2 Texas oil company officials sentenced to probation for selling products stolen from Mexico

2 Texas men get probation in Mexican oil scheme

HOUSTON — Two Texas oil company officials were sentenced Friday to probation for their roles in the sale of petroleum products stolen from Mexico.

Donald Schroeder, the former president of Houston-based Trammo Petroleum, and oil and natural gas broker Jonathan Dappen, of McAllen, had faced up to five years in prison after pleading guilty to conspiracy to receive stolen goods.

Schroeder said in a previous court hearing he arranged for Trammo Petroleum to buy and later sell stolen Mexican condensate, a liquid hydrocarbon that refiners can blend with crude oil to produce fuel and other products.

Dappen, who worked for the south Texas company Petro Salum, helped deliver stolen petroleum condensate to Continental Fuels, which has an office in Houston, according to court documents.

U.S. District Judge Ewing Werlein Jr. sentenced both men to three years of probation and fined each of them $10,000 after prosecutors and defense attorneys requested the men receive probation.

Their sentencings were part of a binational investigation into smuggled oil that was stolen from Mexico’s state oil monopoly Petroleos Mexicanos, or Pemex, transported across the border and sold to U.S. refineries.

The Mexican government has said drug cartel members and other criminals are responsible for many of the oil thefts. They tap remote pipelines, and sometimes build pipelines of their own, siphoning off hundreds of millions of dollars worth of oil each year.

Before being sentenced, both Schroeder and Dappen expressed remorse.

“I’d just like to get back in society and try to make amends for what I’ve done,” said Schroeder, 61, who had previously agreed to pay a separate $2 million fine to the U.S. government.

His attorney, Ronald Woods, said Schroeder has worked in the energy industry for 35 years as a legitimate businessman and his purchase of the stolen petroleum products was a one-time “horrible mistake.”

Dappen’s attorney, Edward Rodriguez, blamed his client’s actions in part on his youth. Dappen is 30.

“I realize the mistake I made in getting involved in this business has offended my wife and parents and the beliefs they taught me,” Dappen, a U.S. citizen raised in Mexico City, said in Spanish.

Prosecutor James McAlister said he did not ask for jail time for either of the men because they were not selling something dangerous, such as drugs or guns. McAlister said Schroeder’s cooperation helped in the prosecution of other defendants in the case. Three other Texas oil executives and brokers arrested in the probe are scheduled for sentencing in October and November.

The investigation began in 2007 when Pemex contacted U.S. Immigration and Customs Enforcement to report suspicions that its products were being smuggled into the U.S.

Pemex, which is the only legal owner and exporter of Mexican oil to the U.S., has been struggling for years to quell a seemingly endless series of taps on its pipelines by thieves, robbing Mexico’s government of a major source of revenue. Oil revenues fund about 40 percent of the Mexican government’s budget.

U.S. investigators found some U.S. brokers were involved in sales of the stolen oil to small fuel distributors. No major U.S. refiners have been implicated.

Prosecutors said Schroeder and Dappen were too far removed to know whether the petroleum products they were buying had been stolen by drug cartels or other criminal groups in Mexico.

In June, Pemex filed a lawsuit in Houston federal court against the companies and individuals named in the investigation. Dappen is named in the suit, but Schroeder has been dropped from it.

Although not implicated in the probe, chemical giant BASF is also being sued by Pemex, which claims the Germany-based company knew it was buying stolen petroleum products. BASF has denied it did anything wrong.