Former President of Energy Company Sentenced for Over $5.5M Illegal Kickback and Commodities Insider Trading Scheme

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The FINANCIAL — The former president of a Texas energy company was sentenced today to six years and six months in prison for his role in an illegal kickback scheme and a commodities insider trading scheme involving natural gas futures contracts.

According to court documents, Matthew Clark, 56, of Needville, Texas, conspired with others to direct his employer’s trades to Houston-based Classic Energy LLC, a brokerage firm owned and operated by Matthew Webb, 54, of Tiki Island, Texas, in exchange for illegal kickbacks. As part of his prohibited trading, Clark conspired with John Ed James, 54 of Katy, Texas, and Peter Miller, 49, of Puerto Rico. Clark received more than $5.5 million in illegal kickbacks for his trades.

Clark was also ordered to pay $6,532,360 in restitution and to forfeit $5,543,662.

Clark pleaded guilty on March 15 in the Southern District of Texas to conspiracy to commit honest services wire fraud, prohibited commodities transactions, and commodities insider trading. Webb pleaded guilty in June 2021 to conspiracy to commit commodities fraud and wire fraud and to violate various provisions of the Commodity Exchange Act. James pleaded guilty to conspiracy to commit commodities fraud and wire fraud and is scheduled to be sentenced on July 1. Miller pleaded guilty to conspiracy to commit commodities fraud and is scheduled to be sentenced on June 20.

In two other related cases, Marcus Schultz, 44, of Houston, and Lee Tippett, 64, of Jacksonville, Florida, pleaded guilty in July 2020 and August 2021, respectively. Schultz pleaded guilty to conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act and is scheduled to be sentenced on July 1. Tippett pleaded guilty to conspiracy to commit commodities fraud and honest services wire fraud and was sentenced on Feb. 20 to two years and nine months in prison.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas; Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division; and Special Agent in Charge Douglas Williams of the FBI Houston Field Office made the announcement.

The FBI Houston Field Office investigated the case.

Assistant Chief Leslie S. Garthwaite and Trial Attorneys Della Sentilles and David Hamstra of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Grace Murphy for the Southern District of Texas prosecuted the case.