Corruption


CEO Jailed for Fraud

The owner and chief executive officer of an armored vehicle company was sentenced today to 70 months in prison for his role in orchestrating a scheme to defraud the United States by providing the U.S. Department of Defense with armored gun trucks that did not meet ballistic and blast protection requirements set out in the company’s contracts with the United States.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Rick A. Mountcastle of the Western District of Virginia, Special Agent in Charge Adam S. Lee of the FBI’s Richmond, Virginia, Field Office and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office made the announcement.

William Whyte, 72, of King City, Ontario, the owner and CEO of Armet Armored Vehicles of Danville, Virginia, was sentenced by U.S. District Judge Jackson L. Kiser of the Western District of Virginia, who also ordered Whyte to serve three years of supervised release following his prison sentence and to pay restitution in the amount of $2,019,454.36.

On Oct. 9, 2017, after a two-week trial, Whyte was found guilty of three counts of major fraud against the United States, three counts of wire fraud and three counts of criminal false claims.  Whyte was charged by an indictment in July 2012.

Evidence at trial demonstrated that Whyte executed a scheme to defraud the United States by providing armored gun trucks that were deliberately under-armored.  Armet contracted to provide armored gun trucks for use by the United States and its allies as part of the efforts to rebuild Iraq in 2005.

Despite providing armored gun trucks that did not meet contractual specifications, Whyte and his employees represented that the armored gun trucks were adequately armored in accordance with the contract, the evidence showed.  Armet was paid over $2 million over the course of the scheme, the evidence showed.

The case was investigated by the FBI and DCIS.  The case is being prosecuted by Trial Attorney Caitlin Cottingham of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Heather Carlton of the Western District of Virginia.

(Source: US Dept of Justice)

Abadi says Laws will Protect Foreign Investors

By John Lee.

Prime Minister Haider al-Abadi has promised to crack down on corruption, and says laws will protect nervous foreign investors.

He told CNBC:

We are laying down all the legal framework … I think the worry is corruption, number one, which is hiding behind red tape and bureaucracy. We have established a higher committee which is headed by the prime minister and it has a follow up team to make sure to remove blocks as they are there because of the bureaucracy.

“I think this will be a huge bonus for companies; sometimes they are pressed to pay bribes or something like that. We want to keep away from this, we want every dollar which goes into investment or donation to serve the people, not to go to the pockets of corrupt people.

Appearing confident despite the challenges ahead, he added:

“I think now that the process of engaging investors in Iraq, I am sure in the next few months will be the foundation of this. We’ve already appointed a committee. Next month is going to be a meeting with major investors to follow up … And I hope that after the election they’ll immediately start.”

See the full CNBC interview here.

(Source: CNBC)

Ex-Minister sentenced to 21 years for “Corruption”

An Iraqi court on February 12 sentenced former trade minister Abdul Falah al-Sudani to 21 years in prison on corruption charges.

Sudani was involved in a corruption scandal connected to the country’s massive food rations programme.

He was given three sentences, two for “negligence” with a 14-year jail term and a third for “misconduct” with a seven-year term, according to Iraqi Shafaq News.

Sudani, who belongs to the ruling Dawa Party, served as minister of trade from 2006 to 2009.

He was sacked and slapped with criminal charges in 2009. Released on bail, Sudani was then arrested as he tried to flee the country, but he managed to flee again.

The former trade minister was extradited from Lebanon and taken into Iraqi custody on 25 January.

Prime Minister Haidar al-Abadi has earlier vowed to fight corruption, saying it is the second war the country has to fight following its victory over IS.

(Source: GardaWorld)

Corruption Probes: Iraq takes Custody of Officials

By Adnan Abu Zeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

Iraq is boosting its efforts to extradite fugitives wanted in corruption cases.

On Jan. 25, Iraqi authorities in cooperation with Interpol took custody of former Trade Minister Abdel Falah al-Sudani, who had been extradited from Lebanon. Sudani, a fugitive since 2009, had been tried and sentenced in absentia to seven years in prison for corruption.

Ziad al-Qattan, the former general secretary in the Ministry of Defense, was extradited from Jordan and handed over to Iraqi authorities Jan. 11.​ Qattan is accused of embezzling about $1 billion from the ministry.

“Such steps toward trying accused [politicians] in a country that is at the top of the list of the most corrupt countries, such as Iraq, are of paramount importance to regain the people’s confidence in the Iraqi judiciary and its ability to tackle corruption,” legal expert Ali Jaber told Al-Monitor.

“The extradition of wanted people is twofold. The procedure goes through the bilateral agreement between Iraq and other countries and through the international police [Interpol],” he said.

The UN Charter allows countries fighting terrorist groups to ask for assistance from the Security Council, which is the case with Iraq. These countries can also claim funds that had been smuggled abroad.

“Many countries have been helping Iraq to recover funds and take fugitives into custody,” Jaber said. “I believe that Iraq will witness many breakthroughs in the future at this level, especially since the Iraqi government said tackling corruption will be its top priority after the end of the war on the Islamic State.”

In early January, a representative of the Japan International Cooperation Agency met in Iraq with Integrity Commission Chairman Hassan al-Yasiri to discuss, among other topics, coordinating anti-corruption efforts.

The Integrity Commission said Iraq, with Interpol’s help, recovered about 2 billion Iraqi dinars ($1.68 million) in December from nine convicted fugitives by tracking their money and conducting investigations to follow financial transactions globally.

Many officials accused of corruption remain free, however. Some have dual nationality, which makes it easier for them to leave. For example, Basra Gov. Majid al-Nasrawi used his Australian passport to flee Iraq in August. He faces charges of stealing public money.

There are also warrants out for the arrests of fugitive officials wanted on corruption charges, including former Minister of Electricity Ayham al-Samarrai, former Transport Minister Louay al-Ors and former Defense Minister Hazim Shaalan, who was accused in 2005 of being involved in the theft of at least $1.3 billion from the ministry.

Judge Abdul-Sattar al-Birqdar, a spokesman for Iraq’s Supreme Judicial Council in Baghdad, explained extradition procedures to Al-Monitor. “The Supreme Judicial Council issues warrants for the recovery of smuggled funds. The Extradition Division in the public prosecutor’s office follows up on the matter. The prosecutor then issues the necessary decisions,” which could entail property confiscation.

Legal expert Tariq Harb told Al-Monitor, “The current process in Iraq is that the authorities hand over the official documents of charges of the accused to Interpol. In the event Interpol catches the accused, the Iraqi security authorities will take them into custody to stand a fair trial.”

Iraq’s increased efforts to recover assets from abroad will help speed up the often lengthy process of extradition. However, “this doesn’t mean this road won’t be fraught with many obstacles, as many of the accused are linked to powerful politicians who could pull some strings to derail or end the procedures.” Some countries might also use prisoners as bargaining chips, he said.

Ahmad al-Jubouri, a member of the parliamentary Legal Committee, told Al-Monitor, “The process to recover funds and arrest [those accused] is of major importance, as the Iraqi people have been demanding reforms and the fight against corruption. Under this pressure, the Iraqi government has started to take serious steps” and has even hired foreign companies to help track funds and facilitate extradition. “The upcoming period will witness major changes in corruption investigations,” he said.

He added, “The arrest of Sudani and Qattan will open the door to further arrests of the people who misused and smuggled public funds to neighboring countries. Some of the accused are traders and businessmen who made illicit deals in the name of influential politicians or political parties. Iraq is known for the rampant corruption among politicians. The arrests will include all those who took part in or facilitated embezzlement of public funds. This will be a crucial step in recovering these funds.”

Lawyers get Death Threats but Won’t go to Police

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Narim Rostam.

For lawyers working on sensitive cases, especially corruption cases, in Iraqi Kurdistan, death and other threats are just part of the job.

On New Year’s Eve in the district of Bakhtiari, in Iraqi Kurdistan, there was gunfire at local lawyer Omar Tawfik’s house. But this hail of bullets was not celebratory. Tawfik believes he was targeted by unknown assailants and blames those who previously threatened him.

Tawfik received these threats because he was involved in a complex court case, that started in 2012 but has yet to be resolved, around corruption involving land sales and senior politicians and administrators. The case saw the arrest of the then-mayor of Sulaymaniyah, Zana Hama Salih, who died in mysterious circumstances while in custody.

Tawfik says he knew he would be threatened as a result of this case – even though he hasn’t been able to make much difference, he says.

The fact that those working in the legal profession are threatened is nothing new in Iraqi Kurdistan. However recently the frequency of the threats and attacks seems to have increased.

Last year, many local lawyers said at one time or another, that they were threatened. But not many of them want to chase those who harass them nor do they like disclosing the details of the threats. This is a worldwide phenomenon – lawyers are often threatened but they don’t often report the threats to the police.

In fact, details released by the Kurdistan Bar Association say that out of their 9,000 or so members, only 7 were threatened last year.

Engaging NGOs in the Fight Against Corruption

Commission of Integrity launches campaign to engage non-governmental organizations in the fight against corruption

Iraq’s Commission of Integrity (CoI) has launched a national campaign to promote a broader engagement of non-governmental organizations (NGOs) and civil society in the fight against corruption.

Under the leadership of the office of the Prime Minister of Iraq and through the Funding Facility for Economic Reform (FFER-Federal) project, the United Nations Development Programme (UNDP) is supporting Iraq’s efforts to implment the refrom agenda introduced by Prime Minister Haider Al-Abadi in late 2015.

During a ceremony in Baghdad, the Head of the CoI, Mr. Hassan Al-Yassery, said:

“Only by working together we can reinforce our efforts to end corruption. The six-month campaign that we are launching today will help us to mobilize civil society and improve coordination with NGOs to promote transparency, integrity and accountability for a better Iraq.”

The Director General of Relations with NGOs Office at the CoI, Mr. Mahmod Al-Jboree, added:

“Nearly 300 Iraqi NGOs are participating in this campaign, in addition to academic institutions. By engaging this large number of NGOs from different governorates, we are expecting to raise awareness of 3 to 4 million Iraqis.”

UNDP Adviser on Anti-Corruption, Mr. Anwar Ben Khelifa, said:

“This campaign is one important step in deepening the culture of integrity and leveraging the role of civil society as a key actor in flighting corruption. Through FFER-Federal, we will continue to support initiatives that help Iraq move towards good governance.”

UNDP’s FFER-Federal has already channeled high-caliber international expertise to support top priority reform initiatives. This includes assistance to corruption eradication activities, maximizing of non-oil revenue collection, and support to the Government to meet economic reform commitments and fiscal adjustment made under the loan agreements with international lending institutions.

(Source: UNDP)

No Winners In Iraq’s New ‘War On Corruption’

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Every day new anti-corruption cases are announced in Iraq’s new “war on corruption”. Yet they achieve virtually nothing. This may well be a war that nobody in Iraq can win.

Last week the Iraqi prime minister, Haidar al-Abadi, said that now that the war against the extremist group known as the Islamic State had been won, that a new war should be fought – and this one would be against corruption.

Last year the advocacy organisation Transparency International says that Iraq was the 166th most corrupt country in the world out of 176. And corruption of all kinds has been a problem in the country for decades. It’s almost a way of life here. So this will be far from an easy fight. In fact, it may prove to be more difficult than the fight against the Islamic State group.

Iraqi politics functions according to a kind of unofficial sectarian quota system that was established after the 2003 US-led invasion of Iraq that toppled Saddam Hussein’s regime.  In order to avoid sectarian infighting among politicians, US administrators thought it best to split the most important positions in Iraq’s new Parliament between the three major ethnic and sectarian groups in the country; that is, the Sunni Muslims, Shiite Muslims and Iraqi Kurdish.

Over time though, many analysts believe this practice has come to hamper Iraqi democracy, with leaders being picked for their sect or ethnicity, rather than on merit.

And the system is far more problematic than that. In reality, it is based on two further principles: How much power each appointment gives to the person who gets the job, and therefore how much money the appointment can generate.

Every party in the Iraqi government today also has what is known as an “economics office”, a bureau tasked with raising funds for the political party using the government jobs held by the members themselves. According to insiders, who cannot be named for security reasons, these offices coordinate making deals and signing contracts behind the scenes so that investments and kickbacks are shared with the political party itself.

Former Iraqi Subcontractor Guilty in Kickbacks Conspiracy

A federal jury convicted a Romanian citizen for his role in a government contract kickback scheme that caused a loss of more than $3.4 million to the U.S. Department of State.

According to court records and evidence presented at trial, Emil Popsecu, 49, conspired to violate the Anti-Kickback Act related to the lease of real property in Iraq in 2011.

According to evidence adduced and presented at trial, a United States government contractor headquartered in Virginia and performing services for the U.S. Department of State in Iraq in 2011, was searching for real property to lease. A conspiracy formed between Wesley Aaron Struble, 49, a United States citizen living in Batangas, Phillipines, and Joes Rivera, 60, of Potomac, Maryland, both of whom were working as government contractors in Iraq.

Struble and Rivera approached an Iraqi company and its associates and agreed to accept kickbacks in exchange for help in causing the U.S. State Department contractor to lease property that the Iraqi company controlled.

Emil Popescu was late recruited to the conspiracy and asked to open a bank account in Baghdad, Iraq. After a lease was signed between the U.S. State Department contractor and the Iraqi company, Popescu withdrew cash from the bank account and made kickback payments directly to Struble and Rivera. Popescu also facilitated other kickback payments by withdrawing money from the bank account and giving it to the Iraqi company knowing that kickback payments were owed to Struble and Rivera.

Prior to trial, Struble and Rivera each pleaded guilty to the same conspiracy and were sentenced to four years and three years in prison, respectively.

Popescu faces a maximum penalty of five years in prison when sentenced on Feb. 23, 2018. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Steve A. Linick, the Inspector General for the U.S. Department of State, and Andrew W. Vale, Assistant Director of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Leonie M. Brinkema accepted the verdict. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Kimberly R. Pedersen prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-cr-44 and 1:17-cr-052.

(Source: US Dept of Justice)

Two more charged in UK’s Unaoil Investigation

The UK’s Serious Fraud Office (SFO) has charged two further individuals in relation to the Unaoil investigation.

Paul Bond and Stephen Whiteley have both been charged with conspiracy to make corrupt payments to secure the award of contracts in Iraq to Unaoil’s client SBM Offshore.

The charges relate to alleged corrupt conduct within Unaoil, between June 2005 and August 2011.

  • Paul Bond has been charged with two offences of conspiracy to make corrupt payments, contrary to section (1) of the Criminal Law Act 1977 and contrary to section 1 of the Prevention of Corruption Act 1906.
  • Stephen Whiteley has been charged with one offence of conspiracy to make corrupt payments, contrary to section (1) of the Criminal Law Act 1977 and contrary to section 1 of the Prevention of Corruption Act 1906.

Paul Bond and Stephen Whiteley will appear before Westminster Magistrates’ Court at 10am on Thursday 7th December.

The investigation is ongoing.

(Source: UK SFO)

Abadi Promises War on Corruption

Iraqi Prime Minister Haider al-Abadi has warned “the corrupt ones against playing with fire” as he pledged to fight corruption in state institutions, saying “the coming war will be against the corrupt ones.

In his weekly press conference, Abadi stressed the need for “a comprehensive economic reform in both public and private sectors.

The corrupt ones tried to set fire to Iraq and distract it from the war on Daesh,” he said.  “I promise all Iraqi that we will triumph over corruption as we did with Daesh,” he added.

He also urged the young people in Iraq to cooperate with the authorities to uncover corruption.

(Source: GardaWorld)