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US charges 3 with bribery in Azeri oil deal
Reuters
Thursday, October 6, 2005
NEW YORK (Reuters) - Three men have been indicted in a scheme to fly
tens of millions of dollars into Azerbaijan to bribe officials there
and gain control of the state oil company.
The defendants include the internationally wanted Czech investor
Viktor Kozeny, who was arrested in the Bahamas on Wednesday, and a
managing director of AIG Global Investment, a subsidiary of American
International Group, the world's largest insurer by market value.
"This was a brazen attempt to steal the wealth of a sovereign nation,"
U.S. Attorney Michael Garcia told a news conference on Thursday to
announce the indictments by a federal grand jury.
Lawyers for the AIG employee, David Pinkerton, and another defendant,
Frederic Bourke, said they were both victims who were defrauded by
Kozeny and that they were helping to build a case against them.
Pinkerton, who was placed on leave with pay by AIG pending the
resolution of the case, and Bourke both pleaded not guilty on Thursday
to a series of charges including conspiracy to violate the Foreign
Corrupt Practices Act and money laundering.
They had turned themselves in to the FBI earlier on Thursday.
The Americans are seeking Kozeny's extradition. He was previously the
subject of fraud charges in the Czech Republic and of a New York state
fraud indictment.
The case involves the former Soviet republic's state oil company,
SOCAR.
VOUCHERS FOR SHARES
The country had been preparing the privatization of SOCAR in the 1990s
by issuing vouchers to bid for its shares, and the freely traded
instruments were typically bought and sold with dollars, officials
said.
Foreigners could also own vouchers if they purchased a
government-issued option for each voucher held.
Kozeny sent millions in cash on private jets or planes he chartered
into Azerbaijan via Switzerland to buy vouchers, and Bourke and
Pinkerton "knowingly participated in the scheme," Garcia said.
Azerbaijan holds parliamentary elections on November 6.
AIG said no charges had been brought against the company itself and
that no client money was involved.
AIG said the Azerbaijan privatization program was brought to
Pinkerton's group by Omega Partners Advisors, a New York hedge
fund. AIG, as co-investor, contributed about $15 million of a total
$180 million invested in 1998.
When AIG discovered in 1999 that it had been defrauded, it sued Kozeny
and has cooperated fully with the investigation by the U.S. Attorney's
office, the company said in its press release.
http://today.reuters.com/news/newsArticle.aspx?type=topNews&storyID05-10-06T201644Z_01_YUE672988_RTRUKOC_0_US-CRIME-OIL-AZERBAIJAN.xml&archived=False
Reuters
Thursday, October 6, 2005
NEW YORK (Reuters) - Three men have been indicted in a scheme to fly
tens of millions of dollars into Azerbaijan to bribe officials there
and gain control of the state oil company.
The defendants include the internationally wanted Czech investor
Viktor Kozeny, who was arrested in the Bahamas on Wednesday, and a
managing director of AIG Global Investment, a subsidiary of American
International Group, the world's largest insurer by market value.
"This was a brazen attempt to steal the wealth of a sovereign nation,"
U.S. Attorney Michael Garcia told a news conference on Thursday to
announce the indictments by a federal grand jury.
Lawyers for the AIG employee, David Pinkerton, and another defendant,
Frederic Bourke, said they were both victims who were defrauded by
Kozeny and that they were helping to build a case against them.
Pinkerton, who was placed on leave with pay by AIG pending the
resolution of the case, and Bourke both pleaded not guilty on Thursday
to a series of charges including conspiracy to violate the Foreign
Corrupt Practices Act and money laundering.
They had turned themselves in to the FBI earlier on Thursday.
The Americans are seeking Kozeny's extradition. He was previously the
subject of fraud charges in the Czech Republic and of a New York state
fraud indictment.
The case involves the former Soviet republic's state oil company,
SOCAR.
VOUCHERS FOR SHARES
The country had been preparing the privatization of SOCAR in the 1990s
by issuing vouchers to bid for its shares, and the freely traded
instruments were typically bought and sold with dollars, officials
said.
Foreigners could also own vouchers if they purchased a
government-issued option for each voucher held.
Kozeny sent millions in cash on private jets or planes he chartered
into Azerbaijan via Switzerland to buy vouchers, and Bourke and
Pinkerton "knowingly participated in the scheme," Garcia said.
Azerbaijan holds parliamentary elections on November 6.
AIG said no charges had been brought against the company itself and
that no client money was involved.
AIG said the Azerbaijan privatization program was brought to
Pinkerton's group by Omega Partners Advisors, a New York hedge
fund. AIG, as co-investor, contributed about $15 million of a total
$180 million invested in 1998.
When AIG discovered in 1999 that it had been defrauded, it sued Kozeny
and has cooperated fully with the investigation by the U.S. Attorney's
office, the company said in its press release.
http://today.reuters.com/news/newsArticle.aspx?type=topNews&storyID05-10-06T201644Z_01_YUE672988_RTRUKOC_0_US-CRIME-OIL-AZERBAIJAN.xml&archived=False