updated 4/18/2005 2:32:54 PM ET 2005-04-18T18:32:54

Two Houston oilmen pleaded not guilty Monday to charges that they cheated the United Nations oil-for-food program out of humanitarian aid funds by paying millions of dollars in secret kickbacks to Saddam Hussein’s Iraqi regime.

The pleas were entered by David B. Chalmers Jr., sole shareholder of Houston-based Bayoil (USA) Inc., and oil trader Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, during a brief proceeding in U.S. District Court in Manhattan.

Chalmers and Dionissiev were arrested Thursday at their Houston homes as federal authorities in Manhattan accused them of cheating the United Nations of at least $100 million that should have gone for humanitarian aid to Iraqis.

The men were charged along with a British citizen, John Irving. Prosecutors said they would seek Irving’s extradition from England.

Chalmers and Dionissiev entered their pleas before U.S. District Judge Denny Chin, who continued to allow each of them to remain free on bail of $500,000, secured by $150,000 in cash.

The oil-for-food program, which ran from 1996 to 2003, was created to help Iraqis cope with U.N. sanctions imposed after Saddam’s 1990 invasion of Kuwait. It let the Iraqi government sell limited — and eventually unlimited — amounts of oil primarily to buy humanitarian goods.

Bart Dalton, a lawyer who said he has known Chalmers since the 1970s, spoke on behalf of the men outside court, saying they “entered pleas of not guilty for the best reasons possible. They are not guilty. We fully expect them to be exonerated of these charges.”

Robert E. Welsh, entered a not guilty plea on behalf of Bayoil, said it was a “vibrant and active business.”

If convicted of the charges, Chalmers, Irving and Dionissiev could face up to 62 years in prison and a fine of $1 million.

On Jan. 18, Samir A. Vincent, 64, an Iraqi-born American businessman accused of skimming oil-for-food money, admitted to being an illegal agent of Saddam’s government.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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