Risk Management

Feds Charge Former CFO Accused of Embezzlement

Jonathan Nelson, the former finance chief of Patterson-UTI Energy Inc., now faces criminal charges.
Stephen TaubNovember 18, 2005

Jonathan Nelson, the former chief financial officer of oil driller Patterson-UTI Energy Inc., was charged by federal prosecutors with violating U.S. securities laws by signing off on financial reports that he knew were false, according to Bloomberg. The false financial reports, say prosecutors, were part of an alleged $69 million embezzlement scheme.

The complaint accuses Nelson of defrauding Patterson-UTI by directing payments to a company he controlled, according to the wire service. Nelson is seemingly being charged under the provision of the Sarbanes-Oxley Act that requires the chief executive officer and CFO to certify financial statements. The violation carries a maximum penalty of 20 years in jail, according to Bloomberg, citing Kathleen Colvin, a spokeswoman for the U.S. attorney’s office in Dallas.

Nelson and his attorney, Jeffrey Kearney, appeared on Thursday before U.S. Magistrate Judge Nancy Koenig in Lubbock, Texas. Nelson was allowed to remain free, but he had to turn over his passport and is unable to travel outside Texas’s Northern District, which stretches from Dallas to the Texas Panhandle, according to the report. He will also be monitored electronically, the wire service noted, citing Colvin.

Earlier this week, a federal judge froze Nelson’s assets after the Securities and Exchange Commission accused him of embezzling more than $69 million from Patterson-UTI over a five-year period. The regulator charged the former finance chief with using the funds to purchase an airplane, an airfield, a cattle ranch, homes, vehicles, and a full-service truck stop, as well as other assets.