In March, 2009, the Department of Justice ("DOJ") unsealed criminal indictments against Jeffrey Tesler and Wojciech Chodan, both United Kingdom citizens and residents, for their role in the KBR Nigeria bribery scheme. This scheme has been the focus of two prior FCPA enforcements actions. In February, 2009, Kellogg Brown & Root LLC, and KBR Inc., (collectively "KBR") and Halliburton Company agreed to settle DOJ and SEC enforcement actions relating to the award of $6 billion in Nigerian construction contracts between 1995 and 2004. The $579 million in combined criminal and civil penalties are the largest ever against a U.S. company in an FCPA enforcement action and the second largest ever. In September 2008, Albert Stanley, a former officer and director of KBR, pleaded guilty to conspiracy to violate the FCPA for his participation in the bribery scheme. He faces seven years in prison sentence and was ordered to pay a $10.8 million fine.
The allegations against Tesler and Chodan involve the same core conduct as the two previous FCPA enforcement actions. Namely, that the KBR entities were part of a joint venture ("JV") in Nigeria to design, build and expand liquefied natural gas facilities and that the JV hired, among others, Tesler and Chodan as agents or consultants to offer and pay bribes to Nigerian government officials or individuals employed by entities owned or controlled by the Nigerian government to secure the lucrative contracts.
The indictment charges that Chodan was a former salesperson and consultant of a United Kingdom subsidiary of a KBR entity (one of the companies with an interest in the JV) and that Tesler was hired by the JV as an agent and used a Gibraltar corporation as a corporate vehicle to enter into agent contracts with and receive payments from the JV. The eleven count indictment (one count of conspiracy to violate the FCPA and ten counts of violating the FCPA's anti-bribery provisions) alleges that the defendants willfully and knowingly conspired and agreed with Stanley, the JV, and the individual JV companies including KBR to bribe the Nigerian officials and that the defendants did in fact make bribe payments to the Nigerian officials all in an effort to obtain and retain business for KBR and the JV. The substantive FCPA anti-bribery charges against the defendants are based on various e-mail communications sent to and through the U.S. in which the bribery scheme was planned and executed and various corrupt U.S. dollar payments made via correspondent bank accounts in the U.S.
According to DOJ, Tesler has been arrested by United Kingdom authorities and there is an outstanding arrest warrant in the U.S. for Chodan. If convicted, the defendants face a maximum prison sentence of 55 years. In addition, the indictment also seeks forfeiture of approximately $132 million from the defendants which the indictment alleges constitutes proceeds traceable to the improper conduct.