A former El Paso Corp. natural gas trader was sentenced Monday to 10 months in prison for reporting bogus trades to industry newsletters in order to affect the price of natural gas, federal prosecutors said.

U.S. District Judge Vanessa Gilmore for the Southern District of Texas also sentenced Donald Burwell of Richardson, TX, to a three-year term of supervised release following his 10-month stint in prison. In February 2006 Burwell pleaded guilty in a Houston district court to violating a provision of the Commodity Exchange Act for his involvement in providing fictitious trading information to Platts’ Inside FERC Gas Market Report (see Daily GPI, March 1, 2006). Burwell, 47, agreed to cooperate with the government in similar cases.

He pleaded guilty to “knowingly” transmitting “inaccurate reports concerning market information about natural gas trades that affected or tended to affect the price of natural gas, a commodity in interstate commerce.” Burwell faced up to five years in prison without parole and a $500,000 fine.

Burwell originally was indicted in November 2004 and charged with one count of conspiracy, one count of false reporting and one count of wire fraud (see Daily GPI, Nov. 30, 2004). But in August 2005 a Houston grand jury returned a superseding indictment that included new charges of false price reporting and wire fraud. The superseding indictment incorporated the original charges and added two counts of false reporting and two counts of wire fraud for allegedly transmitting false trade reports in August 2000 and October 2000 (see Daily GPI, Aug. 26, 2005).

If convicted, he would have faced substantially more prison time and heavier penalties under the superseding indictment.

The charges against Burwell were the result of an investigation conducted by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys John R. Lewis and Belinda Beek of the Southern District of Texas.

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