Fuel theft scheme ends in prison sentences
Aug 7, 2006 2:18 PM
A former automation clerk and a former terminal operator at a Kinder Morgan Energy Partners (KMP) terminal in Seattle WA have been convicted and sentenced to prison for a scheme to steal more than 1.49 million gallons of fuel, according to information from the Office of the Inspector General (OIG), Department of Transportation.
Christy Rawls, the clerk, and Andrew D Cutright, the former operator, were ordered to pay $235,360 in restitution and serve 18 months in prison for their participation in the scheme. In March 2006, a grand jury indicted Rawls, Cutright, and three co-conspirators including, a former KMP terminal supervisor and two employees of General Transport Company (a Seattle fuel delivery firm), Neil B Kikuchi and James R Ito.
OIG officials said the agency's investigation found that Rawls facilitated the theft by providing a monthly computation of the terminal's fuel variance (a volume below which theft of fuel would likely escape notice by KMP) and deleting bills of lading from the terminal's computer system, while Cutright entered a misappropriated maintenance code in the system. Kikuchi and Ito then sold the stolen fuel at or below market rates to unsuspecting owners of fuel service stations operating in Washington, Idaho, and Oregon.
The co-conspirators received a total of about $3.9 million in sales from the stolen fuel between 1999 and October 2004, when KMP detected the fuel discrepancies through an internal audit. An estimated $750,000 in taxes also went uncollected. Kikuchi and Ito pled guilty to money laundering, conspiracy, and theft of interstate shipments on July 17, 2006, and await sentencing in October, according to the OIG.
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