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KBR Exec Pleads Guilty to Violating Foreign Corrupt Practices Act

December 6, 2010

For ten years, Kellogg, Brown, & Root, Inc. conspired to bribe Nigerian officials to obtain more than $6 billion worth of “engineering, procurement and construction (EPC) contracts” related to a liquefied natural gas facility, according to a guilty plea of former KBR VP, Wojciech J. Chodan, who faces up to 60 months in prison for his actions. DoJ announced the Foreign Corrupt Practices Act conviction today:

“KBR, Technip S.A. (Technip), Snamprogetti Netherlands B.V. (Snamprogetti) and a Japanese engineering and construction company were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. Chodan admitted that from approximately 1994 through June 2004, he and his co-conspirators agreed to pay bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the EPC contracts. Chodan recommended and agreed to the joint venture’s hiring of two agents, Jeffrey Tesler and a Japanese trading company, to pay the bribes. During the course of the bribery scheme, the joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company. At crucial junctures preceding the award of EPC contracts, Chodan and his co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate the bribes to Nigerian government officials.”

Chodan’s conviction follows convictions of other KBR executives in related cases, including former CEO, Albert “Jack” Stanley, and the guilty plea of successor company Kellogg Brown and Root, LLC, which agreed to pay a $402 million fine. In September, Technip and Snamprogetti Netherlands BV entered into deferred prosecution agreements, and each company agreed to pay $240 million, bringing the total recovery for the FCPA fraud to well over $1 billion. Under the Dodd-Frank Act, which was signed on July 21, 2010, whistleblowers who expose such securities fraud are entitled to between 10-30% of the recovery, creating a potential whistleblower award in a case like the KBR Nigerian bribery of as much as $300,000,000.

To report securities fraud, contact Frohsin & Barger.

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