Bellaire Resident Gets 7-Year Sentence for Multimillion Dollar Kickback Scheme
Bellaire resident and former LyondellBasell Industries employee Jonathan Paul Barnes has been sentenced to 84 months in prison on fraud and international money laundering charges resulting from his involvement in a multimillion dollar kickback scheme in the international oil industry.
United States District Judge Sim Lake imposed the sentence at a hearing today in federal court in Houston.
Barnes pleaded guilty in March 2011 to conspiracy to commit wire fraud, making a false statement in a passport application, bulk cash smuggling and conspiracy to engage in international money laundering in order to conceal the source and nature of funds being sent from Swiss bank accounts to the United States.
Barnes was sentenced on those four counts of conviction to 84, 84, 60 and 84 months, which will run concurrently resulting in a total sentence of 84 months.
The judge also entered an $82 million restitution order against Barnes.
The United States had already seized assets purchased with proceeds from the kickback fraud that are valued at approximately $20 million. The forfeited assets include funds repatriated from Swiss bank accounts, real estate in the Houston area as well as Florida and upstate New York, 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.
Co-defendants Bernard Langley of the United Kingdom, and Clyde Meltzer of Livingston, N.J., has also pleaded guilty and are scheduled for sentencing on April 12. Co-defendant Alireza Etessami of Venezuela was recently arrested and is currently scheduled for trial on Feb. 6.
Houston Refinery LP is a subsidiary of LyondellBassell Industries and operates a large refinery in Houston. Houston Refinery imports most of its crude oil from Venezuela, the shipping of which is a significant expense. In late 2006, Barnes became the marine chartering manger at Houston Refinery responsible for entering into agreements and prices with shipping companies. From January 2007 through January 2010, Barnes agreed to have Houston Refinery pay approximately $82 million above market prices for shipping in exchange for millions of dollars in kickbacks from the individuals receiving the inflated payments.
Co-defendants Langley and Meltzer controlled two of the bank accounts receiving the inflated payments and paid Barnes approximately $20 million in kickbacks. Meltzer and Langley funneled the kickbacks to Barnes’ domestic bank accounts using a Swiss bank account in the name of another offshore entity in order to conceal that the kickbacks were coming from the entities doing business with Houston Refinery.
The passport fraud and cash smuggling charges are based on events occurring after Aug. 10, 2010, when federal agents served Barnes with seizure warrants for automobiles, jewelry and other items purchased with the fraud proceeds. On that day, Barnes agreed to turn over his passport to law enforcement. A couple weeks later, however, he filed an application for a new passport in which he falsely stated that he had lost the passport. Barnes then used the passport to engage in foreign travel. On Nov. 12, 2010, agents arrested Barnes at Bush Intercontinental Airport on a passport fraud charge when his flight returned from Europe. Barnes failed to declare on the customs form that he had U.S. and foreign currency in his luggage valued at more than $50,000.
The case was investigated by the United States Postal Inspection Service with the assistance of LyondellBasell Industries.