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Three Individuals Are Sentenced For Their Involvement in the Bonny Island / TSKJ Joint Venture FCPA Case

Posted in Criminal Charges in Securities Cases, Executive Officer Matters, Foreign Corrupt Practices Act

Another chapter ended in the series of FCPA criminal prosecutions arising out of the TSKJ Joint Venture this week, when Texas federal Judge Keith P. Ellison sentenced three men for their role in the portion of the case involving Kellogg Brown & Root. On Thursday, February 23, 2012, former KBR executive, Albert "Jack" Stanley was sentenced to 30 months in jail, while Jeffrey Tesler, who controlled an entity through which payments were funneled, was sentenced to 21 months in prison. On Wednesday, February 22, 2012, Wojciech Chodan, the former Vice President of M.W. Kellogg, Ltd., received a sentence of one year unsupervised probation.

Despite the recent struggles the Government has faced in cases like the FCPA Sting Case, the Lindsey Manufacturing case and the case against John O’Shea, it has been quite successful in prosecuting the members of this joint venture. The TSKJ Joint Venture (named for the first initials for the four companies involved) consisted of four companies, each of whom ultimately settled with prosecutors and other regulators: Technip S.A., Snamprogetti Netherlands B.V., Kellogg Brown & Root, and JGC Corporation (collectively paying over $1.6 billion, as discussed by Richard Cassin in The FCPA Blog). The joint venture, which was formed to secure contracts from Nigeria LNG, Ltd. (which was formed by the Nigerian government for oil production). Between 1995 and 2004, the members of the joint venture obtained engineering procurement and construction contracts ("EPC contracts") for oil and gas projects on Bonny Island, Nigeria.

Albert Stanley was the senior representative for KBR on the joint venture’s steering committee, which made major decisions on behalf of the joint venture. Mr. Stanley authorized the joint venture to hire two consulting companies to pay bribes to Nigerian government officials to assist the joint venture in obtaining the EPC contracts. The Department of Justice announced on September 3, 2008 that Mr. Stanley had entered into a plea agreement, agreeing to cooperate, and pleading guilty to one count of conspiring to violate the FCPA and one count of conspiring to commit mail and wire fraud. For sentencing purposes, he agreed to a $10.8 million loss figure.

On March 5, 2009, prosecutors announced that they had indicted Wojciech J Chodan, the Vice President of M.W. Kellogg, Ltd. who assisted in securing EPC contracts, and Jeffrey Tesler, who controlled Tri-Star Investments, Ltd., which was used to funnel payments from the joint venture. Mr. Chodan agreed to cooperate and forfeit $726,885, and pled guilty on December 6, 2010 to one count of conspiracy. On March 11, 2011, Mr. Tesler also agreed to cooperate and forfeit $148,964,568.67, and pled guilty (to one count of conspiracy and one count of FCPA violation).

This week, the three men learned their fate before Judge Ellison;

• On Thursday, February 23, 2012, Mr. Stanley was 30 months in prison, plus three years supervised release and a $1,55 million fine;

• Earlier in the day, Mr. Tesler received a sentence of 21 months, plus two years of supervised release;

• On Wednesday, February 22, 2012, Mr. Chodan was sentenced to one year of unsupervised release and a $20,000 fine (and he will be allowed to return to Great Britain).

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