Drumright Man Sentenced for Stealing More Than $400,000 from an Illinois Oil and Gas Company
A Drumright man was sentenced today in federal court for stealing $401, 146 worth of funds and oil and gas products from his former employer, announced Acting U.S. Attorney Clint Johnson.
U.S. District Judge Claire V. Eagan sentenced David Owen West, 59, to 21 months in federal prison followed by three years of supervised release. Judge Eagan further ordered West to pay restitution in the amount of $401, 146 to Petco Petroleum. West previously pleaded guilty to two counts of mail fraud and one count of money laundering. The defendant will self-surrender on Aug. 4, 2021.
“David West ran two criminal schemes against his employer, Petco Petroleum, and pocketed more than $400,000 worth of stolen money and product,” said Acting U.S Attorney Clint Johnson. “West’s criminal acts and deceit finally caught up with him. This convicted felon will spend nearly two years in federal prison thanks to the work of Assistant U.S. Attorney Charles McLoughlin, the special agents of IRS-Criminal Investigation and the FBI, the U.S. Attorney’s Office Asset Forfeiture investigator Don Shoemake, and retired FBI special agent Daniel Risner.”
“I am very proud of the hard work and effort of the women and men of the IRS-Criminal Investigation, the FBI, and the U.S. Attorney’s Office who contributed to the successful prosecution of this individual that culminated in today’s sentencing,” said Acting Special Agent in Charge Mark Pearson, Dallas Field Office. “Mr. West stole nearly a half-a-million dollars from a company that trusted and relied on him. He lied and betrayed their trust for his own personal gain warranting the punishment for his crimes.”
West carried out his schemes at Petco Petroleum, an Illinois oil and gas company where he was employed for nearly 30 years. In one scheme, West produced and submitted to Petco Petroleum fraudulent invoices for services that were never rendered, totaling $129,038, which his employer paid in full and West pocketed. In a second scheme, West hired trucks to haul oil stolen from his employer’s oil leases to a reclaimer who then paid him $266,802 for the oil. Then West charged Petco Petroleum for the transport costs of their own stolen oil.
As field supervisor and oilfield pumper working in Oklahoma for Petco Petroleum (Petco), West checked wells to ensure they were properly functioning and to gauge oil production as well as selected vendors from which the company would purchase products or services needed to operate the wells. In order to be paid by Petco, vendors submitted invoices and documentation for goods or services provided to the company for West’s review and approval. West then mailed the approved invoices to Petco each month to be included in the company’s monthly accounts payable run.
In early 2015, West acquired a property in Drumright, Oklahoma, and on Oct. 27, 2015, legally registered Flash Electric Services, LLC, using the address in Drumright, with the Oklahoma Secretary of State. Flash was used as part of West’s scheme to defraud his employer. From September 2015 to December 2016, West included 116 fraudulent invoices from Flash, totaling $129,038.00, in the monthly documents mailed to Petco for alleged electrical services that were never performed on the company’s Oklahoma oil wells. Based on these invoices, Petco mailed 15 separate checks via the U.S. Mail to Flash in Drumright to pay for the alleged services. All payments from Petco to Flash were subsequently deposited into bank accounts which West controlled.
In addition to the Flash false invoice scheme, West arranged for approximately 50 loads of Petco’s oil to be transported by Lightning Tank Truck and Independent Trucking to U.S. Oil Reclaimers, Inc. West sold and had delivered approximately $266,802 worth of stolen oil to the reclaimer. West directed the company to issue payment to either himself or Flash Services and personally picked up the checks. He then forwarded to his employer invoices for payment from both trucking companies for the cost of the transportation of the stolen Petco oil, totaling $5,306. After West approved the trucking invoices to be paid, Petco issued and mailed checks to both trucking companies.
IRS-Criminal Investigation led the investigation with assistance from the FBI. Assistant U.S. Attorney Charles M. McLoughlin prosecuted the case.