Risk Management

CFO’s 25-Year Sentence Upheld on Appeal

Court shoots down Jonathan Nelson, formerly of Patterson-UTI, on claim that federal sentencing guidelines were ignored.
Stephen TaubOctober 18, 2007

A federal appeals court had upheld the 25-year prison sentence of the former chief financial officer of a Texas energy company.

Jonathan Dwane Nelson, who last year pled guilty to embezzling $77 million from Patterson-UTI Energy, had argued that his prison term fell outside federal sentencing guidelines, according to the Associated Press. The 5th U.S. Circuit Court of Appeals in New Orleans ruled that the sentence was reasonable.

Nelson pleaded guilty last year to one count of wire fraud and aiding and abetting, and one count of engaging in monetary transactions derived from unlawful activity and aiding and abetting, AP wrote at the time. He reportedly spent the money on an airplane, an airfield, a cattle ranch, a truck stop, homes, and vehicles.

When he was sentenced last October, Nelson was also fined $200,000 and ordered to pay about $77 million in restitution, minus the money that was recouped from the sale of assets Nelson had purchased with the stolen money.

Speaking in court before the sentencing, Cloyce Talbot, president and CEO of the oil and gas drilling company, called Nelson a “sophisticated, high-dollar con man,” who before the embezzlement came to light had become “like a son to me,” the earlier AP story said.

“I’m not here to talk about money: What we’ve lost can’t be measured in dollars,” Talbot reportedly added. “[Nelson] stole reputations that I will not live long enough to rebuild. I can’t tell you how many people he betrayed.”

Nelson told the court that the embezzlement was “not fueled by greed or maliciousness,” he reportedly told the court. “I am truly very sorry and ashamed of my betrayal.”

At the sentencing U.S. District Judge Sam Cummings said, “We are at a crossroads in America where malfeasance in corporate America has reached an all-time high. This type of conduct simply cannot be tolerated in our society,” AP reported.

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