Before pleading guilty to conspiracy, he faced multiple FCPA-related charges, including aiding and abetting.

Download the July 14, 2011 Joint Motion for Continuance of Sentencing Hearing in U.S. v. Ousama M. Naaman here.

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