Billings coal mining official admits to wire fraud, money laundering, false statement charges
BILLINGS – A Billings man who worked for Signal Peak Energy, a Montana coal mining company, admitted in federal court today to an embezzlement scheme that defrauded companies of more than $20 million and to lying to investigators about a false abduction, U.S. Attorney Kurt G. Alme said.
Larry Wayne Price, Jr., 38, pleaded guilty to three counts of wire fraud, conspiracy to commit money laundering and false official statement.
U.S. Magistrate Judge Timothy J. Cavan presided at the hearing and recommended Price’s pleas be accepted by U.S. District Judge Dana L. Christensen, who is assigned to the case. A sentencing date will be set. Price was released pending sentencing.
Price faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud and conspiracy counts. He faces a maximum five years in prison, a $250,000 fine and three years of supervised release on the official false statement count.
Price also faces the forfeiture of real and personal property derived from the crimes, including a $20,321,134 monetary judgment, two Billings residences located at 5650 Canyonwoods Drive and at 5875 Whispering Woods Drive, three properties in Virginia, a motorhome, boat trailers, watercrafts and jewelry.
The government agrees that forfeited property will be used for restitution for victims until all eligible victims have been made whole. Remaining property will be forfeited under the normal forfeiture procedures and will not exceed the money judgment of $20,321,134.
If the case had proceeded to trial, the government would have provided the following information as evidence:
From about October 2016 until April 2018, Price embezzled about $20,321,134 from three coal-related companies. During that time, Price was vice president of surface activities at Signal Peak Energy and also operated a private business called 3 Solutions, LLC, which was involved in coal mining but its primary purpose was to supply chemicals to Signal Peak Energy.
The three companies Price defrauded were Ninety M, LLC, a Wyoming company of investors looking to invest large sums in coal mining projects; Three Blind Mice, LLC, another Wyoming company with investors seeking to invest in mining; and Signal Peak Energy.
Price had developed a reputation in Billings and elsewhere as a coal mining expert. Based on his reputation, he convinced Three Blind Mice to lend him $7.5 million, which he stole. Price maintained that 3 Solutions had secured a contract with a Pennsylvania coal company to install coal mining equipment. To complete the project, Price claimed he needed $7.5 million for expenses.
Price proposed that Three Blind Mice lend him the $7.5 million, and he would repay it $11 million on Jan. 31, 2018. Three Blind Mice agreed, signed an unsecured promissory note and wired 3 Solutions the funds. Price defaulted on the loan on Jan. 31, 2018.
An investigation found there was no contract between 3 Solutions and a Pennsylvania coal mine. Instead, Price spent the $7.5 million on unrelated expenses.
In another scheme, Price convinced Ninety M’s investors to appoint him as a representative of the company to help it buy and develop a coal mining property in Tazewell, VA, and to help develop other coal-related ventures. Price engaged in a series of five business deals with other companies on behalf of Ninety M in which he solicited about $13.5 million from the firm, of which $10,475,000 was fraudulently obtained.
Meanwhile, Price, while still employed by Signal Peak Energy, fraudulently induced Signal Peak Energy to buy coal-related equipment from a firm knowing that the firm would not actually provide the equipment. The firm funneled the money to Price through a bank account registered to 3 Solutions. The scheme defrauded Signal Peak Energy of about $2,396,134.
In April 2018, the Ninety M investors began to question some of the transactions involving Price and had confronted him on the phone. By April, Price was living in Virginia, where he was originally from.
On April 18, 2018, Price learned Ninety M was sending representatives to confront him about the fraudulent transactions and he decided to hide. Price contacted a woman he knew and agreed to hide at a house the woman had rented.
The same day, Price’s wife reported him missing to Virginia authorities and local law enforcement responded. Late that night, a driver spotted Price standing on the side of the road in Gratton, Va. Price was taken to a hospital for treatment and released.
Price was subsequently questioned by several law enforcement agencies. In those statements, Price falsely claimed he had been kidnapped by men who may have been associated with an outlaw motorcycle gang.
In statements to the FBI and IRS on April 20, 2018, Price said he had been approached by an unknown man who discussed possibly selling a motorcycle to Price. Price agreed to meet this man at a park and ride. When Price went to the meeting location, the unknown man arrived with a windowless van and was accompanied by another unknown man who pointed a gun at him. Price claimed the second man applied a rag with chemical on it to his face and that made him disoriented. Price said the men took him to an unknown location where he sat in a dark room on the floor for a period of time. The men applied the chemical rag to his face again. He then remembered the men threatening him and throwing him out of the moving van onto the side of the road.
Price knew that none of these statements to the FBI and IRS or to other law enforcement about his supposed abduction was true. Price was not kidnapped by anyone. The false statements cost the government significant investigative resources and hampered the investigation into Price’s own wrongdoing.
Assistant U.S. Attorneys Colin Rubich and Zeno Baucus are prosecuting the case, along with Assistant U.S. Attorney Randy Ramseyer, of the Western District of Virginia. The case was investigated by the FBI, IRS and the Montana State Auditor.