Texas Oilman Oscar Wyatt guilty in kickbacks scheme

By Karyn Chenoweth Oct 2, 2007, 4:20 GMT

Texas oil tycoon Oscar Wyatt, former chairman and founder of Coastal Corp, departs from Federal Court in New York after a pre-trial hearing August 30, 2007. Wyatt has gone from crop-duster to World War II pilot to freelance hostage negotiator in a career that leaves people loving or disliking him, with few indifferent. REUTERS/Chip East

Wealthy Texas oilman Oscar Wyatt pleaded guilty Monday to participating in a scheme that paid millions of dollars in kickbacks to the former Iraqi government between 2000 and 2003 to secure contracts linked to the United Nations oil-for-food program.

U.S. Attorney Michael Garcia said Wyatt, 83, made the plea nearly four weeks into his trial, the day before the government planned to rest its case against him.

Marketwatch reports that Wyatt pleaded guilty to one count of conspiracy to commit wire fraud.

The former founder and CEO of Coastal Corp. will be sentenced by Judge Denny Chin on Nov. 27.
Though the crime is punishable by up to 20 years in prison, the plea deal insures that Wyatt will spend no more than two years behind bars.
Wyatt will forfeit $11 million and begin his prison sentence by Jan. 2.

After the first Iraqi war in 1991, the United Nations proposed the oil-for-food program to allow the sanctioned country to use its vast petroleum wealth to feed its people.

Under the program, Iraq was allowed to sell a limited quantity of oil, with proceeds deposited into an escrow account held by the U.N. The money could only be used for humanitarian purposes, including food and medicine for the Iraqi people and reparations to the victims of Iraq's 1990 invasion of Kuwait.

Marketwatch reports the regime of Saddam Hussein began charging kickbacks in 2000 for the right to purchase its oil under the U.N. program.

"Wyatt and other Americans elected to pay these illegal kickbacks in order to continue to participate in the business of selling Iraqi oil," Garcia said in a prepared statement.

"By participating in this scheme, Wyatt and others diverted millions of dollars that otherwise would have been available for humanitarian purchases."

During the trial, which began Sept. 10, former Iraqi officials testified that Wyatt agreed to make payments through four front companies in Cyprus.