April 02, 2010 5:30 PM
The president of a now-defunct Texas oil company that sold stolen petroleum from Mexico’s state-run oil monopoly is expected to plead guilty to conspiracy charges next month, according to court records.
Tim Brink, the former head of Houston-based Continental Fuels, is the latest South Texas oilman to face charges in a probe that has implicated at least four other businesses.
Federal prosecutors allege Brink knew the more than 26 tankers’ worth of natural gas condensate his company purchased from middlemen in the Rio Grande Valley from 2008 to 2009 had been illegally tapped from pipelines run by Petróleos Mexicanos.
Continental Fuels then sold the pilfered petrol to larger companies operating across the United States, including the German chemical giant BASF, said U.S. Immigration and Customs Enforcement agents. Condensate is a precursor to petroleum products.
For years, criminals south of the border have siphoned off thousands of gallons from government-run pipelines, using highly sophisticated techniques such as tunneling under existing pipes and building their own shadow lines. In 2008 alone, Petróleos Mexicanos — better known as Pemex — found nearly 400 illegal connections in rural states like Tamaulipas, Veracruz and Nuevo León.
Tamaulipas state police arrested nine men in Reynosa last year on suspicion of transporting stolen condensate across the border with help from the Zetas, a Miguel Alemán-based drug cartel that has recently expanded into other criminal rackets.
And within months, U.S. federal investigators zeroed in on those buying the $46 million in stolen product. The probe led them to several South Texas middlemen selling to Brink’s company.
According to court documents, men like 29-year-old Jonathan Dappen, of the McAllen-based Petro Salum, brokered transactions with Continental Fuels to bring the stolen condensate across the border on tanker trucks and then deliver it to the Port of Brownsville.
Dappen pleaded guilty to conspiracy charges last year along with two other business owners — Arnold Maldonado, president of Edinburg-based Y Oil and Gas, and Steven Pechenick, president of the San Antonio-based Valley Fuels Ltd., which also has offices in McAllen.
Pechenick said during his re-arraignment hearing that he was immediately suspicious when he was approached by a Mexican import-export company looking to sell condensate to a U.S. buyer. As a government-managed commodity, oil and natural gas products are traditionally sold through more regulated means.
“At the time, I was aware how things were done in Mexico,” he said. “I suspected that the material was stolen, yet I went ahead and facilitated the sale of this material to Continental.”
Once the condensate was brought to Brownsville, Continental would allow it to accumulate before shipping it on barges to larger oil businesses, including Oklahoma-based Murphy Energy and BASF, the largest chemical company in the world. From January to March 2009, Brink’s company is believed to have made as much as $200,000 in profit off those sales, court records indicate.
Companies like BASF and Murphy may not have been aware they were dealing with stolen product, prosecutors have said. But in addition to Brink, at least one other executive — Donald Schroeder, president of Houston-based Trammo Petroleum — has admitted to knowing the condensate was stolen.
He agreed to reimburse the Mexican government $2.4 million in August as part of an accord with prosecutors.
Brink faces one count of conspiracy to receive and sell stolen goods and is scheduled for a re-arraignment hearing May 14. His attorney did not return calls for comment this week.
Should he plead guilty, he would face up to five years in prison and $250,000 in fines along with Dappen, Maldonado, Pechenick and Schroeder, all of whom are set for sentencing later this year.
Source: http://www.themonitor.com/news/oil-37078-texas-company.html
The president of a now-defunct Texas oil company that sold stolen petroleum from Mexico’s state-run oil monopoly is expected to plead guilty to conspiracy charges next month, according to court records.
Tim Brink, the former head of Houston-based Continental Fuels, is the latest South Texas oilman to face charges in a probe that has implicated at least four other businesses.
Federal prosecutors allege Brink knew the more than 26 tankers’ worth of natural gas condensate his company purchased from middlemen in the Rio Grande Valley from 2008 to 2009 had been illegally tapped from pipelines run by Petróleos Mexicanos.
Continental Fuels then sold the pilfered petrol to larger companies operating across the United States, including the German chemical giant BASF, said U.S. Immigration and Customs Enforcement agents. Condensate is a precursor to petroleum products.
For years, criminals south of the border have siphoned off thousands of gallons from government-run pipelines, using highly sophisticated techniques such as tunneling under existing pipes and building their own shadow lines. In 2008 alone, Petróleos Mexicanos — better known as Pemex — found nearly 400 illegal connections in rural states like Tamaulipas, Veracruz and Nuevo León.
Tamaulipas state police arrested nine men in Reynosa last year on suspicion of transporting stolen condensate across the border with help from the Zetas, a Miguel Alemán-based drug cartel that has recently expanded into other criminal rackets.
And within months, U.S. federal investigators zeroed in on those buying the $46 million in stolen product. The probe led them to several South Texas middlemen selling to Brink’s company.
According to court documents, men like 29-year-old Jonathan Dappen, of the McAllen-based Petro Salum, brokered transactions with Continental Fuels to bring the stolen condensate across the border on tanker trucks and then deliver it to the Port of Brownsville.
Dappen pleaded guilty to conspiracy charges last year along with two other business owners — Arnold Maldonado, president of Edinburg-based Y Oil and Gas, and Steven Pechenick, president of the San Antonio-based Valley Fuels Ltd., which also has offices in McAllen.
Pechenick said during his re-arraignment hearing that he was immediately suspicious when he was approached by a Mexican import-export company looking to sell condensate to a U.S. buyer. As a government-managed commodity, oil and natural gas products are traditionally sold through more regulated means.
“At the time, I was aware how things were done in Mexico,” he said. “I suspected that the material was stolen, yet I went ahead and facilitated the sale of this material to Continental.”
Once the condensate was brought to Brownsville, Continental would allow it to accumulate before shipping it on barges to larger oil businesses, including Oklahoma-based Murphy Energy and BASF, the largest chemical company in the world. From January to March 2009, Brink’s company is believed to have made as much as $200,000 in profit off those sales, court records indicate.
Companies like BASF and Murphy may not have been aware they were dealing with stolen product, prosecutors have said. But in addition to Brink, at least one other executive — Donald Schroeder, president of Houston-based Trammo Petroleum — has admitted to knowing the condensate was stolen.
He agreed to reimburse the Mexican government $2.4 million in August as part of an accord with prosecutors.
Brink faces one count of conspiracy to receive and sell stolen goods and is scheduled for a re-arraignment hearing May 14. His attorney did not return calls for comment this week.
Should he plead guilty, he would face up to five years in prison and $250,000 in fines along with Dappen, Maldonado, Pechenick and Schroeder, all of whom are set for sentencing later this year.
Source: http://www.themonitor.com/news/oil-37078-texas-company.html
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