Once again we look back at the continuing cavalcade of crooks, criminals, miscreants and, to put it kindly,
morons the less intellectually gifted, who met justice face-to-face in 2017. This year’s class includes a preacher, a controller, an engineer, a landman, and two lawyers!
Perp: Johnny D. Phillips
Offense: Conspiracy to commit mail and wire fraud.
How: A landman, he and his co-conspirators claimed to have leases on valuable deposits of “blue gem” coal. They had neither the land nor the permits, swindling $14 million+ from 160+ investors. The court’s opinion explained the difference between making a false statement yourself and conspiring with someone else who makes the statement.
Sentence: 30 months in the hoosegow.
Takeaway: Reaffirming that thieves have no honor, the other perps pled guilty and turned on him at trial. Their use of fake names didn’t cause him to be suspicious, he testified. Really?
Perp: The Rev. Terry Wayne Millender
Offense: 30 counts of wire fraud and money laundering.
How: Along with the Missus, stole $2 million from his congregation and investors in a combo Nigerian oil deal and a micro-lending scam.
Takeaway: At last, a new way to be fleeced in a Nigerian oil deal.
And this just in: The old way isn’t dead, just arrested.
Perp: International energy lawyer Marco Antonio Delgado
Offense: Money laundering, wire fraud, engaging in monetary transactions involving criminally derived property.
How: Defrauded Mexico’s utility company out of $121 million for power plant turbines.
Sentence: 10 years, $11 million+ in restitution, forfeiture of $2.5 million+ in a Caribbean bank account and several houses.
Takeaway: Big-thinking recidivist with bona fides. Already in prison for $600 million money laundering scheme for a Mexican drug cartel; former trustee of Carnegie Mellon University.
Perp: Wayde McKelvy
Offense: Wire fraud, securities fraud in a Ponzi scheme.
How: Using materially false statements and omissions, he and his co-conspirators induced more than 300 investors to give $54 million to purchase unregistered securities for “new technology” that would turn trash into fuel and “carbon negative housing”.
Takeaway: Every potential investment could involve a garden-variety fraudster. Do your homework.
Perp: Gary J. Stern
Offense: Aiding and assisting in the preparation of fraudulent tax returns.
How: A 58-year-old partner in a Chicago law firm, his biggest client had a project to convert landfill gas into electricity. The firm determined that proposed transactions to utilize renewable energy tax credits were illegal. The client proceeded anyway. He suggested an alternative, which was also rejected. He then assisted in preparing the tax returns that got him.
Sentence: After paying $397K in restitution and surrendering his law license, 18 months in prison, which is far better than the 57 to 71-month sentencing guidelines.
Takeaway: See Mr. Stern’s sentencing position paper for a sad and sobering account of the ruination of a professional’s family, career, health and legacy by misplaced “loyalty” to a benefactor. This lesson is for everyone who serves a client.
Perp: Kristopher Brian Anderson
How: The 32-year-old controller of Pivotal Petroleum Partners, he formed a land company in order to fraudulently claim fictitious landmen’s services. Before being caught he collected $1.3 million, which financed an $86,000 per month lifestyle.
Takeaway: Did he ever wonder if they would miss the money, or notice the lifestyle?
Perp: Christopher J. Lollar
Offense: Insider trading of Apache Corp. stock.
How: While working as an engineer in Apache’s San Antonio office on the newly-discovered Alpine High resource play, traded on shares and call options using nonpublic information.
Sentence: Restitution of $214K in illegal profits, plus interest, plus $214K penalty.
Takeaway: More dumb than scurrilous? Coming soon, how the SEC discovers these schemes.
A musical interlude for 2017’s “optimists”.