Fraud tagged interest

A federal grand jury in Houston returned an indictment today charging a Texas man for an illegal kickback scheme and a commodities insider trading scheme involving natural gas futures.

According to court documents, Matthew Clark, 54, of The Woodlands, worked as a natural gas trader and as president of an energy company based in Houston. The indictment alleges that Clark conspired with others to receive kickbacks from commission fees paid by Clark’s employer to Classic Energy LLC, a brokerage firm owned and operated by Matthew Webb. In exchange for these commission fee kickbacks, Clark agreed to direct his employer’s trades to Webb’s brokerage.

ADVERTISEMENT

Small Biz Buzz

Text Get the tools to succeed
Sign Up Free

Find Out How

SpringSuite365 small business management

According to the indictment, Clark conspired with others to misappropriate his employer’s material, nonpublic information and to engage in prohibited commodities transactions, including illegal prearranged trades, in natural gas futures contracts for his own, and his co-conspirators’, personal gain. Clark and his co-conspirators caused prices to be reported, recorded and registered on designated commodities markets that were not true, bona fide prices. The profits from these fraudulent trades were split among Clark and his co-conspirators.

Clark is charged with one count of conspiracy to commit honest services wire fraud, three counts of honest services wire fraud, one count of conspiracy to violate various provisions of the Commodity Exchange Act, two counts of prohibited commodities transactions and two counts of insider trading. The defendant will make his initial court appearance before a U.S. Magistrate Judge in the U.S. District Court for the Southern District of Texas. If convicted, he faces a maximum total penalty of 130 years in prison for these charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

In a related case, Peter Miller, 41, of Puerto Rico, pleaded guilty to conspiracy to commit commodities fraud today. Miller, who is alleged to be one of Clark’s co-conspirators, is scheduled to be sentenced on May 12.

In four other related cases, Marcus Schultz, 41, of Houston; John Ed James, 51, of Katy, Texas; Webb, 51, of Tiki Island, Texas; and Lee Tippett, 62, of Jacksonville, Florida, pleaded guilty on July 20, 2020, Feb. 1, 2021, June 15, 2021, and Aug. 17, 2021, respectively. Schultz pleaded guilty to a one-count information charging him with conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act. James pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and wire fraud. Webb pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and wire fraud and to violate various provisions of the Commodity Exchange Act. Tippett pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and honest services wire fraud.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer Lowery for the Southern District of Texas; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Acting Special Agent in Charge Richard A. Collodi of the FBI’s Houston Field Office; and Special Agent in Charge Ramsey E. Covington of the IRS-Criminal Investigation’s Houston Field Office made the announcement.

The FBI’s Houston Field Office and IRS-Criminal Investigation’s Houston Field Office are investigating the case.

Assistant Chief Leslie S. Garthwaite and Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section, and Deputy Chief Suzanne Elmilady and Assistant U.S. Attorney Zahra Fenelon of the U.S. Attorney’s Office for the Southern District of Texas are prosecuting the case.