On December 22, 2011, the United Stated District Court for the District of Columbia sentenced Ousama M. Naaman, a former agent for Innospec, to 30 months in prison and a $250,000 fine. Naaman was sentenced by the District Court for his role in defrauding the United Nations Oil for Food Program (“OFFP”) and bribing various Iraqi officials to secure lucrative government contracts. Naaman, along with other individuals involved in the Innospec bribery scheme, previously settled civil claims related to these activities with the Securities and Exchange Commission (“SEC”) for over $1.5 million.
Naaman, a duel citizen of Canada and Lebanon, was the foreign agent for Innospec and one of its subsidiaries. He was indicted on August 7, 2008, arrested in Germany on July 30, 2009, and later extradited to the United States. Following the filing of superseding charges on June 24, 2010, Naaman pleaded guilty to two counts on June 25, 2010. Count one, under 18 U.S.C. § 371, was for conspiracy to defraud the UN and violating the Foreign Corrupt Practices Act’s (“FCPA”) provisions on falsifying books and records of a U.S. issuer; and Count two encompassed two charges, under 15 U.S.C. § 78dd-1 for violating the FCPA and under 18 U.S.C. § 2 as an aider and abettor.
According to court documents, from 2001 – 2008, Naaman negotiated fraudulent OFFP contracts, adding 10 percent over the contract price to pay for kickbacks to government officials, and paid over $6.8 million in money, travel and entertainment to the Iraqi Ministry of Oil and the Trade Bank of Iraq. Each of these actions was done to secure favorable deals and exchange rates for selling Innospec’s chemical products to Iraqi officials. In addition to securing these contracts, Naaman also falsified records, received a $2.7 million commission, and pocketed $750,000 from Innospec intended for additional bribes.
The District Court sentenced Naaman to 30 months in prison followed by 36 months of supervised release. The $250,000 in criminal fines will be deducted from Naaman’s already settled civil claims, which included disgorgement and a civil penalty of $1,315,144.