SEC v. Willbros Group, Inc., Jason Steph, Gerald Jansen, Lloyd Biggers, Carlos Galvez (S.D. Tex. 2008)
Case Details
- Case Name
- SEC v. Willbros Group, Inc., Jason Steph, Gerald Jansen, Lloyd Biggers, Carlos Galvez (S.D. Tex. 2008)
- Countries
- Nigeria, Ecuador, Bolivia
- Foreign Official
- Nigerian National Petroleum Corporation (“NNPC”) officials; Officials of NNPC’s wholly owned subsidiary National Petroleum Investment Management Services (“NAPIMS”); Officials of NNPC’s majority-owned joint venture operator, Shell Petroleum Development Company of Nigeria (“SPDC”); Senior officials in the executive branch of the Nigerian federal government and political parties in Nigeria; Officials of PetroEcuador and PetroComerical in Ecuador.
- Date of Conduct
-
2003 to 2005
- Nature of Business
- Willbros International Inc. (“Willbros International”) is a Panamanian wholly owned subsidiary of Willbros Group, Inc. (“Willbros Group”), which is also a Panamanian corporation and engages in procurement of contracts for oil and gas construction projects.
Jason Steph, Lloyd Biggers, and Carlos Galvez are all U.S. citizens who formerly worked for Willbros International. Steph was the General Manager-Onshore in Nigeria for Willbros International for the relevant time period. Biggers was also assigned to Nigeria, and Galvez was employed in Bolivia. Gerald Jansen, a Canadian citizen, worked for Willbros International in Nigeria.
- Influence to be Obtained
- The SEC alleged that Willbros Group, through the actions of others acting on its behalf, engaged in multiple schemes to bribe foreign officials. The complaint alleges that, beginning by at least 2003, Willbros Group, via Willbros International and through the conduct of a former executive officer of Willbros International, Steph as General Manager – Onshore in Nigeria, and others, engaged in a scheme to pay over $6 million in bribes to Nigerian government officials and to employees of an operator of a joint venture majority‑owned by the Nigerian government to obtain significant contracts for construction of a natural gas pipeline. As part of this scheme, the SEC alleged that, in 2005, after Willbros began an internal investigation into allegations of corruption, Steph assisted in the payment of $1.85 million, mostly in cash, to satisfy a portion of these earlier commitments. It is alleged that consultants were also used to help obtain offshore oil platform repair projects for which Willbros promised Nigerian officials over $5 million in bribes. The SEC alleged that these contracts resulted in cumulative revenue for Willbros Group of approximately $487 million and net profits of approximately $8.9 million.
In addition to Steph, the SEC alleged that Jansen was responsible for submitting consultants’ invoices for payment to Willbros Group headquarters in Houston, Texas. The complaint further alleged that Willbros Group, through acts by a former executive officer, Steph, Jansen, Biggers, and others, employed a long‑running scheme of using fabricated invoices to procure cash from the company’s administrative headquarters in Houston to, among other things, bribe Nigerian tax and court officials, and also to fund, in part, the bribes paid in 2005.
The SEC also alleged that Willbros International, in a scheme orchestrated by its former President, paid officials of state‑owned PetroEcuador and its subsidiary PetroComercial to obtain contracts in Ecuador which generated revenues of approximately $3.4 million.
The SEC alleged that Willbros Group recorded all of the above payments as contract costs for legitimate consulting services or vendor goods and services.
The SEC also alleged that a subsidiary of Willbros International devised a scheme to buy false invoices through a consultant to fraudulently claim VAT tax credits to reduce tax liability, in violation of books and records requirements. The SEC alleged that Galvez, in his role as an accounting and administrative supervisor in Bolivia, used the fictitious invoices to further the scheme by, among other things, preparing false returns and related records. For these alleged acts, the SEC charged Willbros Group and Galvez for violation of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934.
- Enforcement
- On May 14, 2008 the SEC filed a settled complaint against Willbros Group, Steph, Jansen, Biggers, and Galvez. The SEC alleged that Willbros Group violated the anti‑bribery provisions of the FCPA and the anti‑fraud, books and records, internal controls, and reporting provisions of the federal securities laws. The SEC alleged that Steph violated the bribery provisions of the FCPA and aided and abetted violations of the FCPA and books and records and internal control provisions of the federal securities laws. The SEC alleged that Jansen aided and abetted violations of the FCPA and books and records and internal control provisions of the federal securities laws. The SEC alleged that Biggers aided and abetted violations of the FCPA and the books and records provisions of the federal securities laws. The SEC alleged that Galvez illegally falsified books and records and aided and abetted violations of the anti‑fraud, books and records, internal controls, and reporting provisions of the federal securities laws.
Willbros Group did not admit or deny the Commission’s allegations, but agreed to disgorge $8.9 million in profits and pay $1.4 million in prejudgment interest. The court ordered Willbros Group to pay the $10.3 million in installments of $2.575 million within 10 days of the entry of final judgment, and three $2.575 million payments with post‑judgment interest annually for three years from entry of the final judgment. Jansen consented to an entry of judgment and did not admit or deny the Commission’s allegations. He received a $30,000 penalty. Biggers consented to an entry of judgment and did not admit or deny the Commission’s allegations. He received no penalty. Galvez consented to an entry of judgment and did not admit or deny the Commission’s allegations. He received a $35,000 penalty. All consented to being permanently enjoined from future violation of the provisions alleged. Final judgment with respect to Willbros Group, Jansen, Biggers, and Galvez was entered on May 14, 2008, as was an interlocutory judgment against Steph effecting an injunction against any future violation. The court stayed determination of his penalty, if any, pending resolution of the criminal matter against him. On January 28, 2010, Steph was sentenced in the criminal matter to 15 months of imprisonment.
In a related action, Willbros Group and Willbros International entered into a three‑year deferred prosecution agreement with the DOJ, pursuant to which they agreed, jointly and severally, to a fine of $22 million
- Amount of the Value
- Approximately $11.7 million.
- Amount of Business Related to Payment
- More than $490 million.
- Intermediary
- Consultants; Joint-venture.
- Citizenship of Parent Entity
- Panama
- Total Sanction
- $ 10,300,000
- Reporting Requirements
- No
- Total Combined Monetary Sanction
- $ 32,300,000
Defendants
Willbros Group, Inc.
- Citation
- SEC v. Willbros Grp, Inc. et al., No. 8-cv-1494 (S.D. Tex. 2008).
- Other Statutory Provision
- Circumventing Internal Controls/Falsifying Books and Records;
- Disposition
- Complaint and Consent Order
- Defendant Jurisdictional Basis
- Issuer
- Defendant's Citizenship
- Panama
- Individual Sanction
- $10.3 million.
Jason Steph
- Citation
- SEC v. Willbros Grp, Inc. et al., No. 8-cv-1494 (S.D. Tex. 2008).
- FCPA Statutory Provision
-
- Aiding and Abetting: Anti-Bribery
- Aiding and Abetting: Books-and-Records
- Aiding and Abetting: Internal Controls
- Other Statutory Provision
- Circumventing Internal Controls/Falsifying Books and Records.
- Disposition
- Complaint and Consent Order
- Defendant Jurisdictional Basis
- Agent of Issuer
- Defendant's Citizenship
- United States
Gerald Jansen
- Citation
- SEC v. Willbros Grp, Inc. et al., No. 8-cv-1494 (S.D. Tex. 2008).
- FCPA Statutory Provision
-
- Aiding and Abetting: Anti-Bribery
- Aiding and Abetting: Books-and-Records
- Aiding and Abetting: Internal Controls
- Other Statutory Provision
- Circumventing Internal Controls/Falsifying Books and Records.
- Disposition
- Complaint and Consent Order
- Defendant Jurisdictional Basis
- Agent of Issuer
- Defendant's Citizenship
- Canada
- Individual Sanction
- $30,000.
Lloyd Biggers
- Citation
- SEC v. Willbros Grp, Inc. et al., No. 8-cv-1494 (S.D. Tex. 2008).
- FCPA Statutory Provision
-
- Aiding and Abetting: Anti-Bribery
- Aiding and Abetting: Books-and-Records
- Other Statutory Provision
- Circumventing Internal Controls/Falsifying Books and Records.
- Disposition
- Complaint and Consent Order
- Defendant Jurisdictional Basis
- Agent of Issuer
- Defendant's Citizenship
- United States
Carlos Galvez
- Citation
- SEC v. Willbros Grp, Inc. et al., No. 8-cv-1494 (S.D. Tex. 2008).
- FCPA Statutory Provision
-
- Aiding and Abetting: Books-and-Records
- Aiding and Abetting: Internal Controls
- Other Statutory Provision
- Circumventing Internal Controls/Falsifying Books and Records.
- Disposition
- Complaint and Consent Order
- Defendant Jurisdictional Basis
- Agent of Issuer
- Individual Sanction
- $35,000.
