A federal judge in Washington today sentenced a Canadian national in a foreign corruption case to 30 months in prison, rejecting the Justice Department request for an incarceration term of more than seven years.
Prosecutors said Ousama Naaman, 62, an agent for the chemical company Innospec Inc., pleaded guilty in U.S. District Court for the District of Columbia. He was arrested in Germany in 2009 and extradited to the United States to face charges here.
Justice Department lawyers said Naaman paid kickbacks to the Iraqi government in exchange for contracts under the United Nations Oil for Food Program. He was also accused of paying some $167,000 in bribes to members of the Iraqi Ministry of Oil.
Innospec pleaded guilty in Washington in March 2010 for the bribery and kickback scheme. Justice Department prosecutors said the company was liable for kickbacks paid to the former Iraqi government under the U.N. oil for food program.
The company’s former chief executive officer, Paul Jennings, and a managing director, David Turner, are charged in the United Kingdom. The corruption cases against them are pending. DOJ lawyers said Jennings and Turner are expected to plead guilty.
Naaman, represented by Chadbourne & Park partner Abbe Lowell, apologized in court today before Judge Ellen Segal Huvelle issued her sentence. Naaman said he deeply regretted his action and that he is a changed man.
“The message to be sent by my case has been sent,” Naaman said.
Huvelle spent the bulk of today’s hearing discussing with the lawyers the scope of the Justice Department’s stepped up enforcement of individuals under the Foreign Corrupt Practices Act of 1977, which proscribed penalties for certain payments made to foreign officials. The judge examined at length prison sentences handed out in FCPA cases in recent years.
Nathaniel Edmonds, a Justice Department fraud prosecutor, said the Naaman prosecution was part of the first wave of the DOJ push to hold more individuals accountable for FCPA violations. Huvelle questioned why the Justice Department did not bring charges in Washington against Innospec officials.
The prosecutor urged Huvelle to sentence Naaman to 90 months in prison, a sentence that Edmonds said other judges would look at for guidance in subsequent cases involving foreign nationals who are agents for, not executives of, corporations.
Edmonds said there should be no leniency provided to non-U.S. resident agents who are charged in FCPA cases. Carving out an exception for them through less-than-severe prison sentences, he said, would send a “tremendously bad message.”
Naaman’s guideline sentence was 12 years. But the government agreed to cut him a break and recommend, instead, 90 months for his cooperation. Prosecutors later discounted the value of the cooperation, saying that Naaman had provided false statements to investigators.
Lowell, addressing the judge, questioned what message the Justice Department was trying to send in seeking to put away Naaman for more than seven years. He jokingly talked about a "sticky" multiplication button on the calculator in the Justice Department fraud section.
“In this holiday season, I’m thinking about buying them a new one,” Lowell said in court.
Lowell disputed the government’s contention the Naaman case will have precedential value, saying that criminal prosecutions involve unique circumstances.
Huvelle said she did not agree with the Justice Department about the deterrent effect of a 90-month prison sentence. The judge said the 30-month term is “sufficient but not unnecessarily punitive.”
Naaman is hopeful he can serve his prison term at a facility in Canada for which he will pay. Naaman must also pay a $250,000 fine, Huvelle said.