The former chief executive officer of PetroTiger Ltd., a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey, pleaded guilty today for his role in a scheme to pay bribes to foreign government officials and to defraud PetroTiger.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.
Knut Hammarskjold, 42, of Greenville, S.C., the former co-CEO of PetroTiger, pleaded guilty before U.S. District Judge Josephy E. Irenas in Camden, N.J., to an information charging one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit wire fraud and is scheduled for sentencing on May 16, 2014.
Gregory Weisman, 42, of Moorestown, N.J., the former general counsel of PetroTiger, pleaded guilty to the same charges on Nov. 8, 2013.
Charges remain pending against Joseph Sigelman, 42, of Miami and the Philippines, the other former co-CEO of PetroTiger, for conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money and substantive violations of the FCPA.
According to the charges, the defendants allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million.
To conceal the bribes, the defendants allegedly first attempted to make the payments to a bank account in the name of the foreign official’s wife, for purported consulting services she did not perform.
The charges allege that Sigelman and Hammarskjold provided Weisman invoices including her bank account information.
The defendants made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.
In addition, court documents allege that the defendants attempted to secure kickback payments at the expense of several of PetroTiger’s board members.
According to the criminal charges, the defendants were negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition.
In exchange for negotiating a higher purchase price for the acquisition, two of the owners of the target company agreed to kick back to the defendants a portion of the increased purchase price.
According to the charges, to conceal the kickback payments, the defendants had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments, and used the code name “Manila Split” to refer to the payments amongst themselves.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013.
Hammarskjold was arrested on Nov. 20, 2013, at Newark Liberty International Airport.
Sigelman was arrested on Jan. 3, 2014, in the Philippines.
The charges against Sigelman, Hammarskjold and Weisman were unsealed on Jan. 6, 2014.
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost.
The conspiracy to commit wire fraud count carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the value gained or lost.
As to the charges in the complaint pending against Sigelman, they are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter.
The department also thanks the Republic of the Philippines, including the Bureau of Immigration, and the Republic of Panama for their assistance in this matter.
Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s Newark Division.
The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Aaron Mendelsohn of the District of New Jersey.