Ex-LyondellBasell Industries NV (LYB) employee Jonathan Paul Barnes was sentenced to seven years in prison on fraud and money-laundering charges in a kickback scheme involving oil shipments to the company’s Texas refinery.
Barnes, 56, was sentenced today in Houston federal court by U.S. District Judge Sim Lake, who also ordered Barnes to pay $82 million in restitution, federal prosecutors said in a statement.
Barnes pleaded guilty in March to accepting about $20 million in kickbacks while managing marine chartering for Lyondell’s Houston refinery from 2007 to early 2010.
He acknowledged running a scheme that overcharged Lyondell’s Houston subsidiary roughly $82 million on oil shipments from Venezuela, according to court papers. He was assisted by two oil traders, Bernard Langley, 54, of the U.K., and Clyde Meltzer, 65, of Houston and Livingston, N.J. Both have pleaded guilty to funneling kickbacks to Barnes and are awaiting sentencing in April.
“The United States has already seized assets purchased with proceeds from the kickback fraud that are valued at approximately $20 million,” Kenneth Magidson, the U.S. Attorney for Houston, said in the statement.
The seized assets included real estate in Houston, Florida and upstate New York and “more than 15 luxury and classic vehicles including a 1957 Cadillac once owned by Frank Sinatra, a boat and numerous pieces of high-end jewelry,” Magidson said.
“The kickback scheme was uncovered during an internal audit, which raised questions about certain marine chartering costs which appeared to deviate from the industry norm,” David Harpole, Lyondell’s Houston spokesman, said in an e-mail in response to today’s sentencing. He said that when an internal investigation disclosed apparent kickbacks, the company “took immediate steps to address the matter,” including firing Barnes and referring the matter for criminal investigation by the Justice Department’s Houston division.
Rusty Hardin, Barnes’s lawyer, didn’t immediately respond to a call seeking comment on today’s sentence.
A fourth defendant, Alireza Etessami, 37, of Venezuela, was recently arrested and is currently scheduled for a February trial on his alleged role in the scheme. Three other alleged co- conspirators remain at large, according to court papers.
The case is U.S. v. Barnes, 4:10-cr-0787, U.S. District Court, Southern District of Texas (Houston).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at firstname.lastname@example.org.
To contact the editor responsible for this story: Michael Hytha at email@example.com