David Chalmers, owner of Bayoil (USA) Inc. and Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, were arrested Thursday morning at their homes in Houston, reported the Associated Press.
U.S. Attorney David Kelley said he would seek extradition of defendant John Irving from England as well.
Kelley called the two indictments unsealed in U.S. District Court in Manhattan "two more pieces in the oil-for-food puzzle."
"It's a broad and large investigation," he added, according to the AP. "We're going to wring the towel dry."
One indictment accused the three defendants of paying millions of dollars in kickbacks so Houston-based Bayoil and another Chalmers company, Bayoil Supply and Trading Limited, based in Nassau, Bahamas, could continue to sell oil to Iraq under the $67 billion oil-for-food program.
The kickbacks, between mid-2000 and March 2003, involved funds otherwise intended for humanitarian relief, Kelley said.
He said $100 million would be "a conservative estimate" of the value of oil the defendants dealt with, the AP reported.
The oil-for-food program began in December 1996 and ended after the U.S. led invasion in March 2003. Iraq has released papers documenting bribes, kickbacks and oil smuggling.
On Jan. 18, an Iraqi-born American businessman -- Samir Vincent, a naturalized U.S. citizen from Annandale, Va. -- pleaded guilty in New York to being an illegal agent of Saddam's government. Vincent, who was accused of skimming money from the oil-for-food program, was the first person to be charged in the Justice Department's probe.