Two former chief executive officers of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – have been charged for their alleged participation in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA), to defraud PetroTiger, and to launder proceeds of those crimes.
PetroTiger’s former general counsel pled guilty to bribery and fraud charges in connection with the same scheme.
Federal officials alleged that former co-CEOs of PetroTiger Joseph Sigelman, 42, formerly of Miami and the Philippines, and Knut Hammarskjold, 42, of Greenville, S.C.; former general counsel Gregory Weisman, 42, of Moorestown, N.J., 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.
Hammarskjold was arrested November 20, 2013, at Newark Liberty International Airport.
Sigelman was arrested on Jan. 3, 2014, in the Philippines and appeared this afternoon (ChST) in Guam before U.S. Magistrate Judge Joaquin V.E. Manibusan III.
Sigelman will have an initial appearance in New Jersey federal court on a date to be determined.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on November 8, 2013, with conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money and substantive violations of the FCPA.
Weisman pleaded guilty on Nov. 8, 2013, to a criminal information charging one count of conspiracy to violate the FCPA and to commit wire fraud.
The charges allege the defendants made three separate payments from PetroTiger’s bank account in the United States to the official’s bank account in Colombia to secure approval from Colombia’s state-owned and state-controlled oil company for a lucrative oil services contract in the country.
Federal officials alleged that to conceal the bribes, the defendants 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 charges allege that Sigelman and Hammarskjold provided Weisman invoices including her bank account information. The defendants made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.
Federal officials alleged that the defendants attempted to secure kickback payments at the expense of PetroTiger’s board members and that defendants were 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 a higher purchase price for the acquisition, two of the owners of the target company agreed to kick back to the defendants a portion of the increased purchase price. According to the charges, to conceal the kickback payments, the defendants 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.