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 19, Neil B. Kikuchi, terminal manager at General Transport Company (GT), a fuel delivery firm, pled guilty in U.S. District Court in Seattle, WA to charges of conspiracy, money laundering, and theft of interstate shipments in connection with 1.49 million gallons of fuel stolen over a period of several years. On July 17, James R. Ito, a former office worker at GT, pled guilty to the same charges. In March 2006, a grand jury indicted Kikuchi, Ito, and three other individuals -- all employees of Kinder Morgan Energy Partners (KMP), which operates fuel terminals in the Port of Seattle.

Our investigation found that the five conspired to steal fuel from KMP by using a misappropriated maintenance code. Stolen fuel was then sold at or below market rates to unsuspecting owners of fuel service stations operating in the states of Washington, Idaho, and Oregon. The conspirators received approximately $3.9 million in sales of the stolen fuel, and an estimated $750,000 in federal and state motor fuel taxes went uncollected. KMP initially detected the fuel discrepancies through an internal audit in October 2004. Two of the KMP employees pled guilty in April and await sentencing on July 27, 2006. Sentencing for Kikuchi and Ito is scheduled in October. The ongoing investigation is being conducted jointly with the IRS-CID and Port of Seattle Police.