Former employee sentenced for fraud
A federal judge this week sentenced a Denver man to 27 months behind bars for perpetrating an elaborate decade-long scheme to defraud Xcel Energy and the IRS — money he used to buy an SUV, golf supplies and cigars, it was announced Friday.
U.S. Attorney Jason R. Dunn said in a news release that as part of Stephen Yobst’s federal prison sentence, the 64-year-old certified public accountant, who worked for Xcel for years, was ordered to pay more than $1.1 million in restitution.
Yobst will also be subject to 3 years of supervised release for his crimes, which include wire fraud, conspiracy to defraud the United
States, filing false tax returns and theft of government funds.
He pleaded guilty to the charges last September. He was sentenced on Monday.
“The defendant not only created and operated a complex scheme to steal from his employer, he stole from all of us as taxpayers,” Dunn said. “Thanks to the great work of IRS – Criminal Investigation, the FBI, and the team in my office, he’s going to have time in a federal prison to think about his conduct.”
Prosecutors say that Yobst, who worked for Xcel as a sourcing and purchasing manager, partnered with James Brittain to “divert, use and convert funds for their own personal benefit without Xcel’s authorization” by setting up a company called Pacific Exchange Group (PEG) through which the men would hold the proceeds Xcel accrued on the sales of the utility’s properties, like vehicles and transformers.
PEG entered into “master exchange agreement” with Xcel that allowed the utility to postpone paying taxes on gains from the sale of assets if the sales were reinvested in similar property as permitted by the IRS.
Yobst, representing Xcel, negotiated with Brittain, who represented PEG, over Xcel’s assets. The utility deposited the proceeds from the sale of its transformers and fleet vehicles with PEG and PEG was to hold the funds until directed by Xcel to distribute them for the purchase of replacement assets. Xcel agreed to pay PEG a 5% commission on the sale price for vehicles and a 12% commission for transformers.
The scheme, which began in 2005, continued through May of 2015, the government contends.
The diversion of funds included transfers from the PEG account to a Scottrade Account for $400,000, which was used by Yobst and Brittain to trade stocks; $363,966 in payments to American Express for Yobst’s personal expenditures; and a $42,250 wire transfer from Yobst to an automotive dealer to purchase a 2011 Honda Pilot.
Additionally, between March 2011 and October 2014, Yobst, acting as PEG’s accountant, transferred $10,500 a month from the PEG bank account to an account Yobst personally controlled. Yobst used a PEG American Express credit card to pay for golf supplies, leisure travel, cigars, and other items, but did not report these disbursements on his taxes, prosecutors said.
Yobst was ordered by U.S. District Court Judge R. Brooke Jackson to pay restitution totaling $1,167,273, with $806,216 going to Xcel and $361,057 going to the IRS.
Brittain was sentenced in June 2019 to a year and a day in prison followed by 3 years of supervised release on charges of wire fraud, aiding and abetting, and conspiracy to defraud the United States.
He was also ordered to pay restitution to Great American Insurance Co. in the amount of $806,216 and to the IRS in the amount of $215,094.