Former PetroTiger Ltd. CEO Joseph Sigelman, was indicted on U.S. charges that he bribed an official at Ecopetrol SA (ECOPETL), Colombia’s state-controlled oil company, to obtain a $39.6 million contract. PettroTiger is based in the Virgin Islands.
According to court records, Sigelman and others 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, they 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 conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed. Sigelman and his conspirators then took steps to conceal the bribe payments from PetroTiger’s board members. In addition, court documents allege that Sigelman and others attempted to secure kickback payments while 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 more favorable terms for the owners of the target company, two of the owners agreed to kick back to the conspirators a portion of the increased purchase price. To conceal the kickback payments, Sigelman and others 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 was indicted by a grand jury today in Newark, New Jersey for violating the Foreign Corrupt Practices Act (FCPA) and conspiracy to launder money. PetroTiger’s former co-CEO, Knut Hammarskjold, and former general counsel, Gregory Weisman already pleaded guilty in the case.
The U.S. also charged that the men engaged in a kickback scheme. Sigelman, Hammarskjold and Weisman “engaged in a scheme to obtain kickbacks at the expense of their investing partners, and to pay bribes to a foreign official in order to secure approval for a lucrative oil services contract,” according to the indictment.
The indictment comes as the U.S. cracks down on foreign bribery by using the FCPA, which bars payment of money or giving anything of value to foreign officials to obtain or retain business. PetroTiger is a British Virgin Islands oil and gas company with subsidiaries and offices in Colombia and New Jersey.
The case is U.S. v. Sigelman, District of New Jersey (Camden).
Jeffrey Newman represents whistleblowers
