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Last Updated: Thursday, 14 April, 2005, 23:03 GMT 00:03 UK
US tycoon in oil-for-food scandal
An Iraqi oil field worker checks pipes at the West Qurna oil field in Iraq
Under the UN programme, Iraq sold oil to buy civilian goods
A Texas oil tycoon, a Bulgarian and a Briton have been indicted over the UN oil-for-food programme, US federal prosecutors have said.

David Chalmers Jr, Ludmil Dionissiev and John Irving are accused of paying bribes to Saddam Hussein's regime.

The $60bn (32bn) UN programme allowed Iraq to sell oil to buy civilian goods to ease the impact of UN sanctions.

Lawyers for Mr Chalmers and Mr Dionissiev said the men denied the charges against them.


David Chalmers Jr, his oil company Bayoil of Texas, and Bayoil Supply & Trading Ltd, based in the Bahamas, face federal criminal charges as part of the scheme to pay millions of dollars in secret kickbacks to Iraq.

The indictment charges that the bribes were paid so the Bayoil companies could sell Iraqi oil under the UN programme.

We will vigorously dispute the allegations of criminal conduct
Catherine Recker
Lawyer for Mr Chalmers

Also charged in the plot were Ludmil Dionissiev, a Bulgarian trader living in Houston, and John Irving, a British oil trader, according to the indictment unsealed in the US District Court in Manhattan.

Mr Chalmers and Mr Dionissiev were arrested on Thursday morning. The US has said it will seek the extradition of John Irving.

"We will vigorously dispute the allegations of criminal conduct," said Catherine Recker, a lawyer for Mr Chalmers and for Bayoil told the Associated Press news agency.

Mr Dionissiev's lawyer said "the complete absence of specifics" in the indictment showed that the government had "seriously over-reached" by charging him.

If convicted, the three men could each face a maximum term of 62 years in prison.


According to the indictment, Mr Chalmers and his two associates played a "pivotal role" in fixing the price of oil that was traded under the programme and "facilitated payment of illegal surcharges" on the oil to the former Saddam regime.

"These secret payments were illegal kickbacks... to front companies and bank accounts designated and controlled by the Iraqi regime," Mr Kelley said.

"The defendants were essentially diverting funds that otherwise would have been deposited in the oil-for-food escrow account, from which humanitarian aid to the Iraqi people was to be paid," he added.

A separate complaint charges South Korean citizen Tongsun Park with conspiracy to act in the US as an unregistered Iraqi government agent to assist in the creation of the oil-for-food programme.

There are currently a number of investigations into the alleged scandal.

The UN has set up a three-member independent inquiry, which delivers interim findings periodically, but is not due to conclude its investigation until mid-2005.


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