Case Detail

United States v. Flowserve Corp. (D.D.C. 2008)?
United States v. Flowserve Pompes SAS (D.D.C. 2008)


Case Details

  • Case Name
  • United States v. Flowserve Corp. (D.D.C. 2008)?
    United States v. Flowserve Pompes SAS (D.D.C. 2008)
  • Date Filed
  • 05/14/2008
  • Enforcement Agency
  • DOJ
  • Countries
  • Iraq
  • Foreign Official
  • None
  • Date of Conduct
  • 2001 to 2003
  • Nature of Business
  • Sale of pumps and other oil refinery equipment to Iraq under the U.N. Oil-for-Food Program.
  • Influence to be Obtained
  • In April 1995, the U.N. adopted Security Council Resolution 986, which permitted the government of Iraq to sell oil and to use proceeds from those sales to purchase humanitarian supplies such as food for the Iraqi people (“U.N. Oil-for-Food Program”).  In an extensive scheme, the Iraqi government received illicit payments in the form of surcharges from oil purchasers and kickbacks, often termed “after sales service fees,” from humanitarian goods suppliers.  The kickback payments were masked by inflating the contract price, usually by 10% of the contract value.
    Flowserve Corporation (“Flowserve”), an American corporation, was involved in the U.N. Oil-for-Food Program through two of its foreign subsidiaries including Flowserve Pompes SAS, a French subsidiary.  Between 2001 and 2003, Flowserve Pompes entered into nineteen contracts in connection to which kickback payments to the Iraqi government were either made or authorized.  Flowserve Pompes offered to pay a total of $778,409 in payments, of which approximately $604,651 was in fact paid to the Iraqi government through a Jordanian agent pursuant to side agreements for nonexistent after-sales services.
    The government did not allege bribery of any individual foreign governmental officials.
     
  • Enforcement
  • On February 21, 2008, Flowserve entered into a three-year deferred prosecution agreement with the DOJ under which Flowserve acknowledged responsibility for its subsidiary Flowserve Pompes SAS’s actions.  Flowserve agreed to pay a penalty of $4,000,000.
    On the same day, the DOJ filed a criminal information against Flowserve Pompes SAS, charging the company with conspiring to commit wire fraud and violate the FCPA’s books-and-records provisions.
  • Amount of the Value
  •  $778,409 in paid or authorized kickbacks to the Iraqi government.
  • Amount of Business Related to Payment
  • €7,435,381.
  • Intermediary
  • Jordanian Agent.
  • Total Sanction
  • $ 4,000,000
  • Compliance Monitor
  • Yes
  • Reporting Requirements
  • No
  • Case is Pending?
  • No
  • Total Combined Monetary Sanction
  • $ 10,574,225

Defendants

Flowserve Corp. 

  • Citation
  • United States v. Flowserve Corp., No. 1:08-00035 (D.D.C. 2008); 
  • Date Filed
  • 05/14/2008
  • Filed Under Seal
  • No
  • Other Statutory Provision
  • None
  • Disposition
  • Deferred Prosecution Agreement
  • Defendant Jurisdictional Basis
  • Issuer
  • Defendant's Citizenship
  • United States

Flowserve Pompes SAS 

  • Citation
  • United States v. Flowserve Pompes SAS, No. 1:08-cr-00035 (D.D.C. 2008).
  • Date Filed
  • 05/14/2008
  • Filed Under Seal
  • No
  • FCPA Statutory Provision
    • Conspiracy: Books-and-Records
  • Other Statutory Provision
  • Conspiracy (Wire Fraud).
  • Disposition
  • Deferred Prosecution Agreement
  • Defendant Jurisdictional Basis
  • Conspiracy, Agent of Issuer
  • Defendant's Citizenship
  • France
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