House Democrats have accused U.S. food and energy corporations of price gouging and “pandemic profiteering” that’s contributed to the largest surge in inflation since the 1980s. Congressmember Frank Pallone said at a House Energy and Commerce Committee hearing Wednesday that corporate executives have unfairly raised prices not only on pandemic essentials like COVID tests, masks and hand sanitizer, but also on staple items like food and fuel.
Rep. Frank Pallone Jr.: “I do think that corporate greed is motivating large companies to use the pandemic and supply chain issues as an excuse to raise prices simply because they can. And a lot of executives brazenly boast to investors about raising prices on consumers without consequences, and these executives are saying they’re going to continue to do so.”
Former President of Energy Company Indicted for Commodities Insider Trading and Kickback Schemes
A federal grand jury in Houston returned an indictment today charging a Texas man for an illegal kickback scheme and a commodities insider trading scheme involving natural gas futures.
According to court documents, Matthew Clark, 54, of The Woodlands, worked as a natural gas trader and as president of an energy company based in Houston. The indictment alleges that Clark conspired with others to receive kickbacks from commission fees paid by Clark’s employer to Classic Energy LLC, a brokerage firm owned and operated by Matthew Webb. In exchange for these commission fee kickbacks, Clark agreed to direct his employer’s trades to Webb’s brokerage.
According to the indictment, Clark conspired with others to misappropriate his employer’s material, nonpublic information and to engage in prohibited commodities transactions, including illegal prearranged trades, in natural gas futures contracts for his own, and his co-conspirators’, personal gain. Clark and his co-conspirators caused prices to be reported, recorded and registered on designated commodities markets that were not true, bona fide prices. The profits from these fraudulent trades were split among Clark and his co-conspirators.
Clark is charged with one count of conspiracy to commit honest services wire fraud, three counts of honest services wire fraud, one count of conspiracy to violate various provisions of the Commodity Exchange Act, two counts of prohibited commodities transactions and two counts of insider trading. The defendant will make his initial court appearance before a U.S. Magistrate Judge in the U.S. District Court for the Southern District of Texas. If convicted, he faces a maximum total penalty of 130 years in prison for these charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
In a related case, Peter Miller, 41, of Puerto Rico, pleaded guilty to conspiracy to commit commodities fraud today. Miller, who is alleged to be one of Clark’s co-conspirators, is scheduled to be sentenced on May 12.
In four other related cases, Marcus Schultz, 41, of Houston; John Ed James, 51, of Katy, Texas; Webb, 51, of Tiki Island, Texas; and Lee Tippett, 62, of Jacksonville, Florida, pleaded guilty on July 20, 2020, Feb. 1, 2021, June 15, 2021, and Aug. 17, 2021, respectively. Schultz pleaded guilty to a one-count information charging him with conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act.
James pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and wire fraud. Webb pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and wire fraud and to violate various provisions of the Commodity Exchange Act. Tippett pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and honest services wire fraud.
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Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer Lowery for the Southern District of Texas; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Acting Special Agent in Charge Richard A. Collodi of the FBI’s Houston Field Office; and Special Agent in Charge Richard Gross of the IRS-Criminal Investigation’s Houston Field Office made the announcement. The FBI’s Houston Field Office and IRS-Criminal Investigation’s Houston Field Office are investigating the case. Assistant Chief Leslie S. Garthwaite and Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section, and Deputy Chief Suzanne Elmilady and Assistant U.S. Attorney Zahra Fenelon of the U.S. Attorney’s Office for the Southern District of Texas are prosecuting the case.
Justice Department and U.S. Department of Agriculture Launch Online Tool Allowing Farmers, Ranchers to Report Anticompetitive Practices
Today, the U.S. Departments of Justice and Agriculture (USDA) launched farmerfairness.gov, a new online tool that allows farmers and ranchers to anonymously report potentially unfair and anticompetitive practices in the livestock and poultry sectors.
The launch of the new portal will advance the goals of Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain, including by creating more competitive agricultural markets that are fairer to producers and consumers.
As part of the agencies’ enforcement partnership, the agencies are signing an interagency Memorandum of Understanding to further foster cooperation and communication between the agencies and effectively process the complaints received through the portal.
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