Houston Man Pleads Guilty to Funneling Illegal Fund to the Hussein Government in Iraq

Guilty pleas have been entered in a case involving a scheme to pay illegal surcharges relating to the purchase of crude oil under the United Nations Oil-for-Food Program between mid-2000 and 2003. The illegal money was paid to the former Government of Iraq.

Those who pleaded guilty are David B. Chalmers, Jr., 53, of Houston, Texas as well as two corporations that he was the owner of. The companies are Bayoil (USA), Inc., which is a corporation registered in Delaware and having offices in Houston Texas and Bayoil Supply & Trading Limited, a company registered in the Bahamas and having an office in Nassau, Bahamas. The two companies are known collectively as "Bayoil Companies"

Another defendant involved in the scheme, Ludmil Dionissiev, 61, of Houston, Texas pleaded guilty to smuggling charges.

Chalmers and this Bayoil Companies pleaded guilty to being participants in the conspiracy to commit wire fraud, which is related to paying secret and illegal money to the former Government of Iraq.

Dionissiev also pleaded guilty to helping with the transportation and sale of Iraqi oil even though he knew that one of his company's agents had already promised to pay the illegal money. This occurred during January of 2001. The money was paid on behalf of a Russian political figure.

The facts as listed in the indictment are that The Hussein regime, beginning in or about mid-2000 began the process of obtaining the right for purchasers to purchase Iraqi oil under the Oil-for-Food Program providing that the purchasers were willing to return a part of their profits secretly and unlawfully to the then Government of Iraq.

Chalmers and the Bayoil Companies agreed to make these illegal payments in order to make sure that they could continue selling the oil from Iraq under the UN program.

In doing so, Chalmers and the Bayoil Companies took money that was intended to purchase humanitarian goods for the citizens of Iraq. They also contacted a Russian political figure telling him about the deal.