News : Former Basic employees plead guilty : Sidney Herald, Sidney, Montana

Former Basic employees plead guilty

Published on Thursday, August 19, 2010 6:30 PM MDT

Former Basic Energy Services employees Douglas Pierce, Sidney, and Ricky Wolla, Minot, N.D., have pleaded guilty to felony mail fraud in Federal Court Tuesday in Billings. Larry Strouf, Sidney, pleaded guilty on Wednesday. Basic Energy Services is a Midland, Texas, based company servicing oil well sites in the area.

Pierce, Strouf and Wolla admitted to using a series of false invoice schemes to steal more than $500,000 in goods and services from the company involving several local businesses in Sidney and Williston, N.D. The embezzlement scheme took place from at least August 2005 until their termination in December 2008.

According to court documents, Pierce, area manager of Basic Energy until his termination, admitted to taking at least $278,000. Wolla, who was regional vice president for the company, received about $165,000 in goods. Strouf, a supervisor in Sidney, received at least $44,000.

Court documents stated that by using the false invoices scheme, the three men purchased snowmobiles, guns, enclosed trailers, ATVs, vehicle grill guards, furnaces, vehicle restorations, tractors, bobcats, tires, diesel fuel, boats, plasma TVs, PlayStations, a shop washing machine and numerous other items.

The scheme was essentially a false invoicing fraud that was accomplished in conjunction with local small businesses and suppliers in Williston, N.D., and Sidney. Wolla said that it began with the local NAPA store in Williston when he was purchasing a personal “ATV pack” at the store for $125. He and the store owner’s son agreed to bill the ATV pack as “hydraulic oil” and bill it to Basic. The business vendor gave Wolla the false invoice, and Wolla prepared a false internal purchase order and mailed it from Williston to Basic at Midland. Basic then mailed a payment check from Texas to the Williston NAPA store, court documents stated.

Pierce said Wolla told him the false invoicing was fine as long as the business vendors agreed to do it. Assistant U.S. Attorney Ryan Archer said in addition to the Williston NAPA store, Wolla and Pierce developed contacts at several other local businesses that would prepare false invoices for them.

The U.S. Attorney's Office said the false invoices totaled more than 100.

Pierce admitted that in most instances he instructed the business vendors what to write on their false invoices and how to structure the bills. He then took the invoice, wrote up a false purchase order and sent both to Midland for payment. Basic then wrote checks to the individual vendors and mailed them back to Sidney and Williston. In many instances, Pierce instructed vendors to create fairly elaborate false invoices, and the vendors simply agreed to the false representations, Archer said.

While these business vendors knew they were signing off on falsely billed goods, they either thought the goods would ultimately be used for Basic operations and this was just how Pierce explained they needed to be billed, or thought Pierce owned Basic, and this is just how he wanted the invoices written up, Archer said.

Six businesses have admitted to preparing false invoices and have identified specific false invoices that were prepared at the defendants’ request. These business owners agreed to full cooperation in the case and to pay a criminal penalty of 20 percent of the amount each one falsely invoiced. These people include Tami Christensen from Tri-County Implement; Todd Dehner from Dehner's Welding; Rodney Kalberer from Kalberer's Heating; Terry Knaff, of PATH Appliance; Jacolyn Washechek of 1st Choice Collision; and Paul Tjelde of Lee's Tire.

When Basic became aware of the scheme in December 2008, it began an audit of the activities at Williston NAPA. The owner admitted his role. An anonymous tip also spurred a corporate audit that uncovered the fraud.

While Pierce, Wolla and Strouf have pleaded guilty, Stuart Kringen, Williston, has pleaded not guilty. William Myers, Williston, who worked for NAPA in Williston, and David Pope, Sidney, of Yellowstone Welding, have pleaded not guilty to misprision of a felony, which is knowing a crime and hiding it.

Pierce, Wolla and Strouf face possible penalties of 20 years in prison, a $250,000 fine and at least three years supervised release. Sentencing for Pierce and Strouf has been set for Nov. 18 and Dec. 1 for Wolla. They are currently released on special conditions.

Basic Energy Services is suing Pierce, Wolla and Strouf and others in a federal civil fraud case which is presently on hold pending the criminal case.

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Comments

The following are comments from the readers. In no way do they represent the view of the Sidney Herald.

Shocked wrote on Sep 2, 2010 5:01 PM:

" To "Frustrated" I can't believe what you wrote. Are you kidding?? It's okay to knowingly do something illegal? And for the record the obvious answer to whether the business should go along with the Basic employee in the deception is NOT something to do for the money/business end. The obvious answer is to tell them to take their business elsewhere and you (the business) will take their chances and deal honestly with all the other oil companies in the area. How about that concept?? "

Really wrote on Aug 31, 2010 12:01 PM:

" Instead of worrying about losing business and money for themselves...why didn't those businesses think about doing the right thing instead of giving into these criminals? Wouldn't Basic have more reason to do business with honest people helping them find out about this scam? An outstanding community member doesn't go along with criminal activity to get business, they stick up for what is right and do the moral and just thing. "

frustrated. wrote on Aug 30, 2010 2:42 PM:

" Many of the involved local businesses did not see profit for the false invoicing. You can't be to quick to judge when you do not know the numbers behind the "facts" in the paper. Many of the involved businesses simply complied to what was asked of them, in fear of losing business with Basic. This however, doesn't make it right. What was done by the businesses was wrong.

With that being said, put yourself in the business owner's shoes; a vital customer intructs you to create a false invoice. Now what? The obvious answer is to you and I is deny them, and risk losing their business. But to a business owner it becomes more. The simple denial of creating false invoices is complicated by the possibility of losing a vital customer, and possibly your own small business.

I think that what was done by the businesses was indeed wrong. Those involved should be punished for their actions. However, many of these small business owners that "screwed" the big company, are the criminals that donated to help fund different events in the area and community. Many of these businesses have done more than their fair share to help the local community. My point is yes, they did wrong, and should be punished for it. This doesn't make them bad people and I would still consider many of them to be outstanding community members. "

Windy wrote on Aug 25, 2010 1:49 PM:

" Another sad thing is the loss of wages for the Basic employees. After all this came out, people took their business elsewhere and it wasn't so good for those of us in Williston or Sidney. Our hours were cut alot and our families suffered. I'm sure Wolla and the rest didn't concern themselves with that. And I'm sure none of us will get restitution for any of that. "

Frustrated Me wrote on Aug 23, 2010 5:39 PM:

" As adults we should all know the difference between right and wrong. If you are tempted, then maybe you need to do something else. I'ts called self control and personal responsibility. I refer to Pierce, Wolla and Strouf. You can't blame others for your lack of self control and greed. "

Wrong wrote on Aug 22, 2010 9:28 AM:

" I am sorry these people all knew what they were doing was wrong. These men came to the business and purchased one thing and asked the business owner to bill the company for something else. All these people saw a chance to screw the big company and they took the chance, and got caught, they should have to pay Basic back every penny of the money they stoll, and should have to give Basic back any of the items they still have. "

Cheri wrote on Aug 21, 2010 9:30 PM:

" No all of the businesses that are named where aware of false invoicing. Only a handful of these where actually aware that this was going on. We shouldn't place judgement against these businesses in Sidney as people only know what they read and aren't really aware of all of the truth. Give some of these small businesses a break. They are what keep this town going. Or are most of you just shopping out of town. We are small businessowners are not out to make an extra dime. SOME of us just want to survive in this community and would love to have our town people support us. That is something us as small businessowners need to have, COMMUNITY SUPPORT! So instead of running your mouth be supportive.
People should not be quick to judge. "

Screwed wrote on Aug 21, 2010 8:45 AM:

" Stealing isn't right. As far as I am concerned these culprits and corrupt businesses stole from me and I will not beckon their doorway. As a royalty owner these charges were charged to production costs. I find it interesting that restitution is being order to the government and Basic. Basic made a profit and that probably prompted to the theft. I would just like to know if there is any schedule to return any of the service charges I incurred by this scheme. This just goes to show you how corrupt greed is. "

citizen wrote on Aug 20, 2010 1:57 PM:

" How true, if the businesses had said 'No' none of this would have taken place, but GREED takes over and everyone is going to make a dime any way they can...should be a lot of people not able to sleep at night. "

Randy wrote on Aug 20, 2010 1:04 PM:

" To "Just wondering" - You have to remember that these are just the Criminal charges. The civil suit has been placed on hold, and I'm pretty sure that Basic can add more defendants to their suit. "

just wondering wrote on Aug 19, 2010 2:43 PM:

" Whatever happened to Pierce's wife? Was she not charged too,thought I had read that somewhere. I still think that the businesses that helped in all this did not have to pay back more, all because they were willing to be witnesses!!! Sad..... "

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