On March 18, 2010, Innospec pleaded guilty to violating the anti-bribery and books and records provisions of the FCPA, wire fraud, and conspiracy to commit all three.
The DOJ’s sentencing memorandum notes that Innospec initially denied culpability but has been cooperating with the DOJ since early 2008, including conducting an extensive internal investigation that resulted in the identification of additional improper payments to officials in Indonesia. According to the sentencing memorandum, from 2000 until 2005, Innospec paid bribes to Indonesian government officials to induce the purchase of higher levels of TEL than Indonesia required. The sentencing memorandum notes that this conduct is not charged in the United States because Innospec’s British subsidiary is pleading guilty to it in the United Kingdom. Payments to the Indonesian officials totaled approximately $2,883,507, and from 2000 to 2005 Innospec’s profits from sales to Indonesia were approximately $21,506,610.
Innospec will pay $40.2 million as part of a global settlement with the DOJ, the SEC, the U.K. Serious Fraud Office (“SFO”), and the Office of Foreign Assets Control (“OFAC”). The settlement with OFAC is in connection with the sale of chemicals to Cuban power plants. Innospec agreed to pay a criminal fine of $14.1 million to the DOJ, disgorgement of $11.2 million to the SEC, a criminal fine of $12.7 million to the SFO, and $2.2 million to OFAC. Innospec also agreed to injunctive relief and certain undertakings regarding its FCPA compliance program, including retaining an independent compliance monitor for at least three years.
