TOTAL S.A. WILL PAY $398 MILLION TO SETTLE SEC'S BRIBERY CHARGES REGARDING AN IRANIAN OFFICIAL

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., May 29, 2013 — The Securities and Exchange Commission today charged France-based oil and gas company Total S.A. with violating the Foreign Corrupt Practices Act (FCPA) by paying $60 million in bribes to intermediaries of an Iranian government official who then exercised his influence to help the company obtain valuable contracts to develop significant oil and gas fields in Iran.

The SEC alleges that Total made more than $150 million in profits through the bribery scheme. Total attempted to cover up the true nature of the illegal payments by entering into sham consulting agreements with intermediaries of the Iranian official and mischaracterizing the bribes in its books and records as legitimate "business development expenses" related to the consulting agreements. Total had inadequate systems to properly review the consulting agreements and lacked sufficient internal controls to comply with federal laws prohibiting bribery.

Total, whose securities are publicly traded on the New York Stock Exchange, agreed to pay more than $398 million to settle the SEC’s charges and a parallel criminal matter announced today by the U.S. Department of Justice.

"Total used illicit payments to win business in Iran, and reaped substantial financial benefits as a result," said Andrew M. Calamari, Director of the SEC’s New York Regional Office. "Total must now pay back all of its profits from the company’s corrupt conduct and additionally pay criminal penalties on top of that."

According to the SEC’s order instituting settled administrative proceedings, Total negotiated a development contract in 1995 with the National Iranian Oil Company (NIOC) for the country’s Sirri A and E oil and gas fields. Prior to executing the contract, Total held a meeting with the Iranian official and agreed to enter into a purported consulting agreement with an intermediary he designated. They agreed that Total would make payments to the intermediary under the guise of a consulting agreement when the real purpose was to induce the Iranian official to use his influence to help obtain NIOC’s approval of the development agreement. After the contract was executed, Total corruptly made the bribery payments that resulted in NIOC allowing Total to develop the Sirri A and E oil and gas fields and make more than $150 million in profits.

The SEC’s order requires Total to pay disgorgement of $153 million in illicit profits and retain an independent compliance consultant to review and report on Total’s compliance with the FCPA. Total also must cease and desist from committing or causing any violations of Section 30A, Section 13(b)(2)(A), and Section 13(b)(2)(B) of the Securities Exchange Act of 1934.

In the parallel criminal proceedings, Total agreed to pay a $245.2 million penalty as part of a deferred prosecution agreement. Total also was charged today by the prosecutor of Paris (François Molins, Procureur de la République) of the Tribunal de Grande Instance de Paris for violations of French laws.

The SEC’s investigation was led by Sharon Binger, Alex Janghorbani, and Barry O’Connell of the New York Regional Office’s Enforcement Division with significant assistance from the SEC Enforcement Division’s FCPA Unit and the Department of Justice’s Criminal Division’s Fraud Section. The SEC also appreciates the assistance of French regulatory authorities.

FORMER ARMY CAPTAIN SENTENCED TO PRISON FOR ACCEPTING ILLEGAL GRATUITIES FROM CONTRACTORS IN IRAQ

Map:  Iraq.  Credit:  CIA World Factbook. 

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 1, 2013
Former U.S. Army Captain Sentenced in Oklahoma City to 23 Months in Prison for Conspiracy to Accept Illegal Gratuities

A former U.S. Army Captain was sentenced today in Oklahoma City to serve 23 months in prison for conspiracy to accept thousands of dollars in gratuities from contractors during his deployment to Baghdad, Iraq, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of Oklahoma Sanford C. Coats.

Sean Patrick O’Brien, 38, of Lawton, Okla., was sentenced by U.S. District Judge Stephen P. Friot in the Western District of Oklahoma. In addition to his prison term, O’Brien was sentenced to serve three years of supervised release and ordered to pay $37,500 in restitution to the United States.

O’Brien pleaded guilty on Nov. 9, 2012, to a criminal information charging him with two counts of conspiracy to accept illegal gratuities.

According to court documents, O’Brien, formerly a commissioned officer in the U.S. Army, assisted in the contracting process of U.S. government funds, and was therefore considered a public official. It is a violation of federal law for officers to accept gratuities from contractors dependent upon them for contracts.

According to court documents, from mid-2008 through January 2009, O’Brien, with the assistance of two alleged co-conspirators, unlawfully sought, received and accepted illegal gratuities for helping Iraqi contractors in connection with U.S. government. O’Brien accepted approximately $37,500 in cash payments and jewelry while stationed in Iraq, which he has repatriated to the United States. One of the alleged co-conspirators also offered O’Brien a vacation to a private island.

This case was prosecuted by Assistant U.S. Attorney Scott E. Williams of the Western District of Oklahoma and by Special Trial Attorney Mark Grider of the Justice Department Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR). The case was investigated by the Defense Criminal Investigative Service, the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command, and SIGIR.

FORMER GOVERNMENT EMPLOYEE ADMITS TO TAKING BRIBES FROM CONTRACTORS

FROM: U.S. DEPARTMENT OF JUSTICE

Thursday, February 14, 2013
Georgia Woman Admits to Taking Bribes for the Award of Government Contracts

A former employee at the Marine Corps Logistics Base Albany pleaded guilty today to receiving bribes related to the award of contracts for machine products, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Michelle Rodriguez, 32, of Albany, Ga., pleaded guilty before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During her guilty plea, Rodriguez, who worked as a supply technician in the Maintenance Center Albany (MCA), admitted to participating in a scheme to award contracts for machine products to companies operated by Thomas J. Cole and Frederick Simon, both of whom pleaded guilty to bribery charges in January 2013.

According to court documents, the MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been used in military missions in Afghanistan, Iraq and other parts of the world. To accomplish the scheme, Rodriguez would transmit bid solicitations to Simon by fax or email, usually following up with a text message specifying how much the company seeking the contract should bid. Simon, with Cole’s knowledge, would then bid the amount specified by Rodriguez on each order, which was normally higher than fair market value. Rodriguez was paid $75.00 cash per order. Rodriguez admitted during today’s hearing that she awarded Cole and Simon’s companies nearly 1,300 machine product orders, all in exchange for bribes.

Rodriguez also admitted that in 2011, she began routing some orders through a second company, owned by Cole, because the volume of orders MCA placed with the first company was so high. Rodriguez admitted receiving approximately $161,000 in bribes during the nearly two-year scheme. Cole and Simon previously admitted to personally receiving approximately $209,000 and $74,500 in proceeds from the scheme, respectively. Rodriguez, Cole and Simon all conceded that the total loss to the Department of Defense from overcharges associated with the machine product orders placed during the scheme was approximately $907,000.

At sentencing, Rodriguez faces a maximum potential penalty of 15 years in prison and a fine of twice the gross gain or loss from the offense. As part of her plea agreement with the United States, Rodriguez agreed to forfeit the bribe proceeds she received from the scheme, as well as to pay full restitution to the Department of Defense. The plea agreement also required her to resign her position at the MCA. Sentencing is scheduled for April 25, 2013.

FORMER OWNER AND CEO SCOTT SALYER OF SK FOODS PLEADS GUILTY TO RACKETEERING AND PRICE FIXING IN CALIFORNIA

The following excerpt is from the Department of Justice Antitrust website: 
SACRAMENTO, Calif. — Frederick Scott Salyer, 56, of Pebble Beach, Calif., pleaded guilty today to racketeering and price fixing, U.S. Attorney Benjamin B. Wagner announced. Salyer entered his plea before U.S. District Judge Lawrence K. Karlton.

Between 1990 and 2009, Salyer was the CEO and owner of SK Foods LP, a grower, processor and international seller of tomato paste and other processed agricultural products with facilities in Monterey, Lemoore, Williams and Ripon, Calif. In his plea, Salyer admitted that he operated SK Foods as a racketeering organization. According to the plea agreement, from January 2004 to April 2008, Salyer encouraged food broker Randall Rahal to pay bribes and kickbacks to purchasing officers employed by SK Foods’s customers Kraft Foods, Frito-Lay and B&G Foods. The intent was to induce Kraft’s Robert Watson, Frito-Lay’s Richard Wahl and B&G’s Robert Turner to promote the interests of SK Foods over their employers’ interests. Salyer also admitted that at his direction, SK Foods routinely falsified the lab test results for its tomato paste. Salyer ordered former employees Alan Huey and Jennifer Dahlman to falsify tomato paste grading factors, and SK Foods lied about its product’s percentage of natural tomato soluble solids, mold count, production date and whether the tomato paste qualified as “organic.” Finally, Salyer admitted that he had discussed an illegal target price agreement with other sellers of tomato paste and, when another co-conspirator offered a lower price, Salyer got the co-conspirator to agree to withdraw that offer to a customer.

U.S. Attorney Benjamin B. Wagner said: “Food grown in California’s Central Valley feeds people all over the United States; agriculture and food processing are critical to this region’s economy. This case of corporate corruption was met with the government’s full arsenal of law enforcement tools, which included grand jury process, an informant operation, wiretaps, search warrants, computer forensics and arrests. This office and its partners will continue to use these tools to attack fraud and corruption wherever it is detected in this district.”

“The Antitrust Division has made antitrust enforcement in the agriculture sector a priority,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division is committed to continuing to work with its law enforcement partners to crack down on illegal price fixing conspiracies that affect products used by consumers in their everyday lives.”

“Corruption in any form is despicable, but when such occurs within the food industry, it erodes public trust in products and threatens the industry as a whole,” said Herbert M. Brown, Special Agent in Charge of the FBI’s Sacramento Field Office. “The FBI continues to tirelessly combat white collar crime that is motivated by unscrupulous greed.”

“Today’s guilty plea is the result of a combined law enforcement effort against a corrupt organization motivated by greed and profit,” said Internal Revenue Service-Criminal Investigation (IRS-CI) Assistant Special Agent in Charge Rick Goss. “These crimes touched the lives of many unsuspecting citizens and the public should know that we will hold accountable those individuals who put personal financial gain above the safety and well-being of the general public.”

“The Food and Drug Administration-Office of Criminal Investigations is fully committed to investigating and supporting the prosecution of those who defraud consumers by manufacturing and selling adulterated foods to an unsuspecting public for economic gain. We continue to look forward to working with our law enforcement partners and commend the U.S. Attorney’s Office for their diligence,” said Thomas Emerick, Special Agent in Charge, Food and Drug Administration (FDA)-Office of Criminal Investigations, Los Angeles Field Office.

Salyer’s plea caps an investigative effort that began in August 2006, when federal agents executed a search warrant at the home of Anthony Manuel, an SK Foods employee who had embezzled approximately $1 million from his former employer, a competitor of SK Foods. Manuel promptly confessed to the embezzlement and later told agents about the crimes to which Salyer and others have now pleaded guilty. In 2007 and 2008, Manuel recorded conversations with SK Foods executives, including Salyer, and provided documents corroborating his account of the crimes being committed at SK Foods.  Wiretaps of Rahal telephones revealed that Rahal was discussing bribery and food mislabeling with Salyer and other senior officers of SK Foods. The wiretap also confirmed that Rahal was bribing Watson, Wahl, Turner and Safeway Inc. employee Michael Chavez. On April 18, 2008, agents of the FBI, IRS-CI and FDA Office of Criminal Investigations executed search warrants at the offices of SK Foods and at Salyer’s residence in Pebble Beach, seizing documents and copying SK Foods’s computer servers.

In 2009, the bribe recipients and many of Salyer’s subordinates at SK Foods pleaded guilty before Judge Karlton. Also that year, creditors forced SK Foods into bankruptcy. According to court documents, in late 2009, Salyer moved more than $3 million to Andorra and made a $50,000 deposit on a condominium there. Andorra is a small principality in the Pyrenees Mountains between France and Spain and has no extradition treaty with the United States. When agents learned of Salyer’s plans, they obtained an arrest warrant for him, which was executed on Feb. 4, 2010, when Salyer made what was to have been a short visit back to the United States. Salyer was jailed as a flight risk until Sept. 3, 2010, when he was released to house arrest after posting a $6 million bond.

Salyer was indicted by a federal grand jury on Feb. 18, 2010, with a superseding indictment brought against him on April 29, 2010. According to court documents, several issues have been litigated, such as whether the evidence against Salyer had been obtained lawfully. Judge Karlton ultimately rejected Salyer’s efforts to suppress the evidence gathered by Manuel. Judge Karlton also upheld the wiretap and search warrant applications.

Salyer is scheduled to be sentenced by Judge Karlton on July 10, 2012, at 9:15 a.m EDT. The maximum statutory penalty for a Racketeer Influenced and Corrupt Organizations (RICO) violation is 20 years in prison and a $250,000 fine. The maximum statutory penalty for price fixing is 10 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. In the plea agreement, Salyer may argue for a sentence as low as four years and the government may argue for a sentence up to seven years. Salyer also agrees to forfeit to the United States all of his interest in the $3 million that he transferred to Andorra.

This is the 11th guilty plea in an extensive investigation by the FBI, IRS-CI, FDA Office of Criminal Investigations and the Antitrust Division of the U.S. Department of Justice. The case is currently being prosecuted by Assistant U.S. Attorneys Matthew D. Segal, R. Steven Lapham and Jared C. Dolan, and Antitrust Division Trial Attorneys Anna T. Pletcher and Tai Milder.