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Ex-KBR CEO Sentenced to 30 Months for Nigerian Bribe Scheme
Posted By Deborah Hensel On February 23, 2012 @ 9:55 pm In Africa, Restitution, USA | Comments Disabled
HOUSTON — Former chief executive of KBR Inc. Albert “Jack” Stanley, 69, was sentenced to 30 months in prison followed by three years supervised release Thursday for his role in scheme to bribe Nigerian officials for contracts to build a liquefied natural gas facility.
The first-in of three government cooperators, Stanley had faced an 84-month sentence following a guilty plea in 2008. He got less because federal prosecutors deemed his cooperation to be substantial enough to recommend leniency and a federal judge in Houston agreed. The other two defendants cooperating–both U.K. residents–also received downward departures.
Second-in cooperator Wojciech Chodan, a KBR consultant hired by Stanley to keep the bribery scheme going, was given a year of unsupervised probation in the U.K. yesterday and a $20,000 fine. Earlier today, third-in cooperator Jeffrey Tesler, a South London solicitor who set up TSKJ’s offshore accounts, received 21 months in prison followed by two years supervised release and a $25,000 fine.
For two years as a sole cooperator, Stanley, who agreed to pay $10.8 million in restitution to KBR, enabled prosecutors and the U.S. Securities and Exchange Commission to win recoveries of more than $1.7 billion from three of the four partners in a joint venture known as TSKJ. Those partners were Halliburton Co.-owned KBR, which agreed to pay $579 million in February 2009; Paris-based Technip S.A., which agreed to pay $338 million in June 2010; and Eni SpA-owned Snamprogetti Netherlands BV, which agreed to pay $365 million in July 2010.
Stanley’s attorney, Larry Veselka of Smyser Kaplan & Veselka LLP , told Ellison today his client was the first defendant who “stuck his head in the lion’s mouth.” His cooperation, Veselka said, helped the government develop the largest FCPA case in U.S. history, referring to the fact that the total recovery has been over $1.7 billion.
But U.S District Judge Keith Ellison in Houston, who has presided over the case since its inception in 2008, turned Veselka’s argument around on the defense.
“The fact that it was so large is a product of the fact that the fraud was so large,” Ellison said.
William J. Stuckwisch, assistant chief of the Justice Department’s criminal Fraud Section, added that in Stanley’s case, he could have cooperated much sooner but chose to wait until September 2008. “Before that, he met with us twice and gave us misleading information,” said Stuckwisch, who participated by phone from Washington, D.C. “I don’t want you left with the impression that he came in and began cooperating with us early on.”
Fraud Section deputy chief Patrick Stokes described Stanley not as a whistleblower but rather an instigator who perpetrated more than 10 years of corruption. Stokes said Stanley not only engaged in the Bonny Island bribery scheme but he also stole from Halliburton Co.-owned KBR in the form of kickbacks.
Stokes also countered Stanley’s claim that the court should consider leniency in light of the fact that he was the product of a dysfunctional childhood but had overcome it to rise to the pinnacle of his profession, traveling the world in private jets and meeting heads of state.
Stanley then expressed remorse and said he’d turned around his personal life, which previously had been plagued by his alcoholism. Ellison commended him for conquering his demons, but was not moved to mitigate the sentence on that basis. Blue collar criminals with much greater impetus to commit crimes–such as three hungry kids and a wife who needs cancer treatments–don’t get that kind of consideration, Ellison said, and they don’t have the advantages in life that white-collar criminals have.
Ellison did not impose an additional fine, but ordered Stanley to pay restitution of $1,000 a month following his release from prison to cover the $1.55 million he still owes. Veselka had asked Ellison to reduce the monthly payment to $200 but the judge declined citing the fact that Stanley still owns a $3 million home.
Stanley pleaded guilty in 2008 to one count of conspiring to bribe Nigerian government officials on behalf of a KBR-led joint venture to develop a liquefied natural gas facility in Bonny Island, Nigeria and one count of conspiracy to commit mail and wire fraud through kickbacks.
“These sentences reflect not only the defendants’ illegal acts, but also their substantial cooperation with the government,” Mythili Raman, Principal Deputy Assistant Attorney General for the Criminal Division, said in a statement . “This case shows the importance the department places on putting an end to foreign bribery.”
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