Three former El Paso Corp. natural gas traders convicted last year of conspiracy, as well as some charges of wire fraud and false price reporting in an attempt to influence published price indexes at the beginning of the decade, received lengthy prison sentences in Houston last Thursday.
Former traders James Brooks, Wesley Walton and Pat Phillips were charged with submitting or directing colleagues to submit false trade information to publications Inside FERC's Gas Market Report and Natural Gas Intelligence from about April 2000 to about May 2002. They each faced one count of conspiracy, 24 counts of false reporting and 24 counts of wire fraud.
U.S. District Judge Melinda Harmon sentenced Brooks, 50, to 168 months in prison to be followed by three years of supervised release. Brooks was ordered to pay a $5,000 fine. Walton, 47, and Phillips, 50, were each sentenced to 135 months in prison to be followed by three years of supervised release; they also were ordered to pay fines of $7,500 each. Brooks, Walton and Phillips remain free on bond pending an order to surrender to a Bureau of Prisons facility yet to be designated.
During last year's two-month trial in U.S. District Court in Houston, prosecutors contended that Brooks ordered the false reporting, Walton directed it and Phillips and other traders carried it out. After deliberating for two and a half days, jurors found Brooks guilty of one count of conspiracy, 22 counts of false reporting and 22 counts of wire fraud. Walton was convicted of one count of conspiracy, 11 counts of false reporting and 11 counts of wire fraud. Phillips was convicted of one count of conspiracy, 10 counts of false reporting and 10 counts of wire fraud (see NGI, Feb. 11, 2008).
In a similar case from the same period, former Dynegy Inc. gas trader Michelle Valencia was sentenced to 57 months in prison and former El Paso trader Greg Singleton was sentenced to 28 months. The two were tried together in Houston (see NGI, Sept 1, 2008). In other cases guilty pleas were submitted by former El Paso traders Todd Geiger (see NGI, Oct. 9, 2006), Christopher Bakkenist (see NGI, Nov. 1, 2004), William Ham (see NGI, Oct. 20, 2004), Donald Guilbault (see NGI, Oct. 19, 2004), Dallas Dean, Donald Burwell (see NGI, Nov. 10, 2008) and former Reliant natural gas trader Jerry Futch (see NGI, March 20, 2006).
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