OIL SUPPLY COMPANY EXECS PLEAD GUILTY TO FRAUD IN KICKBACK SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, February 26, 2016

Two Former Executives of Houston-Based Oil Supply Company Plead Guilty to Fraud in Illegal Kickback Scheme

Two former executives of a Houston-based oil supply company pleaded guilty today to fraud charges for their role in a scheme to secure illegal kickbacks in connection with oil projects in Latin America.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office made the announcement.

Franklin Marsan, 51, and Eduardo Betancourt, 48, both of Spring, Texas, each pleaded guilty to one count of conspiracy to commit wire fraud.  They will be sentenced on July 1, 2016, by U.S. District Judge Melinda Harmon of the Southern District of Texas, who accepted their pleas today.  As part of their plea agreements, Marsan and Betancourt agreed to pay restitution to their former employer.

According to the plea agreements, Marsan and Betancourt worked for a Texas-based company that, among other things, manufactured and supplied products for the petroleum, oil and gas industries.  The company hired and paid third-party sales agents to promote and sell its products to customers outside the United States.  Marsan and Betancourt ran the company’s Latin American operations from offices located in Houston.  As part of their guilty pleas, Marsan and Betancourt admitted that from at least 2008 until at least March 2011, they obtained kickbacks from the commissions that these third-party sales agents received in connection with sales of the company’s products in several Latin American countries.  Marsan and Betancourt admitted that during the course of the scheme, they received a total of at least $150,000, mostly in cash, in kickbacks, which they actively concealed from the company.

The FBI’s Houston Field Office investigated the case.  Senior Trial Attorney Patrick Pericak and Trial Attorney Lorinda Laryea of the Criminal Division’s Fraud Section and Deputy Chief John Pearson of the Southern District of Texas are prosecuting the case.

The United States thanks the government of Panama for its assistance in this case.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.