Innospec Inc. 2010
Innospec Inc.
Innospec Inc. is a company registered in the United States with its listing on the New York Stock Exchange. The company primarily engages in the manufacture and sale of fuel and other power-related chemicals. Under the main USA Company are two subsidiary structures which include the United Kingdom Innospec Ltd. and the Switzerland-registered Alcor Chemic Vertriebs GmbH.
The company was involved in graft cases. State officials in two countries namely Indonesia and Iraq received bribed to facilitate the attainment of contracts from the two governments to supply products from Innospec Ltd. Tetraethyl Lead was the product in question which is used as an octane booster and added to engine fuel. The problem was that fuel containing Tetraethyl Lead was banned for use in the United Kingdom in the year 2000 as it was confirmed to be linked to neurological damage. Other charges against the company involved defrauding the United Nation, Violation of the Foreign Corrupt Practices Act (FCPA), and the violation of the U.S. embargo against Cuba.
Innospec pleaded guilty to 12-count information involving wire fraud in connection to the Iraqi government, violations of FCPA, and sale of chemicals to Cuban power plants which was a violation of the U.S. embargo against Cuba. Innospec Ltd pleaded guilty to bribing Indonesian officials in March 2010, a case where the British subsidiary was involved in. Innospec pleaded guilty to selling $20million in the form of soluble fuel additives between 2001 and 2004 to Cuban power plants owned by the state. The Trade was unlicensed by the OFAC leading to the violation of the Trading with the Enemy Act.
The case was heard by U.S. District Judge Ellen Segal Huvelle in the Columbia district. David Turner pleaded guilty to three conspiracy counts in the corruption case in the January of 2012 while his counterpart Pau Jennings pleaded to the same number of counts in June and July of 2012. Two others namely Dennis Kerrison and Miltiades Papachristos who were only involved in bribing state officials in Indonesia received one count convictions of conspiracy to corrupt, two years later in June 2014.
Reasons for Bribe
One of the reasons Innospec bribed Iraqi government was to facilitate the shipment of Tetraethyl Lead under the 2004LTPA. Another reason was to ensure that the 2006 Trial Test of MMT failed to allow the second execution of LTPA with Iraq in 2008.
Sentencing
Innospec UK pleaded guilty to the bribe allegations where the named persons involved in bribing Indonesian and Iraq officials were sentenced to imprisonment. Dennis Kerrison was sentenced to four years imprisonment. Paul Jennings was sentenced to serve two years in prison while Miltiades Papachristos was sentenced to one and a half years in prison. David Turner received a different type of sentencing where he was to serve sixteen months in prison and suspended for a whole two years with a total of three hundred unpaid hours of labor.
Appeal
Both Dr. Papachristos and Mr. Kerrison appealed against their convictions and on the 19th of September 2014, the convictions were upheld by the Court of Appeal. Mr. Kerrison received a reduction of his sentence by a year and was hence to serve three years in prison.
Settlement
Global settlement talks have been held since 2008 with a growing concern of Innospec facing millions of US dollars in fines and penalties. A global settlement of 40.2 million U.S. dollars was reached through the collaborated efforts of the Department of Justice, the SEC, the SFO, and the OFAC.
References
Sec.gov. (2010). SEC Complaint: Innospec Inc. Retrieved from https://www.sec.gov/litigation/complaints/2010/comp21454.pdf
