Innospec’s former agent who pleaded guilty last year to bribing Iraqi officials and violating the U.N.’s oil for food program was sentenced today to thirty months in federal prison and fined $250,000.
Ousama Naaman, 62, a Canadian citizen, is the only individual prosecuted so far in the United States for Innospec’s bribery.
The judge didn’t say when he has to surrender and start serviing his prison sentence. He’s now free on personal recognizance bond.
Innospec, a Delaware-based specialty-chemical maker, reached a $40 million global settlement last year of more than a dozen criminal charges in the U.S. and U.K.
The DOJ had asked that Naaman be jailed for seven and a half years. Based on his guilty plea, he could have been jailed for more than ten years. His lawyers had argued for time served based on his custody after arrest and later under home detention.
Three former Innospec executives — Dennis Kerrison, Paul Jennings, and David Turner — have been charged by the U.K. Serious Fraud Office with overseas bribery. Their next hearing in London is set for January 6, 2012.
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.
In his guilty 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.
In August last year, Naaman and David Turner, one of the London defendants, settled civil FCPA charges with the SEC.
Turner agreed to disgorge $40,000 to the SEC. He wasn’t required to pay any civil penalty. The SEC said he provided “extensive and ongoing cooperation in the investigation.” Naaman agreed to disgorge $810,076 plus prejudgment interest of $67,030, and pay a civil penalty of $438,038. The civil penalty will be reduced by $250,000 — the amount of his criminal fine.