21 January 2011 23:40 [Source: ICIS news]
(adds paragraphs 7-16, 21)
HOUSTON (ICIS)--The US accused a former LyondellBasell employee and two oil traders of defrauding the company out of more than $80m (€59m) in oil-shipping costs, the government said on Friday.
LyondellBasell was not accused of wrongdoing, and it was cooperating with federal investigators, said company spokesman David Harpole.
The former employee, Jonathan Paul Barnes, 55, had become the marine chartering manager for LyondellBasell's Houston Refinery in late 2006 , the government alleged.
From November 2006 through January 2010, Barnes agreed to have LyondellBasell's Houston Refinery pay more than $80m above market prices to ship oil to the complex, according to the government's allegations.
In return, Barnes received millions in kickbacks from the companies that received the inflated payments, the government alleged.
Two of those companies, Camac International and Fossil Energy Resources, were controlled by Clyde Meltzer, 64, and Bernard Langley, 53, the government alleged. Both men were charged as well.
LyondellBasell referred the matter to federal investigators last summer - after an internal audit raised questions about some of the refinery's marine-chartering costs, Harpole said, adding that the costs seemed to deviate from industry norms.
"We took immediate steps to address the matter, including the termination of the employee who was implicated in the activities," he said.
Those alleged activities generated millions in proceeds, the government said.
The government alleged that the money was used to buy a 1957 Cadillac that was once owned by Frank Sinatra. Other purchases included a Mercedes, a Bentley and 13 pieces of high-end jewellery, according to the government.
Other proceeds ended up in several foreign bank accounts, and were used to buy property in Texas and Delray Beach, Florida, the government alleged.
The US already has seized more than a dozen vehicles, a boat, personal watercraft and more than $8m from bank accounts, the government said.
Barnes has been in federal custody since 12 November, when he was arrested on a passport-fraud charge.
Meltzer and Langley were arrested on 9 December.
All three men were charged with conspiracy to commit mail and wire fraud; two substantive counts of wire fraud; conspiracy to commit international money laundering; and four substantive counts of international money laundering, the government said.
In addition, Barnes was charged with passport fraud and bulk cash smuggling, according to the government.
Each count of the fraud and money laundering offenses carries a prison term of up to 20 years, the government said. The passport fraud carries a prison term of up to 10 years and the bulk cash smuggling charge carries a prison term of up to five years.
All of the offenses carry fines of up to $250,000, except for the money laundering offenses, the government said. Those carry a fine of $500,000 or twice the value of the laundered funds, whichever is greater.
A trial is scheduled for 16 May.
($1 = €0.74)
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