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Dec. 17, 2009

EL PASO MERCHANT ENERGY TRADERS SENTENCED TO PRISON

(HOUSTON) – James Brooks, the former managing director of North American natural gas sales for El Paso Merchant Energy, and El Paso natural gas traders Wesley C. Walton and James Patrick Phillips have been sentenced for conspiracy, false reporting and wire fraud, United States Attorney Tim Johnson announced today.

At a sentencing hearing today, United States District Melinda Harmon sentenced Brooks, 50, to 168 months in prison to be followed by a three-year-term of supervised release. Brooks was ordered to pay a $5,000 fine. Walton, 47, and Phillips, 50, were each sentenced to 135 months in prison to be followed by a three-year-term of supervised release and ordered to pay fines of $7,500 each. Brooks, Walton and Phillips remain free on bond pending the issuance of an order to surrender to a Bureau of Prisons facility to be designated in the near future.

Brooks, Walton and Phillips were convicted of conspiracy, false reporting and wire fraud on Feb. 7, 2008, by a jury’s verdicts following a two-month trial. The jury found that between April 2000 and May 2002 the defendants submitted or aided in the submission of reports containing fictitious trades to industry publications in an attempt to influence natural gas prices in El Paso’s favor. Brooks was convicted of one count of conspiracy, 22 counts of false reporting and 22 counts of wire fraud. Walton was convicted of one count of conspiracy, 11 counts of false reporting and 11 counts of wire fraud. Phillips was convicted of one count of conspiracy, 10 counts of false reporting and 10 counts of wire fraud.

For more than seven years, the United States government has worked to investigate and prosecute the manipulation of natural gas prices throughout the country. The government’s success in this case is the culmination of years of work done by the United States Attorney’s Office in Houston, the United States Postal Inspection Service and the FBI. It follows the 2006 Valencia/Singleton trial in which former Dynegy Inc. natural gas trader, Michelle Valencia, was convicted of seven counts of wire fraud and El Paso natural gas trader, Greg Singleton, was convicted of one count of wire fraud, as well as guilty pleas submitted by former El Paso traders Todd Geiger, Chris Bakkenist, Bill Ham, Don Guilbault, Dallas Dean, Don Burwell and former Reliant natural gas trader Jerry Futch.

Assistant United States Attorneys John Lewis and Belinda Beek prosecuted the case.

 

 

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