Like wild mushrooms after a warm summer rain, and undaunted by the COVIDs, the fraudsters, the grifters, and the “the spawn of the Devil’s own strumpet”* were prolific before meeting the wrath of the courts and the regulators in 2021. This year features several potential lifetime achievement awards for recidivism.
Corruption Goes Nuclear
Perps: Former Ohio Speaker of the House Larry Householder and utility First Energy, beneficiary of a $1.3 billion state bailout of the state’s nuclear energy industry.
Crime: Householder was indicted on racketeering and conspiracy charges for taking bribes from FirstEnergy. Others were charged for crimes.
How they did it: The utility paid $56.6 million to an outfit called Generation Now who allegedly siphoned it off to Householder and the others. The money came from customers of First Energy’s distribution and transmission units.
Sentences: Plenty but none yet to the calaboose. Householder’s trial date is coming up. Republicans and Democrats together expelled him from the House; First Energy CEO Charles Jones was fired; two others pled guilty; a lobbyist committed suicide; First Energy was fined $230MM and entered into a deferred prosecution agreement.
The big picture: Forbes’ Ken Silverstein predicts that it will jar an industry that is perpetually trying to regain its balance after much bad publicity. Plus, high capital costs for construction and cheap shale gas have curtailed nuclear development, presenting a problem for the environment. Example: When Southern California Edison closed its San Onofre nuclear station in 2013 CO2 emissions jumped by 35% (That’s green California for you). Factoid: 96 nuclear reactors in 29 states supply about 20% of the country’s electricity and 55% of the carbon free power.
Don’t you know his mother was disappointed
______________________________________________________________
Perp: Mark Plummer, host of the ironically-named Dallas radio show “Smart Oil and Gas”.
Crime: Violations of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5(a) and (c).
How they did it: As told by Natalie Plummer of the Dallas Morning News, on his radio show he encouraged listeners to call for more information. The calls would go to Petroleum Resources of Texas, which was secretly working with Plummer. He didn’t tell the callers that the company was owned by a Plummer’s former salesman Mike Barrera and that Plummer was involved. Barrera was not a registered broker but solicited and sold securities anyway, raising $7 million from more than 70 investors for two drilling projects. Plummer and cohorts used the money to pay for club memberships, student loans, personal credit card debt, and car and mortgage payments. As expected, there was hardly any money left to return to victims.
Sentence: None. This was an SEC complaint. The defendants will no longer be allowed to offer oil and gas securities. Doesn’t seem like enough.
Not his first rodeo: Plummer’s former company, Texas E&P Partners, Inc., was charged with misappropriating investor funds, raising $6.1 million from 2015 to 2017 and spending nearly $400,000 for personal use or improper business expenses. He paid $500,000 to settle those charges. And Barrera was indicted in June 2014 on a felony charge of aggravated assault with a deadly weapon.
Query: What due diligence did KRLD do before they hired the recidivist?
___________________________________________________________
Perps: Christopher Condron.
Crime: Found guilty by a jury of four counts of wire fraud in a conspiracy to defraud the US Treasury Department, in violation of 18 US Code Section 286.
How they did it: Under Section 1603 of the American Recovery and Reinvestment Act of 2009 a person who places a specified energy property into trade or business is eligible for a tax free grant from the Department of Treasury. With several others, he sought $50MM in four different Section 1603 grants. They hid the true nature of Condron’s involvement. They falsely stated that the various companies had acquired, placed into service or started construction of energy properties by falsely claiming:
- Condron’s companies had sold a gasification system for almost $3MM and that the gasifier was in service;
- a nursery had purchased a gasification system with a cost basis of $26MM, requesting an $8MM grant;
- a trash gasification operated by a person with significant alternative energy experience when he had none with a cost basis of $58MM, requesting a grant of $17MM;
- a wind farm project comprising 58 small wind turbines in Hyannis, Massachusetts, with a cost basis of $84MM, requesting a grant of $25MM.
Sentence: None … yet. Sentencing set for February.
_________________________________________________
Multitasking Master
Perp: Richard Dale Sterritt, Jr., a/k/a Richard Richmond, and others, including lawyer James Christopher Pittman.
Crime: Violations of the Securities Act of 1933 and Securities Exchange Act of 1934 via a “pump and dump” scheme. Defrauded more than 300 investors by false and misleading statements in a $16MM unregistered private placement offering for development of mineral rights on a cattle ranch in West Texas.
How they did it: Using a new name to hide his involvement in past criminality, scammed across several different industries. He used Dallas-based Zona Energy in a scheme to manipulate the market for that stock; bought luxury goods such as a Bentley, rental apartments, and cash to friends, family and girlfriends from the pilfered proceeds.
Sterritt et al were introduced to an individual described as the leader of a group of corrupt stockbrokers. The “stockbroker” turned out to be an FBI agent. While they were at it with Zona and OrganHarvest (a cannibis production enterprise) Sterritt et al planned with the same “stockbroker” to manipulate the stock of ERF Wireless Inc., a microcap issue based in the Dallas area and controlled by Sterrett.
Sentence: None, SEC complaint.
_____________________________________________________
Recidivism squared
Perp: Arael Doolittle,
Past crimes: You might remember him from last year’s Bad Guys. Then accused of four counts of wire fraud, eight counts of engaging in monetary transactions in criminally derived funds. Bilked 21 investors in oil deals by invoking the name of a Chevron-affiliated company and used phony letters, email addresses and bank account. Well, he’s back, greedier and more audacious than before.
This time: Wire fraud
How he did it: Tried to scam the Australian government out of $317MM by promising to deliver 50 MM N95 masks that he and his co-fraudster did not actually possess.
Sentence: Potentially five years in prison.
_______________________________________________________
... and Bad Girls ...
Perp: Angelica Garcia Dunn.
Crime: Conviction of two counts of wire fraud.
Sentence. Jail for 12 months and a day; one year of supervised release; restitution of $2,282,000.
How she did it: Her company, Aim Global Financial, contracted with BP Products North America to act as an escrow agent to make vendor payments to BP’s railcar lessor and repair vendors. As the Information stated in elegant legalese, she “engaged in a scheme to defraud and obtain money by materially false and fraudulent pretenses, refutations, and promises and to knowingly use and cause to be used in interstate wire communications facilities in carrying out the scheme to defraud.”
She diverted funds to be used to pay BP invoices into her separate bank accounts and paid the vendors out of succeeding payments from BP. It appears that she would always be behind but not so far behind as to raise questions.
Query: What other result would she expect when the money stopped flowing?
It’s not murder and adultery but it’s still cheating.
*Robert Mitchum as the evil preacher, Night of the Hunter, (1964)
from Texas Bar Today https://ift.tt/3FlExcp
via Abogado Aly Website
No comments:
Post a Comment