Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
On September 10, Gregory Weisman, former general counsel of oil and gas services company PetroTiger, and Knut Hammarskjold, PetroTiger's co-founder, were each sentenced to two years probation stemming from their prior guilty pleas to conspiring to violate the FCPA and commit wire fraud in connection with a bribe paid to an employee of Colombia's state-run oil company in order to win a $45 million oil-services contract. Both Mr. Weisman and Hammarskjold were ordered to pay restitution as well as fines of $30,000 and $15,000, respectively. Mr. Weisman's and Mr. Hammarskjold's sentencing occurred almost three months after the third PetroTiger co-conspirator, former CEO Joseph Sigelman, received a three-year probation sentence in connection with the same bribes. Mr. Weisman had been the key witness against Mr. Sigelman at Mr. Sigelman's June 2015 trial, but the trial abruptly ended after Mr. Sigelman entered a plea deal.
The DOJ announced the plea after Mr. Weisman informed the court that he gave false testimony regarding the terms of his cooperation agreement. At Mr. Weisman's sentencing, the District Judge referred to the abrupt turn of events at Mr. Sigelman's trial as "the elephant in the room" but noted that misstatements by Mr. Weisman were "peripheral" to the charged offenses.
On June 15, Joseph Sigelman, former CEO of oil and gas services company PetroTiger, pleaded guilty to one count of conspiracy to violate the FCPA in connection with a bribe paid to an employee of Colombia's state-run oil company in order to win a $45 million oil-services contract. The DOJ dismissed the remaining five charges originally brought against him. Mr. Sigelman's plea abruptly ended his trial, which was entering its third week in front of a jury in the U.S. District Court for the District of New Jersey. The DOJ announced the plea after the its key witness, PetroTiger's former general counsel Gregory Weisman, informed the court that he gave false testimony regarding the terms of his cooperation agreement. On Tuesday, June 16, Mr. Sigelman was sentenced to probation and ordered to pay $239,000 restitution and a $100,000 fine. The DOJ had requested a sentence of one year in prison under the plea agreement. Mr. Sigelman is the third PetroTiger official to plead guilty in connection with the matter. The government alleged that Mr. Sigelman, Mr. Weisman, and a third co-conspirator, PetroTiger's former co-CEO Knut Hammarskjold, made at least four payments totaling $333,500 to the Colombian official. The DOJ's press release on Mr. Sigelman's plea agreement noted the cooperation of PetroTiger and self-disclosure of the bribes, stating that "[b]ased on PetroTigers voluntary disclosure, cooperation, and remediation, among other factors, [DOJ] declined to prosecute PetroTiger." This is one of the only times the DOJ has publicly commented on a specific declination given to a company.
The continued escalation of foreign enforcement of bribe-makers and bribe-takers continued, with mass arrests or indictments in Colombia and Greece related to offerors and recipients of bribes at issue in several FCPA enforcement actions. In Colombia, according to the Wall St. Journal, prosecutors recently charged six current or former employees of Ecopetrol SA, a majority state-owned oil company, with accepting bribes from employees of PetroTiger. PetroTigers former Chief Executive Officer is scheduled to stand trial in April in a New Jersey federal court on charges of funneling money to one of the Ecopetrol employees arrested, including through consulting contracts with the employees wife, in exchange for contracts. Two other former PetroTiger executives have already pleaded guilty in the case (see prior FCPA Scorecard coverage). In Greece, also according to the Wall St. Journal, authorities recently indicted 64 people related to bribery in the Siemens AG cases. Both alleged offerors of bribes at Siemens, and alleged recipients of bribes at a Greek telephone company, were charged. As previously detailed, eight former Siemens executives were indicted in the U.S. in 2011 related to allegations of bribery in Argentina. Siemens itself reached a record $800 million resolution in 2008 with the DOJ and SEC related to violations in numerous countries including Greece.
Federal Court Releases Transcript of Wire Recording Between Former PetroTiger CEO and General Counsel
On January 12, the U.S. District Court for the District of New Jersey released the transcript of a December 2012 wire recording between the former CEO of PetroTiger and the companys general counsel. In rejecting the former CEOs argument that the recording was subject to the attorney-client privilege, the court ruled the recording did not indicate he was receiving or actively seeking legal counsel from his attorney. The former CEO was indicted in May 2014 on charges of violating the FCPA and conspiring to violate the FCPA, as well as wire fraud and money laundering charges. The former CEO, co-CEO, and general counsel allegedly conspired to secure a $39 million oil services contract by making illicit payments of approximately $335,000 to an official at Colombias national oil company which had ultimate authority to approve the contract. They also allegedly defrauded PetroTiger by taking kickbacks in connection with the acquisition of another company by PetroTiger. The former general counsel pleaded guilty in November 2013 to one count of conspiracy to violate the FCPA and commit wire fraud. The former co-CEO also pleaded guilty to the same charges in February 2014.