Tuesday, February 8, 2011

Gas Trader Pleads Guilty

HOUSTON—Former Houston gas trader Stephanie Roqumore has pleaded guilty to two counts of wire fraud arising from her scheme to defraud numerous natural gas trading companies of nearly $8 million, United States JosĂ© Angel Moreno announced today.
Today, at a hearing before United States District Judge Lynn N. Hughes, Roqumore, 48, admitted that from March 2002 through April 2010, she used false and fraudulent financial statements to defraud 12 known companies—Virginia Power Energy Marketing, Inc.; Coral Energy Resources, L.P.; Occidental Energy Marketing, Inc.; Energy-Koch Trading, L.P.; Cargill, Inc.; Hess Corporation; Natural Fuel Resources, Inc.; Proliance Energy, LLC; Southwest Energy, L.P.; Adams Resource Marketing, LTD; Allegheny Energy; and CMS Resource Energy Management Company. Judge Hughes scheduled Roqumore’s sentencing for May 9, 2011. Each of the wire care fraud counts carries a maximum penalty of 20 years in a federal prison and a $250,000 fine. In addition to pleading to the criminal charges, Roqumore has agreed to a forfeiture order of over $4.8 million in illegal proceeds from her scheme.
Roqumore admitted that as the sole employee, owner, and operator of three natural gas trading companies: SRR Energy Management Resources, Inc, d/b/a Gas Energy Management, Inc. (GEM); Gas American Resources, Inc. (GAR); and, Resource American Energy (RAE), she contacted natural gas trading companies all over the country requesting to trade natural gas with them. If the company was interested in trading with Roqumore, the two parties entered into a Base Contract for Sale and Purchase of Natural Gas. Shortly after entering into the contract, Roqumore would request a line of credit from the trading company in order to purchase natural gas from them. The companies required financial statements from Roqumore for whichever of her three companies she was using at the time. The line of credit was granted based on the net worth of the company provided in its financials. The financial statements that Roqumore provided to obtain the lines of credit were intentionally falsified by her to make her companies (GEM, GAR and RAE) appear to be more profitable and worth far more than they actually were.
She further admitted the false financial statements for GEM or GAR were faxed by Roqumore under a cover letter purportedly from an actual Certified Public Accountant (C.P.A.). The attached sheets were stamped "audited" and always showed Roqumore's companies, whether GEM or GAR, with a net year-end income in the millions of dollars. Roqumore admitted that she falsified the cover letters also and that the C.P.A. played no role in her fraudulent behavior. The fraudulent financials showed year-end net incomes for GEM and GAR for 2003 to 2006 in the multi-millions, when in fact neither company’s yearly net income ever exceeded $100K and their ending net income was usually negative. Roqumore also created fraudulent financials for RAE for the same purposes. The RAE financials, however, were sent under a cover letter from a fictitious C.P.A. firm, R&R Accounting and Consulting Group, in Houston.
Roqumore admitted purchasing natural gas from one of the victim companies using the fraudulently obtained line of credit and then selling that natural gas to other gas companies. When the trades settled, Roqumore was paid for the gas she sold but she did not pay the victim company for the gas she bought. For example, from November to December 2005, Energy-Koch Trading, L.P. (EKT) sold GEM $1.1 million of natural gas on credit. Roqumore, in turn, sold that natural gas to four other companies for just under $1.1 million. On the settlement dates, GEM was paid a total of $1,092,187.80 by the four companies, but GEM paid EKT only $50,000. Roqumore never paid EKT the remaining $1,046,331.20 for the natural gas she purchased from them. On August 30, 2006, Roqumore faxed fraudulent financial statements showing a net income of more than $10 million for GAR to National Fuel Resources, Inc. (NFR). Another time, Natural Fuel Resources, Inc. (NFR) sold GAR $1.6 million of natural gas on credit. Roqumore, in turn, sold that natural gas to Conoco Phillips for just over $1.6 million. On the settlement dates, GAR was paid $1,649,730.00 by Conoco Phillips but GAR paid NFR only $100,000. Roqumore never paid NFR the remaining $1,494,617.00 for the natural gas she purchased from them. In total, Roqumore fraudulently obtained approximately $7.9 million in natural gas on credit from the 12 energy companies from March 2002 through April 2010. Roqumore never paid for that natural gas.
Roqumore remains free on bond pending sentencing.
The investigation leading to the criminal charges and today’s conviction was conducted by the FBI. Assistant United States Attorney Al Balboni is prosecuting the case.

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