US Sentences Senior Oil Executive To 3 Years For Securities Fraud Scheme - DOJ

US Sentences Senior Oil Executive to 3 Years for Securities Fraud Scheme - DOJ

Joseph A. Kostelecky, 61, a former senior executive of a publicly traded Canadian oil services company, has been sentenced to three years in prison for devising a scheme to inflate the firm's reported revenue that led to more than $886 million in shareholder losses, the US Department of Justice said Tuesday

WASHINGTON (Pakistan Point News / Sputnik - 05th April, 2022) Joseph A. Kostelecky, 61, a former senior executive of a publicly traded Canadian oil services company, has been sentenced to three years in prison for devising a scheme to inflate the firm's reported revenue that led to more than $886 million in shareholder losses, the US Department of Justice said Tuesday.

"Kostelecky, of Dickinson (North Dakota), engaged in a scheme to defraud while serving as the highest-ranking U.S. executive of Poseidon Concepts Corporation (Poseidon) from approximately November 2011 to December 2012," prosecutors said in a press release. "Kostelecky previously pleaded guilty on Oct. 13, 2021, admitting that, in his role, he caused Poseidon to falsely report approximately $100 million in revenue from purported long-term contracts with oil and natural gas companies that were Poseidon's customers."

The executive directed Poseidon's accounting staff at the US corporate headquarters in Denver, Colorado, and its field office in Dickinson, to record nonexistent revenue from certain contracts and then assured his bosses the revenue was collectable, although the contracts didn't exist and the revenue would never be able to be collected, prosecutors added. Kostelecky told prosecutors he concocted the fraudulent scheme to overstate the company's stock price so he could continue to receive compensation and inflation of the stock and stock options he owned.

In addition to his prison sentence, Kostelecky was ordered to pay $406.2 million in restitution.