A Florida defense and government contracting company, IAP Worldwide Services Inc., entered into a non-prosecution agreement with the US Dept. of Justice and agreed to pay a $7.1 million penalty to resolve the government’s investigation into whether the company conspired to bribe Kuwaiti officials in order to secure a government contract.
A former vice president of IAP also pleaded guilty Tuesday to conspiracy to violate the Foreign Corrupt Practices Act for his involvement in the bribery scheme, the DOJ said in a statement.
James Michael Rama, of Lynchburg, Virginia, pleaded guilty before US District Court Judge James C. Cacheris of the Eastern District of Virginia to one count of conspiracy to violate the anti-bribery provisions of the FCPA. Sentencing is scheduled for Sept. 11, 2015.
In 2004, according to the DOJ, Kuwait’s Ministry of the Interior initiated the Kuwait Security Program, a project that was intended to provide nationwide surveillance capabilities for several Kuwaiti government agencies primarily through the use of closed-circuit television.
According to admissions made in connection with both the non-prosecution agreement and Rama’s plea agreement, the DOJ said, IAP and Rama schemed to ensure that the company worked as the consultant for Phase I of the project so that it could tailor the requirements for the Phase II contracts to its strengths–giving it an advantage in the Phase II bidding.
To that end, both IAP and Rama admitted that in February 2006, executives and senior employees of IAP, including Rama, set up a shell company called “Ramaco” to bid on Phase I, in part to conceal IAP’s role.
Ultimately, Ramaco secured the Phase I contract for approximately $4 million. According to admissions made in connection with both agreements, the DOJ said, Rama and IAP agreed that half of that amount would be diverted to a consultant who would pay bribes to Kuwaiti government officials to assist IAP in obtaining and retaining the Phase I contract and to obtain the Phase II contract.
IAP and Rama admitted that they disguised the payments by transferring funds Ramaco received to an IAP bank account and then to the consultant through a series of accounts and intermediaries.
According to the factual statements incorporated into both the non-prosecution agreement and Rama’s plea agreement, between September 2006 and March 2008, IAP and its co-conspirators paid the consultant approximately $1,783,688 with the understanding that some or all of the funds would be used to bribe Kuwaiti government officials, the DOJ said.
Based on a variety of factors, including IAP’s cooperation, the Criminal Division entered into a non-prosecution agreement with the company, the DOJ said. The agreement requires IAP’s continued cooperation and for the company to conduct a review of internal controls, make modifications and report to the Criminal Division and to the US Attorney’s Office of the Eastern District of Virginia regarding remediation.
On Monday, the former co-chief executive officer of PetroTiger Ltd.–a British Virgin Islands oil and gas company with operations in Colombia and formerly with an office in New Jersey–pleaded guilty to conspiring to pay bribes to a foreign government official, also in violation of the FCPA, the DOJ said.
Joseph Sigelman, of Miami, admitted at his plea hearing to conspiring with co-CEO Knut Hammarskjold, PetroTiger’s former general counsel Gregory Weisman, and others to make illegal payments of $333,500 to David Duran, an employee of the Colombian national oil company, Ecopetrol, the DOJ said in a separate statement.
Sigelman admitted to making the payments in exchange for Duran’s assistance in securing a $45 million oil services contract for PetroTiger.
He is the third former PetroTiger executive to plead guilty in the case. On Nov. 8, 2013, Weisman pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud. On Feb. 18, 2014, Hammarskjold pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud.
The DOJ said it was alerted the case through a voluntary disclosure by PetroTiger, which fully cooperated with its investigation.
