Former California energy company exec given 5 years in prison for $15M investment fraud
Targeted News Service (Press Releases)
Joey Stanton Dodson was sentenced today to five years in prison for defrauding investors of more than $15 million in connection with a scheme to misappropriate investor funds for his own personal use. The sentence was handed down by the Hon. Beth Labson Freeman, U.S. District Judge.
Dodson, 58, formerly of Indio, Calif., pleaded guilty to one count of wire fraud on June 14, 2022. According to court documents, Dodson engaged in a scheme between November 2012 and May 2015 to defraud investors while serving as the executive chairman and managing partner of Citadel Energy Partners, which purported to provide fluid-management services to oil and gas companies.
In his role, Dodson was responsible for raising funds, controlling the bank accounts, and disseminating financial information to investors for three limited partnerships: Fort Berthold Water Partners L.P., Citadel Watford City Disposal Partners L.P., and H20 Partners L.P. As part of the scheme, Dodson made materially false and misleading representations and omissions to prospective and existing investors about the intended use of investor funds, the status of a potential acquisition by a private-equity firm, and Dodson's own compensation.
After inducing victims to invest, Dodson pooled the funds from the limited partnerships and conducted multiple transfers between Citadel-related accounts to divert investor funds for his own benefit and conceal his actions.
In total, Dodson fraudulently raised over $15.6 million from more than 50 investors and misappropriated $1.3 million in investor funds, which he used to pay for his personal expenses and to repay earlier investors in an unrelated entity known as Duke Equity. After Dodson's misappropriation was discovered, the limited partnerships were placed into bankruptcy and the investors suffered a total loss of their investments.
In addition to the prison term, Judge Freeman also ordered Dodson to serve three years supervised release and to pay restitution in the amount of $15,636,392.
U.S. Attorney for the Northern District of California Stephanie M. Hinds, Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department's Criminal Division, and Special Agent in Charge Robert R. Tripp of the FBI San Francisco Field Office made the announcement.
The FBI San Francisco Field Office investigated the case.
Assistant U.S. Attorneys Sarah Griswold and Marissa Harris for the Northern District of California and Trial Attorney Theodore M. Kneller of the Criminal Division's Fraud Section prosecuted the case.
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Original text here: https://www.justice.gov/usao-ndca/pr/former-energy-company-executive-sentenced-five-years-prison-15-million-investment