ERHC Energy Inc (ERHE)

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Have you read the SEC complaint? Call it what you will , that is fine by me, but you can NOT deny the facts, this case sets some interesting presedence in relation to FCPA investigations, formal charges and SOL.... IMO ERHE attorneys are going over this case in great detail, it is very interesting and topical for sure....

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
vs.
HALLIBURTON COMPANY
and
KBR, INC.,
Defendants.
Civil Action No.: 4:09-399
COMPLAINT
http://www.sec.gov/litigation/complaints/2009/comp20897.pdf

Between at least 1995 and 2004, senior executives at KBR and others, devised and implemented a scheme to bribe Nigerian government officials to assist in obtaining multiple contracts worth over $6 billion to build liquefied natural gas (“LNG”) production facilities on Bonny Island, Nigeria. A four-company joint venture, of which KBR was a member, won the contracts. To conceal the illicit payments, KBR and others, through the joint venture, entered into sham “consulting” or “services” agreements with intermediaries who would then funnel their purportedly legitimate fees to Nigerian officials. Specifically, KBR and others, through the joint venture, implemented this scheme by using a Gibraltar shell company controlled by a solicitor based in the United Kingdom (“the UK Agent”) and a Japanese trading company (“the Japanese Agent”) as conduits for the bribes.

The Commission brings this action against the Defendants seeking permanent injunctive relief to prevent future violations of the federal securities laws, and seeking their ill-gotten gains

FACTUAL ALLEGATIONS
KBR and Others Agree to Pay Bribes to Obtain Nigeria LNG Contract
11.
In 1991, in order to pursue LNG projects in Nigeria, KBR predecessor Kellogg formed a joint venture with three other multinational engineering and construction companies. The joint venture began to pursue bidding on a construction contract for Nigeria LNG to build two LNG trains in Nigeria.
12.
Officers and employees at the highest level of KBR, including its former CEO, Albert Jackson Stanley (“Stanley”), were closely involved in the joint venture and its business in Nigeria from the joint venture’s inception. Each member of the joint venture had one or more representatives on a steering committee that ran the joint venture. Stanley was a member of that steering committee at all relevant times. Other high ranking personnel of KBR were also closely involved in the joint venture; these included sales, legal and operational personnel.
13.
From the inception of the joint venture, the sales officials and other senior personnel of the four joint venture members believed that it was necessary to pay bribes to Nigerian government officials to assist in obtaining the LNG construction contracts. In
4
conjunction with the Japanese Agent, the sales officials of the joint venture formed what they called the “cultural committee” to consider how to implement, but hide, the scheme to pay bribes. The committee members discussed: (i) entering into sham consulting contracts with various individuals or shell corporations; (ii) “downloading” or “offloading” the payments through subcontractors or vendors; and (iii) entering into phony “services” contracts with the Japanese Agent. Ostensibly, the consultants or vendors would be retained and paid to perform legitimate services. In actuality, the consultants or vendors would use the money in whole or in part to make corrupt payments to Nigerian government officials on behalf of the joint venture.
14.
Eventually, the joint venture decided to funnel the payments through two entities, using the UK Agent to pay high-ranking Nigerian officials, and using the Japanese Agent to pay lower-level Nigerian officials. These agents were sometimes referred to as “Cultural Advisors.” The joint venture steering committee approved the use of the two agents, and the steering committee approved the contracts eventually entered into between the joint venture and the two agents.
15.
In pursuing the bidding with Nigeria LNG, in holding meetings of the steering committee and the cultural committee, in carrying out the construction contracts, and in all related matters, KBR and the other members of the joint venture routinely made use of the U.S. mails, and of U.S. common carriers, and of other instrumentalities of U.S. interstate commerce. Payments made by the joint venture to the bank accounts of the UK Agent were routed through banks in New York, New York.