Former Energy Broker Pleads Guilty to Insider Trading and Kickback Scheme
A former Texas energy broker pleaded guilty Monday to conspiracy to commit commodities fraud and wire fraud and to violate various provisions of the Commodity Exchange Act for his role in an insider trading and kickback scheme.
According to court documents, Mathew Webb, 51, of Tiki Island, admitted he conspired with others to misappropriate material, nonpublic information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts. He shared the net profit from these fraudulent trades with others involved in the fraudulent trading scheme. Webb further admitted he and others agreed to falsely document certain proceeds as income on IRS forms in part to conceal the true nature of the funds and to make the illicit profits appear to be legitimate income paid.
According to court documents, Webb also admitted that he paid kickbacks to an energy trader and co-conspirator from commission fees paid by the co-conspirator’s employer to Webb’s brokerage. In exchange for these commission fee kickbacks, Webb’s co-conspirator agreed to direct his employer’s business to Webb’s brokerage. The scheme generated proceeds of approximately $5.9 million, and Webb personally profited in the amount of $585,000.
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. He is scheduled to be sentenced on Sept. 20.
In two related cases, Marcus Schultz, 41, and John Ed James, 51, pleaded guilty in July 2020 and February 2021, respectively.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Jennifer Lowery of the Southern District of Texas; Special Agent in Charge Perrye K. Turns of the FBI’s Houston Field Office; and Special Agent in Charge D. Richard Goss of IRS-Criminal Investigation’s Houston Field Office made the announcement.
Trial Attorneys Leslie S. Garthwaite, Della Sentilles, and Drew Bradylyons 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.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.