National Oilwell Varco Wins $12 Million After Discovering Ex-Employees’ Fraud
August 15, 2018
HOUSTON – A federal judge awarded $12.2 million to National Oilwell Varco (NOV) from three former high-level employees based in Dubai who participated in various schemes to defraud and siphon funds from the company.
After receiving a whistleblower complaint through NOV’s internal compliance hotline, the global oilfield services company conducted a thorough investigation that ultimately uncovered multiple fraudulent schemes orchestrated by the three federal defendants and a U.S.-based executive, whose case was separately resolved via arbitration. The schemes uncovered by NOV were wide-ranging and included the four high-ranking employees’ creation of sham vendors, strawman companies, fake agents, and other means to skim money from their company around the globe.
“The fraud and conspiracy uncovered in this case was clever and sophisticated, but ultimately rooted out by the diligent work of NOV’s internal investigations group. This case demonstrates the importance of having a good corporate investigations team and robust internal process for pursuing reports of legal or ethical non-compliance. This result also shows that a company willing to investigate and pursue claims against those who defraud it is not only setting a strong example, but also protecting its bottom line,” said NOV lawyer Taylor Freeman of AZA, or Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C. Also representing NOV were AZA founding partner John Zavitsanos and of counsel Shawn Bates.
The lawsuit before Judge Lee Rosenthal in the U.S. Southern District of Texas was hard-fought, with AZA defeating an onslaught of motions to stall discovery or have NOV’s case dismissed from federal court on various grounds. Once the defense motions had all failed, the former employees, Sadeesh Sadagopan, Majed Hamdan and Khaled Zantout, agreed to default on liability for NOV’s claims rather than face NOV in general discovery. After a contested hearing on damages, the judge awarded NOV the $12.2 million from all three defendants jointly and severally.
The case is National Oilwell Varco LLP v. Sadeesh Sadagopan et al. in the U.S. Southern District of Texas, No. 4:16-cv-02261.
Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., or AZA, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, intellectual property, and business dispute cases. AZA is recognized by Chambers USA 2018 among the best in Texas commercial law; by U.S. News – Best Lawyers’ Best Law Firms as one of the country’s best commercial litigation firms for 2018; and previously by Law360 as a Texas Powerhouse law firm. National corporate counsel named AZA one of the country’s best in client service among law firms serving the Fortune 1000.