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Three indicted for giving sadam kickbacks { April 14 2005 } Original Source Link: (May no longer be active)
http://www.nynewsday.com/news/local/crime/nyc-oil0415,0,4680650.story?coll=nyc-homepage-breaking2http://www.nynewsday.com/news/local/crime/nyc-oil0415,0,4680650.story?coll=nyc-homepage-breaking2
Three indicted in U.N. oil-for-food scandal
The Associated Press
April 14, 2005, 12:48 PM EDT
A Texas oil company owner and two oil traders from Houston and England paid millions of dollars in secret kickbacks to Saddam Hussein's Iraqi regime, cheating the United Nations' oil-for-food program of humanitarian aid funds, authorities said Thursday.
David B. Chalmers, owner of Bayoil (USA) Inc., and Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, were arrested Thursday at their Houston homes. U.S. Attorney David N. Kelley said he will seek the extradition from England of a third defendant, John Irving.
Kelley called two indictments unsealed in U.S. District Court in Manhattan "two more pieces in the oil-for-food puzzle."
He added: "It's a broad and large investigation. ... We're going to wring the towel dry." In one indictment, the defendants were accused of paying millions of dollars in kickbacks so that Chalmers' oil companies -- the Houston-based Bayoil and Bayoil Supply & Trading Limited, based in Nassau, Bahamas -- could continue to sell Iraqi oil under the oil-for-food program.
The kickbacks between mid-2000 and March 2003 involved funds otherwise intended for humanitarian relief, Kelley said. Kelley called $100 million "a conservative estimate" of the amount of oil that went through the defendants.
A criminal complaint, also unsealed Thursday in Manhattan, charged Tongsun Park, a South Korean citizen, with conspiracy to act in the United States as an unregistered government agent for the Iraqi government's effort to create the oil-for-food program.
If convicted of the charges, Chalmers, Irving and Dionissiev each could face a maximum of 62 years in prison and a maximum fine of $1 million while Park could face up to five years in prison. The defendants could also be forced to make restitution.
According to the indictment, the government also seeks the forfeiture of at least $100 million in assets from the defendants.
Lawyers for the defendants could not immediately be identified to obtain comment.
On Jan. 18, an Iraqi-born American businessman accused of skimming money from the oil-for-food program pleaded guilty in New York to being an illegal agent of Saddam Hussein's government.
Samir A. Vincent, 64, a naturalized U.S. citizen from Annandale, Va., was the first person to be charged in the Justice Department's investigation of the program.
Former U.S. Federal Reserve Chairman Paul Volcker and other leaders of his independent probe into alleged oil-for-food corruption said recently that the United States and other countries have refused to fully cooperate with their investigators, blocking access to information about politically sensitive actions of Security Council nations.
U.S. officials rejected the criticism. "We, of course, are cooperating with the investigation," said Richard Grenell, spokesman for the U.S. Mission to the United Nations.
The U.N. program, which was endorsed by the United States and begun in 1996, permitted Iraq to sell oil despite a stiff U.N. economic embargo against Saddam's regime, provided the proceeds were used to buy food and medicine for Iraqi people suffering under the sanctions.
As the indictment Thursday noted, "the government of Iraq alone had the power to select the companies and individuals who received the rights to purchase Iraqi oil." Beginning at least in 2000, it said, the government of Iraq demanded that distribution of oil be conditioned upon the recipients' willingness to pay kickbacks.
John Klochan, acting assistant director in charge of the New York FBI office, said the flaw of the oil-for-food was that Saddam could award contracts to his cronies.
"This was the embodiment of the fox guarding the henhouse," he said.
Among those who have come under fire in recent months over the handling of the program is U.N. Secretary General Kofi Annan.
Investigators last month criticized Annan for not pressing to learn details of his son Kojo's employment by a Swiss company that won a contract under the oil-for-food program.
Copyright © 2005, Newsday, Inc.
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