Dallas Man Sentenced to 41 Months in Federal Prison and Ordered to Pay $1.4 Million in Restitution for Corporate Embezzlement Scheme
DALLAS — Kristopher Brian Anderson, 32, of Dallas, Texas, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 41 months in federal prison and ordered to pay $1,412,424.06 in restitution, following his guilty plea in September 2017 to offenses related to a scheme to defraud Pivotal Petroleum Services LLC, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. The total restitution figure included the total amount of funds stolen, as well as additional funds spent to investigate Anderson’s theft of his employer’s funds.
Anderson pleaded guilty to one count mail fraud. Judge Fitzwater ordered Anderson to surrender to the Bureau of Prisons on April 24, 2018.
According to the plea agreement factual resume, Tailwater Capital LLC was a Texas corporation, based in Dallas, Texas that specialized in raising private equity capital for oil and gas investments. Pivotal Petroleum Partners LP and Pivotal Petroleum Partners II LP were privately held Texas corporations, based in Dallas, Texas that specialized in acquiring and leasing non-operating working interests of oil and gas properties. Tailwater Capital LLC owned Pivotal Petroleum Partners LP and Pivotal Petroleum Partners II LP.
P2 Energy Solutions was a privately held company, based in Denver Colorado, with Texas offices in Houston, San Antonio and Fort Worth. P2 Energy Solutions provided various administrative services to the oil, gas and energy industry including financial and accounting management software for revenue processing and check distribution. Pivotal Petroleum Services LLC handled the administrative and accounting services of Pivotal Petroleum Partners LP and Pivotal Petroleum Partners II, LP. Pivotal Petroleum Services LLC in tum used the services of P2 Energy Solutions to electronically process incoming vender invoices and to physically prepare hard copy checks payable to the companies listed on the invoice. P2 Energy Solutions then caused checks prepared by P2 Energy Solutions to be sent via the United States Postal Service to the addresses printed on the checks or delivered by a private courier services all at the direction of Anderson.
Empery Resource Consultants, LLC (Empery) was a Texas corporation which Anderson secretly set up and used as part of the scheme to embezzle Tailwater Capital Funds. Over a 33 month period, Anderson repeatedly submitted fraudulent invoices to Pivotal Petroleum Partners falsely claiming payment to Empery Resource Consultants for “landmen” services that were never provided to Pivotal Petroleum Partners.
On May 14, 2014, according to the factual resume, Anderson was hired by Pivotal Petroleum Services as the corporate controller. As controller, Anderson was responsible for the accounting operations of Pivotal Petroleum Partners LP and Pivotal Petroleum Partners II LP. These duties involved the preparation of financial reports, maintaining records involving the receipt and disbursement of funds to ensure that the reported results comply with the generally accepted accounting principles. These duties included the review and approval of vender invoices for payment. As controller, Anderson was clearly responsible to monitor and protect the assets of the Pivotal Petroleum companies. Instead, Anderson used his position of trust as corporate controller to betray his employer Tailwater Capital and ultimately caused total losses of over $1.4 million to Tailwater Capital.
On August 28, 2014, Anderson opened a business bank account in the name Empery Resource Consultants, LLC. Anderson used this account to deposit and later spend funds fraudulently obtained Pivotal Petroleum Partners LP and Pivotal Petroleum Partners II LP.
From August 2014 and continuing through May 2017, Anderson submitted 142 fraudulent invoices causing the fraudulent payment of $1,389,991. Simply put, Anderson stole over $1.3 million from his employer. During the approximately 33 month scheme, Anderson spent funds stolen from Pivotal Petroleum Partners LP and Pivotal Petroleum Partners II, LP to support a lavish lifestyle. Anderson fraudulently obtained an average of over $86,000 per month. Among other things, these expenses included $451,683 in total cash withdrawals and $958,091 in credit card and debit card charges.
The United States Postal Inspection Service, Fort Worth investigated the case. Assistant U.S. Attorney David Jarvis prosecuted.
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