The former CEO of PetroTiger Ltd. — a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey — was indicted Friday for bribing an official at Ecopetrol SA, Colombia’s state-controlled oil company, and defrauding PetroTiger by taking kickbacks.
Joseph Sigelman, 43, of Miami and the Philippines, was charged by a federal grand jury in the District of New Jersey with conspiracy to violate the FCPA and to commit wire fraud, conspiracy to launder money, and substantive FCPA and money laundering violations.
Last November, Gregory Weisman, 42, of Moorestown, New Jersey, the former general counsel of PetroTiger, pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud.
Sigelman’s co-CEO, Knut Hammarskjold, 42, of Greenville, South Carolina, pleaded guilty to the same charge in February this year.
“Sigelman and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million,” the DOJ said.
“To conceal the bribes, they first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. The conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.”
Sigelman and others also took steps to conceal the bribe payments from PetroTiger’s board members.
The defendants allegedly made at least four payments in 2010 from PetroTiger’s bank account in the United States to the Ecopetrol official’s bank account in Colombia worth a total of about $333,500.
Sigelman was also charged with taking kickbacks for an acquisition of another company on behalf of PetroTiger. In exchange for a higher purchase price, two of the owners of the target company agreed to pay Sigelman and other defendants a portion of the increased purchase price, the DOJ said.
The payments went to Sigelman’s bank account in the Philippines under a phony “side letter” for services, according to the DOJ.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey in November 2013. Hammarskjold was arrested that month at Newark Liberty International Airport. Sigelman was arrested in January this year in the Philippines.
The case started with a voluntary disclosure by PetroTiger to the DOJ.
Prosecutors said they received “significant assistance” from law enforcement agencies in Colombia and the Philippines.
The DOJ’s May 9, 2014 release is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.