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Press Release

Colorado Resident Sentenced in Mail Fraud and Money Laundering Case

For Immediate Release
U.S. Attorney's Office, District of North Dakota

BISMARCK - US Attorney Christopher C. Myers announced that on Feb. 23, 2017, Dean J. Kostelecky, 58, Broomfield, CO., was sentenced before Chief US District Judge Daniel L Hovland to serve one and a half years in prison and three (3) years of supervised release. Judge Hovland also ordered that Kostelecky pay restitution in the amount of $212,159.70, and pay a $200 special assessment to the Crime Victim’s Fund. Kostelecky pled guilty on Nov. 9, 2016, to Mail Fraud and Money Laundering-Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activities.

Beginning in 2008 through about 2014, Kostelecky embezzled income from a trust fund that was set up by his parents. Kostelecky was appointed that head of the family trust following the passing of his parents and was instructed to evenly divide mineral royalties to each family member. Kostelecky would alter the IRS tax form 1099 that he would receive from the oil company to identify a lower amount. Kostelecky would then conceal the misappropriated amount by transferring the undistributed funds to multiple bank accounts that he controlled.

This case was investigated by the US Postal Inspector and the Internal Revenue Service.

Assistant US Attorney Cameron Hayden prosecuted the case.

Updated February 24, 2017

Financial Fraud