The U.S. Attorney's Office announced a jury convicted Justin Lane Foust, 42, of Sulphur, Oklahoma, of wire fraud, money laundering, and aggravated identity theft in connection with fraud against Chesapeake Energy.
Foust was employed by Chesapeake Operating, Inc, a wholly owned subsidiary of Chesapeake Energy Corporation, from April 2002 until September 2011.
Foust formed Platinum Express, LLC, in July of 2011, which became an approved vendor for Chesapeake Operating in October of 2011.
The indictment alleged that from October 2011 to July 2014, Chesapeake Operating was contracted with Platinum Express primarily to transport waste water.
Evidence showed Foust defrauded Chesapeake Operating by causing Platinum Express to submit false invoices for services it didn't perform.
In particular, he created fraudulent work tickets for steam cleaning, dirt berm work, plating tanks, hauling rock, repairing fence, supplying sand separators, and other services.
Many of the invoices were for amounts under $5,000 which requires a lower level of approval for processing and payment.
It was also found that Foust forged the signature and employee identification numbers of Chesapeake Operating employees to ensure the invoices were processed.
Alleging eight counts of wire fraud, the indictment stated Foust was responsible for over 1,100 fraudulent invoices, which generated over $4.3 million in Chesapeake Operating payments to which Platinum Express was not entitled.
Foust was also charged with two counts of aggravated identity theft based on his alleged use of the names and employee identification numbers of other people without their consent.
He was also charged with one count of laundering money by transferring $43,857.09 to pay for Platinum Express payroll, after at least $10,000 of that transfer had been derived from wire fraud.
Foust was found guilty on six counts of wire fraud, one count of aggravated identity theft, and one count of money laundering. It was unable to reach a unanimous verdict on the two remaining counts of wire fraud and the other count of aggravated identity theft.
Foust could see a maximum of twenty years on each of the wire-fraud convictions, to be followed by three years of supervised release.
Aggravated identity theft carries a mandatory minimum sentence of two years in prison, in addition to any other sentence of imprisonment.
The money-laundering conviction could result in a sentence of ten years in prison, followed by three years of supervised release.
Foust could also be fined up to $250,000 on each count and would be subject to mandatory restitution and to a forfeiture money judgment in the amount of the proceeds of the fraud, which the indictment alleges to be $4,345,619.00.