By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
Dong Ah, a Korean company, is chief supplier for the Great Man-Made River Project, and reportedly is under federal scrutiny for its buying efforts in Houston. Leaving Houston's multinationals to beaver away at liberty under the hot Libyan sun has one local company under the federal spotlight crying foul.
"They tried to do it and they wanted to do it legally," says Dick DeGuerin about his two clients, Jerry Ford and Preston Engebretson of Thane-Coat. "We were trying to do it the way Brown & Root and all the other big companies do it." DeGuerin vehemently protests that the United States can't have two sets of rules, and that anything Thane-Coat may have done or tried to do leaves them as innocent as anyone at Brown & Root.
Customs, though, says Thane-Coat's efforts to go through the Bahamas was nothing other than a sham, using shell companies to juggle the company's anticorrosives and hide the shipment's intended delivery to Libya's Great Man-Made River Project.
While criminal charges were still being reviewed, the feds moved in to punish Thane-Coat's two operators. A year ago, Ford and Engebretson were paid a visit by Customs Service agents. The agents seized a 38-foot custom sailboat, a vintage Jaguar, a 1994 Cadillac Seville and a bank account. Customs agents also laid claim to Engebretson's Houston house, which they say had been renovated with ill-gotten Libyan money, their business premises and adjoining riverfront lots in New Braunfels. Even more damaging, an administrative judge in the U.S. Commerce Department suspended the company's export license, a move that the company is fighting. As for criminal charges, the U.S. Attorney's office has said it wants to investigate before it determines whether or not it will be filing cases.
Now, more than 12 months later, DeGuerin says they're still fighting Commerce and are waiting to see what, if anything, the U.S. Attorney's office will do involving possible criminal charges currently under review.
Thane-Coat has been hit with some of the toughest penalties so far passed out in Houston. The accusations rippled through Houston's energy industry as federal agents fanned out in search of information on Thane-Coat. "They [Customs agents] said they wanted a big fine," says one worker in the oil patch questioned about the Thane-Coat case. "Millions. They came in several times and asked for things, documents and stuff."
But most cases, like the one involving Tex-Co, have ended in plea bargains and a promise to assist investigators in other cases. Sea Traders' former owner, Murtaugh, agreed a few weeks ago to plead guilty on one of the counts against him. Soon after, the U.S. Attorney's office dismissed charges against Sea Traders, absolving it of any role in the scheme. Murtaugh now awaits sentencing in U.S. District Court for his role in circumventing the embargo. Murtaugh's attorney, Ron Waska, says Murtaugh was off at his country retreat and not available for an interview.
By accepting the plea deal, Murtaugh faces a maximum penalty of ten years in jail and a $250,000 fine, though Waska insists he can't be looking at more then "eight or nine months" in jail, and may get off on probation. If he does go to jail, Murtaugh will be the first American businessman to find himself behind bars for trading with the enemy. No one in the Justice Department is making bets publicly whether he'll be the last.