North Dakota oil executive pleads guilty to fraud scheme | Business

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BISMARCK, ND (AP) – A former North Dakota oilfield executive pleaded guilty on Wednesday to fraud charges for misleading shareholders about the value of his company, in a scheme that ultimately left him forced into bankruptcy and resulted in losses of over $ 886 million.

Joseph Kostelecty, of Dickinson, pleaded guilty to one count of wire fraud and securities fraud. He faces up to 40 years in prison when he was sentenced on January 10. Prosecutors dropped four counts of wire fraud as part of the plea deal.

Kostelecty, 60, was the senior U.S. executive at Poseidon Concepts Corp., a fluid storage tank supplier based in Calgary, Alta. Prosecutors say he made false and misleading statements about the company’s finances in order to inflate its stock price.

Specifically, Kostelecty has been accused of bringing in around $ 100 million in revenue from long-term contracts that either did not exist or that Poseidon Concepts could not have collected. The company’s shares plunged and were forced into bankruptcy in 2013.

“Today’s guilty plea demonstrates that business leaders are not exempt from justice,” said Eric Shen, of the US Postal Inspection Service.

Defense attorney Markus Powell did not immediately respond to an email seeking comment.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


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