North Dakota oil exec gets 3-year sentence for fraud scheme
BISMARCK, N.D. (AP) — A former North Dakota oilfield executive whose false claims about his company’s value resulted in more than $886 million in shareholder losses has been sentenced to three years in federal prison and ordered to pay back $406 million.
The government had asked for a 20-year sentence for 61-year-old Joseph Kostelecky before Tuesday’s sentencing hearing in North Dakota.
Kostelecky, of Dickinson, was the highest ranking U.S. executive for Poseidon Concepts Corp., a fluid storage tank supplier based in Calgary, Alberta. Investigators say he made misleading claims about the company’s finances in order to inflate its stock price.
The company’s stock plunged after the fraud was uncovered and it was forced into bankruptcy in 2013.