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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of Texas

FOR IMMEDIATE RELEASE
Wednesday, January 25, 2017

Former Energy Company Executives Convicted in Embezzlement Scheme

HOUSTON - The former president of Chase Power Development has entered a guilty plea to conspiracy to commit mail and wire fraud, announced U.S. Attorney Kenneth Magidson. Kathleen Smith entered her plea today, while co-defendant and former CEO John Upchurch entered his plea earlier this month.

 

Houston-based Quintana Capital Group created Chase Power in order to head start an energy project in Corpus Christi. In July 2008, Upchurch was hired as CEO and Smith as president of that company.

 

From about June 2008 to about June 2012, Upchurch and Smith embezzled a significant amount of money from Chase Power. Throughout their employment with Chase Power, they submitted false invoices for fake projects in order to receive company funds for their own personal expenses, such as personal travel, hotels, country club memberships, personal car restoration, fishing equipment and a hunting trip. Smith and Upchurch either mailed the company checks upon issuance or personally took the checks to the merchants.

 

In addition, the defendants used their company American Express credit cards for their own personal purchases. Upchurch and Smith would segregate their illegitimate American Express expense account summaries and self-approve them for payment on personal items and expenditures.

 

U.S. District Judge Sim Lake accepted the pleas and has set sentencing for April 2017. At that time, both face up to five years in federal prison and/or a maximum possible $250,000 fine. They were permitted to remain on bond pending sentencing.

 

The FBI conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting this case.

Topic(s): 
Financial Fraud
Component(s): 
Updated January 26, 2017