Investigations

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Two Former Employees Of A Seattle Fuel Delivery Company Plead Guilty In Case Involving Over $3.9 Million Of Stolen Motor Fuel

On July 27, Christy S. Rawls, a former automation clerk at Kinder Morgan Energy Partners' (KMP's) Terminal 18 in the Port of Seattle, and Andrew D. Cutright, a former KMP terminal operator, were each sentenced in U.S. District Court in Seattle, WA were ordered to pay $235,360 in restitution and, serve 18 months in prison for their participation in a scheme to steal more than 1.49 million gallons of fuel. In March 2006, a grand jury indicted Rawls, Cutright, and three co-conspirators including, a former KMP terminal supervisor and two employees of General Transport Company (a Seattle fuel delivery firm), Neil B. Kikuchi and James R. Ito.

Our investigation found that Rawls facilitated the theft by providing a monthly computation of the terminal's fuel variance (a volume below which theft of fuel would likely escape notice by KMP) and deleting bills of lading from the terminal's computer system, while Cutright entered a misappropriated maintenance code in the system. Kikuchi and Ito then sold the stolen fuel at or below market rates to unsuspecting owners of fuel service stations operating in Washington, Idaho, and Oregon. The co-conspirators received a total of about $3.9 million in sales from the stolen fuel between 1999 and October 2004, when KMP detected the fuel discrepancies through an internal audit. An estimated $750,000 in taxes also went uncollected. Kikuchi and Ito pled guilty to money laundering, conspiracy, and theft of interstate shipments on July 17, 2006 and await sentencing in October. The ongoing investigation is being conducted jointly with the IRS-CID and Port of Seattle Police.