Three men accused of an oil-trading kickback scheme spent millions of dollars in ill-gotten gains on houses, jewelry and cars — including a vehicle previously driven by singer Frank Sinatra, according to documents released by the government Friday.
A 12-count federal indictment alleges that Jonathan Barnes and Clyde Meltzer of Houston, and Bernard Langley of the United Kingdom, pocketed as much as $80 million over several years by overcharging refiner LyondellBasell for shipping oil from Venezuela to company refineries.
Barnes worked for LyondellBasell, and his co-defendants were oil traders.
The indictment accuses them of conspiracy, wire and mail fraud, and money laundering. Barnes also is charged with passport fraud and cash smuggling. All three are being held without bail.
The Houston Chronicle reported the allegations last year, but the indictments weren’t unsealed until Friday.
The court documents include extensive lists of items the men allegedly purchased, including 20 cars, several million dollars worth of jewelry, and more than $7 million in homes in Houston, New York and Florida. Also listed are bank accounts totaling $8.5 million and a stake in a Washington Avenue sports bar.
Among the cars listed as purchased by Barnes were a Mercedes-Benz McLaren , a limited edition coupe that costs about $500,000, and a 1957 Cadillac Brougham that the late Sinatra once owned. The Cadillac includes a number of over-the-top features like magnetic-bottomed stainless-steel drink tumblers in the glove box, a complete woman’s makeup compact, a cigarette case and an atomizer filled with French perfume.
Gifts to socialite
Barnes also purchased a $750,000 house in the Wynden Oaks neighborhood north of the Galleria for self-described socialite Leslie Tyler Fink and her husband, Randy, as well as a Bentley and a number of pieces of jewelry, according to the filings.
Fink, who has her own line of cosmetics and blogs for Houston-based website www.RSVPSocial.com, touts her contacts with celebrities and fashion designers and may be the subject of a new reality TV show.
Dan Cogdell, a lawyer for Fink, said she has cooperated completely with investigators and returned any property that has been requested.
“Leslie never suspected that Mr. Barnes was engaged in any criminal wrongdoing nor did she have reason to,” Cogdell said.
Other Barnes assets that have been seized or are the target of forfeiture, according to court documents:
· A $2.3 million, 5,350-square-foot house on the shores of Canandaigua Lake in Naples, N.Y.
· A $992,000, 5,400-square-foot house in Bellaire.
· 10 other Mercedes-Benzes.
· A Cobalt boat and two Sea Doo jet skis.
· More than a dozen pieces of high-end jewelry including a silver and diamond Cartier watch.
Agents also have filed forfeiture papers against property they allege Meltzer purchased with money obtained illegally, including:
· A house in Bellaire listed in the name of Ian Meltzer, his son.
· A $3.3 million house in Del Ray Beach, Fla., purchased in the name of Clyde Meltzer’s wife.
· Three 2009 Cadillac Escalades.
· Three vintage Chevrolets — a 1991 Camaro, 1961 Impala and 1960 Corvette.
· Nearly $2 million in jewelry.
· An investment stake in the 360 Sports Lounge on Washington Avenue.
Some still at-large
The forfeiture filings do not mean the government has taken possession of the properties, but they prevents them from being sold without the government’s consent.
Other individuals have been charged in the alleged scheme, but their names were redacted from the indictment because they are still at large.
Attorneys for Barnes and Meltzer couldn’t be reached for comment Friday, but Meltzer lawyer William McMurrey said after a hearing last month that his client believed he was conducting legitimate business transactions.
Wendell Odom, a lawyer for Langley, said Friday his client was a victim of Barnes’ deception.
“If Barnes was smart enough to fool his employer, he was certainly capable of fooling an independent shipper of oil, like my client,” Odom said.
Trial possible in May
The alleged scheme began in late 2006 and was discovered by management at LyondellBassell in late 2009. Barnes was fired, and the information turned over to federal prosecutors.
Last summer officials began seizing Barnes’ assets and confiscated his passport, but he fraudulently applied for a new one and left the country, according to prior court testimony. He was arrested when he returned with a large stash of cash. Barnes agreed to cooperate with investigators and wore a recording device to two meetings with Meltzer and Langley at Houston restaurants, where the scheme allegedly was discussed. Those two were arrested on Dec. 9.
Meltzer and Langley’s attorneys have filed motions to have their clients released on bail. A trial is tentatively set for May 16.
tom.fowler@chron.com