Bribery scandals in Brazil and Iraq connected with SBM Offshore claimed more scalps this month. We previously covered here how SBM's former CEO Tony Mace had been sentenced to prison in the US for corruption, whilst the company itself was fined over US$475 million for paying bribes. It hasn't stopped there.
Now, UK prosecutors have frozen a GBP5 million (US$6 million) apartment in London owned by SBM's former Brazilian agent, Julio Faerman. Faerman was a key player bribery scandal known as Lava Jato or the Car Wash case (full details here) which saw millions paid in bribes to officials at the Brazilian state oil company, Petrobras, and to leading politicians there.
Singaporean rig builders Sembmarine and Keppel were caught up in the Car Wash investigation (as we reported here), as well as notorious Brazilian engineering conglomerate Odebrecht (here). The investigation is now extending outside Brazil, as authorities try to track cash sent offshore by the crooks involved.
The UK Serious Fraud Office (SFO) claims the expensive property in the well-to-do west London area of Kensington was purchased using cash "linked to corrupt funds" from the disgraced commission-broker. This emerged as Judge Johannah Cutts ruled on a "civil recovery" investigation into Faerman. The SFO has been seeking more information into funds from Swiss bank accounts held by a series of offshore companies seemingly controlled by Faerman, and had originally applied to freeze the property in January 2019.
The full judgement is available online here. As Judge Cutts noted, Faerman has already agreed to pay US$54 million back to Brazilian authorities in the Car Wash case, but he was presumably hoping to hang onto his place in the British capital, even though the British judgement refers to him as being in custody in his homeland.
Judge Cutts ruled against Faerman's request that the SFO should drop its requests for further information on his finances, stating that, "there is a clear and compelling public interest in maintaining this disclosure order. The respondent (Faerman) does not challenge the merits of the SFO's suspicions concerning the legality of the funds used to purchase the property."
Bloomberg reported that Faerman's lawyer had declined to comment. Access to information relating to the shell companies and the Swiss accounts may throw up more of interest than just the funding of the single flat in London, let's see.
But it wasn't just in Brazil where SBM was paying massive bribes: two more its former employees and agents have now also been found guilty in London of paying bribes in Iraq. A third man accused, SBM Offshore's former senior sales manager, Paul Bond, is due to face a retrial in London after the jury could not reach a verdict on the two charges against him. All three defendants had pleaded not guilty to all charges.
The guilty verdicts relate to SBM's relationship with Monaco-based "marketing company" and brokerage, Unaoil, which was paying bribes to Iraqi officials to award work to its clients, including SBM and Australia's Leighton Offshore.
Ziad Akle, the former Iraq territory manager for Unaoil, was convicted in Southwark Crown Court earlier this month of two counts of conspiracy to make corrupt payments, whilst Stephen Whitely, a former SMB vice president, who later worked for Unaoil as general manager, was found guilty of one count of conspiracy, and cleared of one charge. The pair is due to receive their sentences shortly. You can read more about the sprawling Unaoil investigation here.
The SFO press release here sets out the case against them. The convictions followed the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments.
The SFO states that, "In the years of reconstruction following the overthrow of Saddam Hussein in 2003, the three men conspired with others to pay bribes to public officials at the Iraqi South Oil Company and, and in Basil Al Jarah's case the Iraqi Ministry of Oil, to secure oil contracts for Unaoil and its clients. The post-occupation Iraqi government had commissioned the South Oil Company to run projects as part of a 'master plan' to rebuild Iraq's oil industry and thereby expand the country's oil export capacity.
"This included the installation of offshore mooring buoys and new oil pipelines. To ensure Unaoil benefitted from these state-run projects, the defendants and co-conspirators conspired to bribe public officials at the South Oil Company and Ministry of Oil to secure contracts for Unaoil and its clients SBM Offshore. Basil Al Jarah also conspired to bribe public officials at the South Oil Company and the Ministry of Oil to secure contracts for Unaoil and its client Leighton Offshore.
"Basil Al Jarah admitted to paying bribes totalling over $6 million to secure contracts worth $800 million for the supply of oil pipelines and offshore mooring buoys. Ziad Akle and Stephen Whiteley were found guilty of paying over $500,000 in bribes to secure the $55 million contract for the offshore mooring buoys."
The SFO thanked the Australian Federal Police, the French Parquet National Financier, the Police Judiciaires of the Principality of Monaco, the Fiscal Information and Investigation Service (FIOD) of the Netherlands, the United States Department of Justice, Greater Manchester Police, the Metropolitan Police, the National Crime Agency and West Mercia Constabulary for their assistance in the case, demonstrating how complex these international bribery cases are. The fact the contract was awarded in 2008 and the bribes paid twelve years ago also shows how long these cases take to come to trial.
The SFO's very illustrative graphic summarises the case (who knew anti-corruption officials made such good graphics?):
In 2019 in the United States, Unaoil's former CEO Cyrus Ahsani and former COO Saman Ahsani each pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA). In 2018, Unaoil's former business development director, Steven Hunter, had also pleaded guilty to one count of conspiracy to violate the FCPA. All three are British citizens and all three are still waiting to be sentenced, according to the Spotlight on Corruption website here.
Now, do we know of any other Dutch-registered oilfield services companies with offices in Monaco which have been very successful at winning work in frontier markets and are subject to investigation in both Monaco and Italy? Hint here.
