Willbros Group Inc. Case 05/14/2008

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Company Name(s): 
Willbros Group
Case Name: 
Willbros Group Inc. Case 05/14/2008
Case Status: 
Lawsuit Filed
Case Status: 
Judgment Issued
Case Status: 
Settlement Proposed
Case Status: 
Settlement Approved
Affected Securities
NYSE: WG
Lawsuit Overview
Type of Lawsuit: 
SEC Action
Date Filed: 
05/14/2008
Date Settled: 
05/14/2008
Settlement Amount: 
$10,365,000
Summary: 

On May 14th 2008 the United States Securities and Exchange Commission (Commission) announced, that the SEC filed on May14th 2008, a settled civil action against Willbros Group, Inc. and several former employees alleging that they violated, among other things, the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and the antifraud provisions of the federal securities laws. The complaint also names Jason Steph, a former supervisory employee in Nigeria, Gerald Jansen, a former administrative supervisor in Nigeria, Lloyd Biggers, a former employee in Nigeria and Carlos Galvez, a former accounting employee in Bolivia. According to the complaint, the company also violated the reporting, books and records and internal controls provisions of the Securities Exchange Act. Willbros Group, Steph, Jansen, Biggers and Galvez have agreed to settle the charges against them, without admitting or denying the Commission’s allegations. The Commission alleges in its complaint that Willbros Group, through the actions of others acting on its behalf, engaged in multiple schemes to bribe foreign officials. First, the complaint alleges that, beginning by at least 2003, Willbros Group, through the conduct of a former executive officer, Steph 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 in order to obtain a significant contract. A similar scheme was used to help obtain a second significant contract. Together, these contracts resulted in net profits of approximately $8,900,000.

In 2005, according to the complaint, Steph assisted in the payment of $850,000 to satisfy a portion of these earlier commitments. The complaint further alleges that Willbros Group, through acts by a former executive officer, Steph, Jansen, Biggers and others, employed a long-running scheme using fabricated invoices to procure cash from the company’s administrative headquarters in Houston to, among other things, bribe Nigerian tax and court officials. This fraudulent cash abuse was also used to fund in part the bribes paid in 2005.

Second, Willbros Group, through the conduct of the same former executive officer and others schemed to pay a $300,000 bribe to officials of an oil and gas company owned by the Ecuador government in order to obtain a $3 million contract.

Finally, Willbros Group, through the actions of the same former executive officer, an outside consultant and Galvez implemented a fraudulent tax avoidance scheme in Bolivia. This fraudulent scheme resulted in material misstatements in Willbros Group’s financial statements…

Willbros Group agreed to consent to the entry of a judgment that permanently enjoins it from future violations of these provisions and that orders it to pay disgorgement of $8.9 million, plus prejudgment interest of $1.4 million.

The Commission further alleges that Steph, through his actions in Nigeria, violated Sections 30A and 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, and aided and abetted violations of Sections 13(b)(2)(A), 13(b)(2)(B) and 30A of the Exchange Act. Steph consented to the entry of a judgment that permanently enjoins him from future violations of these provisions. Pursuant to the judgment, the Court will determine later whether Steph will pay a civil penalty and what the amount of such penalty will be.

Jansen, for his role in Nigeria, is alleged to have violated Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder and to have aided and abetted violations of Sections 13(b)(2)(A), 13(b)(2)(B) and 30A of the Exchange Act. He has consented to the entry of a judgment that permanently enjoins him from future violations of these provisions and orders him to pay a civil penalty of $30,000.

Biggers, based on his actions in Nigeria, is alleged to have violated Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder and to have aided and abetted violations of Sections 13(b)(2)(A) and 30A of the Exchange Act. He has consented to the entry of a judgment that permanently enjoins him from future violations of these provisions.

Finally, the Commission alleges that Galvez, through his conduct in Bolivia, violated Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder and aided and abetted violations of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder. Galvez has agreed to consent to the entry of a judgment that permanently enjoins him from future violations of these provisions and orders him to pay a civil penalty of $35,000.

In a related criminal proceeding, the United States Department of Justice filed a criminal Information and Deferred Prosecution Agreement in the Southern District of Texas relating to the criminal FCPA charges against Willbros Group and its subsidiary, Willbros International, Inc. (”Willbros International”). In that case, Willbros Group and Willbros International accepted responsibility for its employees that had violated the FCPA and agreed to pay a criminal penalty of $22 million. Pursuant to the Deferred Prosecution Agreement, the Department of Justice agreed to defer prosecution of these companies for three years and the companies agreed to retain for a period of three years an independent compliance monitor to assess the company’s implementation of and compliance with new internal policies and procedures. If Willbros Group and Willbros International abide by the terms of the agreement, the Department will dismiss the Information when the term of the agreement ends.