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United States v. Mark Radley, et al. - Court Docket Number: 4:08-cr-00411
The case is assigned to the Hon. Judge Gray H. Miller, United States District Judge for the Southern District of Texas, United States Courthouse, 515 Rusk Avenue, Houston, Texas, 77002. Trial is set for October 5, 2009 at 2:00 p.m. before Judge Miller in Courtroom 9D, 9th Floor, with the final pre-trial conference at 10 a.m. Status conferences were held on February 12, February 25 and April 2, 2009. The next status conference is set for May 14, 2009 at 2:00 p.m. before Judge Miller.
Mark David Radley, James Warren Summers, Cody Dean Claborn, and Carrie Kienenberger, former employees of a subsidiary of BP America Inc. (BP America), are charged in a 26-count superceding indictment charging each with one count of conspiring to violate the Commodity Exchange Act and to commit mail and wire fraud (Count 1: 18 U.S.C. § 371), eleven counts of Commodity Exchange Act violations (Counts 2-12: 7 U.S.C. § 13(a)(2)), and five counts of commodity price manipulation (Counts 13-17: 7 U.S.C. § 13(a)(2)), two counts of cornering or attempting to corner (Counts 18-19: 7 U.S.C. § 13 (a)(2)), and seven counts of wire fraud (Counts 20-26: 18 U.S.C. § 1343). The defendants were originally indicted on October 25, 2007 in a 20-count indictment and were arraigned before Judge Ruben Castillo, United States Judge for the Northern District of Illinois on November 7, 2007. Each was released on a $4,500 surety bond. The superceding indictment, which adds six counts to the October 2007 indictment, stems from a wide-ranging scheme to manipulate and corner the February 2004 TET propane market and to sell TET propane at an artificially inflated index price. The case was transferred from the Northern District of Illinois to the Southern District of Texas, on convenience grounds, in July 2008.
According to the superseding indictment, from February 5, 2004, through at least March 29, 2004, the defendants conspired to manipulate and corner the market for February 2004 TET propane in order for BP America to profit and to know that in the future they could "control the market at will." The conspirators carried out their strategy by buying large quantities of February 2004 TET propane to become the dominant long holder, withholding propane from the market, and causing prices to be artificially inflated by accumulating such a large portion of the available supply that they had pricing power and could cause prices to be artificially inflated.
By the end of February 2004, BP held almost the entire physical inventory of TET propane available. The superseding indictment further alleges that the defendants manipulated the industry benchmark index price for TET propane by becoming the dominant long holder, using specific bidding techniques, and purchasing even more propane at the end of the month, all with the purpose of artificially increasing the price of propane and inflating the industry benchmark index price. The superseding indictment alleges the defendants defrauded counterparties who purchased propane from BP at the fraudulently inflated index price. As a result of the defendants’ conduct, the price of TET propane in the commodities market was artificially inflated during the latter part of February and early March 2004, and as a result, wholesale purchasers of TET propane during this time paid a higher price than would have available but for the defendants’ conduct.
Previously, on June 28, 2006, Dennis N. Abbott, a former trader at BP, pleaded guilty to a one-count information charging him with conspiracy to manipulate and corner the propane market. Furthermore, on October 27, 2007, BP America entered into a deferred prosecution agreement in which it accepted responsibility for conspiring to manipulate the price and corner February 2004 TET propane, and paid approximately $303 million restitution as well as criminal and civil penalties.
The case is being prosecuted by Fraud Section Senior Trial Attorney Jerrob Duffy and Special Trial Attorney Joseph Konizeski, on detail from the Commodity Futures Trading Commission (CFTC), and Assistant United States Attorney Tyler C. Murray, N.D. Illinois.
An Indictment is a formal charge made by a grand jury, a body of 16 to 23 citizens. A grand jury may vote an Indictment if 12 or more jurors find probable cause to believe that the defendant has committed the crime or crimes charged. Despite indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.
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