UK Businessman Irving Pleads Guilty In Oil-For-Food Case
April 21 2009 - 7:24PM
Dow Jones News
A British businessman pleaded guilty to a criminal charge
Tuesday in connection with the U.N.'s scandal-ridden oil-for-food
program.
John Irving, who had consented to be extradited from the U.K.,
pleaded guilty to unlawful transport and sale of merchandise into
the U.S. The plea came at a hearing before U.S. District Judge
Denny Chin in Manhattan on Tuesday.
A lawyer for Irving didn't immediately return a phone call
seeking comment.
Under a plea agreement with the government, Irving will face a
sentencing guidelines range of zero to six months in prison.
As part of the agreement, prosecutors said they wouldn't pursue
other charges against Irving in the alleged scheme to pay millions
of dollars in secret kickbacks to the Iraqi government in order to
obtain oil from the U.N. program.
Prosecutors alleged that Irving assisted Bayoil Supply &
Trading Ltd. in transporting a cargo of crude oil into the U.S.
that was purchased under the oil-for-food program. He did so
despite being told that entity with the contract for the crude oil
had promised to pay a secret surcharge to the Iraqi government,
prosecutors said.
Texas oilman David B. Chalmers Jr. and two Bayoil companies
pleaded guilty to conspiracy in August 2007. Chalmers was sentenced
to two years in prison in March 2008.
The oil-for-food program was designed to allow the government of
Iraq, which was facing international sanctions, to sell oil in
exchange for food, medical supplies and other humanitarian needs.
Payments under the program were supposed to be made to a
U.N.-controlled escrow account, not directly to the Iraqi
government.
An independent investigation headed by former Federal Reserve
Chairman Paul A. Volcker in 2005 found that Saddam Hussein's
government was allowed to pocket billions of dollars by
manipulating the program, and kickbacks were paid to U.N.
officials. The program began in 1996 and ended in 2003.
Eight people, including Irving and Chalmers, have either pleaded
guilty or been convicted of criminal charges in the matter.
Criminal charges are pending against several other individuals,
including the program's former executive director, Benon V.
Sevan.
Oscar S. Wyatt Jr., former chairman of Coastal Corp., pleaded
guilty to a single count of conspiracy in October 2007, abruptly
ending his trial on conspiracy, wire fraud and other charges on its
12th day. He was sentenced to 12 months and one day in prison in
November 2007.
Last June, Iraq's new government sued Wyatt, Chalmers and dozens
of companies for alleged corruption under the oil-for-food
program.
Swiss oil-trading firm Vitol SA pleaded guilty to grand larceny
in the first degree in state court in November 2007 in connection
with a scheme to pay kickbacks through associated entities or third
parties in exchange for oil. Vitol agreed to pay restitution of $13
million to the Development Fund for Iraq and will make a payment of
$4.5 million to the city and state of New York.
Chevron Corp. (CVX) in November 2007 agreed to pay $30 million
to settle civil and criminal charges related to secret surcharges
paid by third-party merchants in exchange for oil under the
program.
In February 2007, El Paso Corp. (EP), which acquired Coastal
Corp. in 2001, agreed to pay $7.7 million to settle civil and
criminal charges that it indirectly paid $5.5 million in illegal
surcharges to Iraq through purchases of crude oil from outside
parties under the oil-for-food program.
-By Chad Bray, Dow Jones Newswires; 212-227-2017;
chad.bray@dowjones.com