A Billings man who worked for Signal Peak Energy admitted in federal court this week to an embezzlement scheme that defrauded three coal companies of more than $20 million, and for lying to investigators about a false abduction.
Larry Wayne Price Jr., 38, pleaded guilty to three counts of wire fraud, conspiracy to commit money laundering, and for making a false official statement. Price was released pending sentencing.
The investigation included the FBI, the IRS and the Montana State Auditor.
U.S. Attorney Kurt G. Alme said that over two years, from 2016 to 2018, Price embezzled roughly $20.3 million from three coal-related companies. During that time, he served as vice president of surface activities at Signal Peak Energy. He also operated a private business dubbed 3 Solutions LLC, which was involved in coal mining and provided chemicals to Signal Peak Energy.
Price allegedly defrauded Ninety M LLC, a Wyoming company of investors looking to invest large sums in coal-mining projects; Three Blind Mice LLC, another Wyoming company with investors seeking to invest in mining; and Signal Peak Energy.
Price developed a reputation in Billings as a coal mining expert. Based on his reputation, he convinced Three Blind Mice to lend him $7.5 million. Price maintained that 3 Solutions had secured a contract with a Pennsylvania coal company to install coal mining equipment.
To complete the project, Price claimed he needed $7.5 million for expenses. Three Blind Mice agreed and signed an unsecured promissory note. It also wired 3 Solutions the funds, but Price defaulted on the loan on Jan. 31, 2017.
An investigation found there was no contract between 3 Solutions and a Pennsylvania coal mine, as Price had claimed. Instead, he spent the $7.5 million on unrelated expenses.
In another scheme, Price convinced Ninety M’s investors to appoint him as a representative of the company and help it buy and develop coal-mining property in Virginia. Price engaged in a series of five business deals with other companies on behalf of Ninety M, where he solicited $13.5 million from the firm, of which $10.4 million was fraudulently obtained.
Price was still employed by Signal Peak Energy at the time, and he fraudulently induced that company to buy coal-related equipment, knowing that the equipment would never be provided.
Prosecutors said the firm funneled money to Price through a bank account registered to 3 Solutions. The scheme defrauded Signal Peak Energy of about $2.3 million.
In April, investors with Ninety M began to question the transactions involving Price. They also confronted Price on the phone. By April, he was living in Virginia – his original home. He later hid as investors came looking for him.
As a result, Price’s wife reported him missing to Virginia authorities. When they located him, he falsely claimed that he’d been kidnapped by men associated with an outlaw motorcycle gang.
In statements to the FBI and IRS that April, Price said he’d been approached by an unknown man who discussed selling him a motorcycle. Price agreed to meet the man at a park-and-ride, where he was confronted by two men in a windowless van who pointed a gun at him.
Price claimed the second man applied a soaked rag to his face, leaving him disoriented. Price said the men took him to an unknown location and left him in a dark room. He said the men threatened him and later threw him from the moving van.
Prosecutors said Price’s story was a fabrication, accounting to lies to the FBI and IRS.
Price faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud and conspiracy counts. He also faces a maximum five years in prison, a $250,000 fine and three years of supervised release for making an official false statement.
Price also faces the forfeiture of real and personal property derived from the crimes, including a $20.3 monetary judgment, two Billings residences, three properties in Virginia, a motorhome, boat trailers, watercraft and jewelry.