Criminal Issues

Criminal Issues

Here we attempt to highlight some of the more interesting and more important issues concerning crimes, grand juries and criminal investigation involving Rural Electric Cooperatives and Rural Telephone Cooperatives and their insiders, management and boards of directors.

Grand Juries, Subpoenas, Fifth Amendment Claims, Felony Indictments, Money Laundering, Theft, Racketeering, Kickbacks, Raids on Coop Headquarters, Coop Managers and Coop Lawyers. It's all there and it's not isolated to one Coop. They aren't your grandfather's Coop anymore.

It's been said that "power corrupts and absolute power corrupts absolutely."

That appears to be so with some of these wealthy, secret and monopolistic cooperatives subject to no effective supervision that have been controlled by the same managers, the same families and the same lawyers for many decades.

Some of these links take you outside of the Coop Litigation News website so we aren't responsible for the content.

Kickbacks & Money Laundering

Pedernales Electric Cooperative (Texas)

Indictments say pair directed co-op money to relatives of PEC executives

Austin American-Statesman
Saturday, June 20, 2009

Indictments unsealed Friday against the former general manager and top outside lawyer at the Pedernales Electric Cooperative say they arranged for thousands of dollars of co-op money to be paid to relatives of PEC executives.

According to the indictments, Bennie Fuelberg, who ran the Johnson City-based co-op for more than 30 years, and lawyer Walter Demond, directed payments exceeding $200,000 to Curtis Fuelberg, who is Fuelberg's brother, and William Price, who is the son of former Director E.B. Price. . . .

Both Fuelberg and Demond are named in the indictments on three identical felony counts — misapplication of fiduciary property, theft and money laundering. . . . Both men are expected to be arraigned next month.

The indictments are the first result of a five-month grand jury inquiry into wrongdoing at PEC, which has more than 229,000 members in Central Texas.

The payments were uncovered last year in a review by Navigant Consulting Inc. . . . [that] found $510,000 in unexplained payments from PEC to Clark Thomas & Winters, which had been the co-op's outside law firm for 70 years.

Grand Jury Felony Indictments

Pedernales Electric Cooperative (Texas)

Grand jury indicts former Pedernales leader, longtime lawyer

Austin American-Statesman
Thursday, June 18, 2009

JOHNSON CITY -- A Blacno County grand jury handed down indictments Wednesday against the former top executive and former top lawyer for the Pedernales Electric Cooperative.

Theft & Racketeering

Cobb Electric Cooperative (Georgia)

Authorities raid Cobb EMC offices

Atlanta Journal-Constitution
Thursday, April 23, 2009

The Cobb County district attorney's office and local and state law enforcement agencies executed search warrants Wednesday at five locations related to the Cobb Electric Membership Corp.

The search warrants, unsealed Wednesday, said agents were seeking evidence related to theft and racketeering at the electric cooperative.

Fifth Amendment

Pedernales Electric Cooperative (Texas)

Subpoenaed Witnesses Evade House Oversight Committee

Cooper and Committee unearth fraud in electric co-op industry--and their lobbyist doesn't like it

WASHINGTON--Congressman Jim Cooper and fellow members of the House Oversight and Government Reform Committee today held a hearing on fraud and abuse in the electric co-op industry, but two key witnesses didn't show. Bennie Fuelberg and W.W. Bud Burnett, the former general manager and president of Texas' Pedernales Electric Cooperative, evaded Congressional subpoenas, indicating through attorneys that if they had testified before Congress they would have invoked their Fifth Amendment right not to self-incriminate.

Fuelberg and Burnett are accused by angry co-op members of stealing millions of dollars of customer money, spending it on their own exorbitant salaries, lavish trips and even second homes in nearby New Mexico. Pedernales' exploits have been documented by reporter Claudia Grisales of the Austin American-Statesman. A civil lawsuit in the case is currently on appeal.

Raids & Subpoenas

Cobb Electric Membership Cooperative (Georgia)

Cobb EMC raids stall image repair

Atlanta Journal Constitution

Sunday, April 26, 2009

Wednesday’s raids on offices and homes connected with Marietta-based Cobb EMC did more than signal a criminal investigation of the embattled electric cooperative’s leaders. . . .

The co-op also continues a legal battle to control a series of court-ordered membership elections that put its current board at risk.

But the stakes for Cobb EMC just went up.

District Attorney Pat Head confirmed Wednesday that his office searched Cobb EMC’s offices and the homes of Cobb EMC Chief Executive Dwight Brown and three of its board members as part of a criminal investigation of theft and racketeering. Authorities sought personal banking and tax records in addition to corporate files related to allegations that co-op officials siphoned its assets for their own benefit. The evidence will be examined by a grand jury.

The move stunned the community. Head isn’t known for drama or grandstanding. And his targets have been known as community pillars for years.

This page was last modified on Tuesday, January 19, 2010

Coop Litigation News

Tracking Legal Events involving Electric & Telephone Cooperatives