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Koch’s Oxbow Carbon Lawsuit claims scheme defraud & $MM losses

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This topic contains 2 replies, has 1 voice, and was last updated by  Charles Randall 10 years, 10 months ago.

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  • #1898

    basil parmesan

    Kochs Oxbow Carbon lawsuit alleges ‘scheme to defraud, millions in loses

    By Michele Dargan Daily News Staff Writer
    Posted: 7:59 p.m. Friday, March 23, 2012
    Bill Kochs Oxbow Carbon has filed a lawsuit against three company executives, alleging they defrauded the company by accepting illegal bribes and kickbacks from competing companies.
    The lawsuit says Oxbow Carbon and two of its subsidiaries Oxbow Carbon & Minerals and Oxbow Carbon & Minerals International have suffered substantial damages in the millions of dollars.
    The three executives one based in California and the other two in Asia are alleged to have participated in a wide-ranging scheme to defraud the company and its subsidiaries. The executives, the lawsuit says, used their access to confidential information to promote the business interests of competitors for their own gain.
    Oxbow Carbon, which is based in West Palm Beach, is one of the largest providers of natural gas, coal and petroleum in the world. According to the lawsuit, Oxbow is the largest distributor of petroleum coke in the world, selling significant amounts in Asia.
    The lawsuit, filed Thursday in Palm Beach County Circuit Court, alleges the following:
    Beginning in March 2009, shell companies began secretly buying petroleum coke and coal from two Oxbow subsidiaries with direct involvement from the three executives.
    The shell companies then would resell that petroleum coke or coal at unusually high profit margins sometimes as high as 12 times higher than that which Oxbow charged their customers.
    The executives facilitated those purchases for the benefit of themselves and the shell companies. One of the executives received a secretive monetary payment ($11,400) from Shell Company One for payment of school tuition for his son.
    The executives steered business to a freight company of a known competitor that they had been instructed by their superiors not to use. The freight company inflated the shipping rates to Oxbows customers and put the overpayments into the shell companies for the executives benefit.
    Shell Company One alone, with the active knowledge, assistance and participation of defendants, misappropriated at least $1.2 million in freight payments from plaintiffs legitimate customers.

  • #4675

    Charles Randall

    Here is shocker – Koch’s Oxbow Carbon lawsuit in recent news! Much bigger impact on petcoke these days since many of the former Petcoke marketing/reseller companies were acquired by Oxbow (SSM, Aimcor, GLC, ect)
    So far news items are  only source of what is available in news because Oxbow is in total lockdown mode on this topic.
    Send me email if you have any additional information on topic.

  • #4674

    Charles Randall

    Here is exhert from Argus News on who around who the 3 Oxbow Exec’s were (hard believe Lawrence Black would be one of them – smart guys doing stupid things).
    ……….The suit filed last week claims Kirby Martensen, Lawrence Black and Zhan Wenming, executives at Oxbow Carbon and two affiliate companies, participated in a wide-ranging scheme that used shell companies in Asia to buy petroleum coke and coal from the company and resell it at higher prices. The defendants also allegedly accepted bribes and kickbacks from competing companies.
    Black, who was Martensen and Zhan’s supervisor, did not return a phone call seeking comment. Valid contact information for the other two defendants, who were based in Singapore and China, could not be quickly obtained. A spokesman for Oxbow declined to comment.
    Oxbow filed the suit on 21 March in Palm Beach County Circuit Court. It received information in 2011 that Black and Martensen allegedly were engaging in extensive theft, breaches of fiduciary duty, fraud and self-dealing against the companies by which they were employed.
    According to the lawsuit, beginning on or before March 2009 two shell companies in which the defendants and an unidentified co-conspirator were directly involved would buy petroleum coke and coal in Asia from Oxbow at prices usually reserved for preferred customers. Those companies would then resell the product to third-party Asian customers at prices sometimes as much as 12 times above Oxbow’s charge, according to the lawsuit.
    Martensen, Black and Zhan also allegedly directed business to freight company American Frontier Marine, a known competitor, which overcharged Oxbow customers and credited the excess payments to the shell companies. Beginning in June 2009, one shell company alone diverted at least $1.2mn in freight payments from legitimate customers, according to the suit.
    The defendants allegedly received compensation and bribes for their cooperation. In addition, Martensen received tens of thousands of reimbursements for relocation expenses and overseas school tuition when he moved to Singapore last year, not only from Oxbow but also from the companies involved in the fraud, according to the suit.
    Oxbow had employed Martensen since 1996 and promoted him to senior vice president-Asia at Oxbow Carbon & Minerals International in late 2011. Black had worked at the company since 1984 and was executive vice president of worldwide fuel grade petroleum coke with Oxbow Carbon & Minerals, as well as a member and executive vice president of Oxbow Carbon for the past three years. Zhan, also known as Charlie Zhan, started at Oxbow Coal BV in 2008 and most recently was general manager of Oxbow Carbon & Mineral’s Tianjin, China office………..

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