Former Energy Company Executives Arrested for Embezzling more than $1 Million from Employer
HOUSTON - Federal charges have been filed against the former CEO and former President of Chase Power Development alleging conspiracy to commit mail and wire fraud, mail fraud and wire fraud, announced U.S. Attorney Kenneth Magidson announced today.
John Upchurch, of Spring, was taken into custody yesterday and made his initial appearance before U.S. Magistrate Judge Mary Milloy, at which time he released upon posting $20,000 bond. Kathleen Smith, of Austin, surrendered to authorities this morning and will make her initial appearance before Judge Milloy at 10 a.m.
The 18-count indictment charges Upchurch, 52, and Smith, 46, with one count of conspiracy to commit mail and wire fraud, five counts of mail fraud and 12 counts of wire fraud.
According to the allegations in the indictment, from approximately June 2008 to June 2 012, Upchurch and Smith embezzled approximately $1,325,306.92 from Chase Power Development LLC. Chase Power was an oil and gas project created by Houston-based Quintana Capital Group in order to head start an oil and gas project in Corpus Christi.
In July 2008, Upchurch and Smith were hired as CEO and president, respectively, of the Chase Power Development project.
Throughout their employment, the defendants allegedly submitted false invoices for fake projects in order to receive company funds for their own personal expenses to include personal travel, hotels, country club memberships, personal car restoration, fishing equipment and a hunting trip. According to the allegations, Smith and Upchurch either mailed the company checks upon issuance or personally took the checks to the merchants.
In addition, the defendants allegedly used their company American Express credit cards for their own personal purchases. The indictment alleges Upchurch and Smith would segregate their illegitimate American Express expense account summaries and self-approve them for payment on personal items and expenditures.
If convicted of conspiracy to commit mail and wire fraud, they face up to 20 years in federal prison. Each conviction of either mail or wire fraud also carries up to 20 years of imprisonment. Upon conviction, the charges also carry a maximum possible $250,000 fine.
The FBI conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.