(Updates with details of allegations in third paragraph.)
Oct. 20 (Bloomberg) -- Two oil traders pleaded guilty to paying more than $20 million in kickbacks to a former LyondellBasell Industries NV executive who scheduled oil shipments for the company’s Houston refinery.
Traders Bernard Langley, 54, of the U.K., and Clyde Meltzer, 65, of Houston and Livingston, New Jersey, said in federal court in Houston that they paid the kickbacks to LyondellBasell’s Jonathan Barnes, according to a statement by the U.S. attorney’s office. Barnes agreed to pay above-market shipping rates to tanker companies controlled by the two traders to transport Venezuelan crude oil to Houston, in exchange for one-third of the profits the traders received, prosecutors said.
“From 2007 through late 2009, when new management at Lyondell discovered the overcharges, Langley and Meltzer used Swiss bank accounts to pay Barnes more than $20 million in kickbacks,’’ Houston U.S. Attorney Kenneth Magidson said in the statement.
Langley and Meltzer agreed to forfeit more than $20 million in assets, including cash from bank accounts in Switzerland and Monoco, luxury and classic cars, jewelry, real estate in Texas and Florida, and their investment in a Houston sports bar, according to Magidson.
Langley and Meltzer could be sentenced to as much as 20 years in prison and ordered to pay restitution of as much as $57 million when they are sentenced in January, according to Magidson’s statement. The two men have been in federal custody since December, when both were arrested in Houston after a recorded meeting with Barnes.
Barnes Pleaded Guilty
Barnes was indicted in November of last year and has been cooperating with prosecutors. He pleaded guilty to his role in the scheme in March, according to court records.
“We found a problem, we reported it, and we worked closely with the U.S. attorney’s office in Houston to identify what had happened,” David Harpole, a spokesman for Rotterdam-based LyondellBasell, said in a phone interview today. He said the company discovered the kickbacks when an internal audit “raised questions about certain marine charter payments that were outside the norms.’’
The case is U.S. v. Barnes, H-10-787-S, U.S. District Court, Southern District of Texas (Houston).
--Editors: Peter Blumberg, Steve Farr
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