By the standards of recent financial scandals, Stephanie Rae Roqumore's (seen here) alleged $6.8 million natural gas trading scam may be small potatoes, but it raises some big questions.
How could a lone natural gas trader in Houston dupe some of the world's biggest energy companies for eight years, despite a veritable forest of red flags?
After all, the overhaul of trading rules and credit practices in the wake of Enron's collapse was supposed to make it tougher, if not impossible, to perpetuate such a fraud.
In September, FBI agents raided Roqumore's suburban Houston home, searching for evidence she scammed at least 11 energy companies.
Among the stacks of paperwork seized from the ornate 3,000-square-foot house were bank records for trading firms Roqumore is accused of using to dupe companies including Occidental Petroleum, Royal Dutch Shell Plc's Coral Energy Resources, Hess Corp and privately-held commodities giant Cargill.
US federal agents also recovered two handguns - one found under a mattress - ammunition, documents for a million-dollar life insurance policy and a summons from the Internal Revenue Service, according to the search and seizure warrant.
The $6.8 million scheme laid out in a 19-count indictment charging wire fraud and money laundering seems straightforward.
"We are sifting through the evidence at this point and Ms. Roqumore maintains her innocence," Wendell Odom, Roqumore's attorney, said in an statement.
Roqumore, 48, who has pleaded not guilty to the charges, is accused of purchasing natural gas from firms by submitting false financial statements to the companies to obtain lines of credit.
She would then sell gas to counter-parties like ConocoPhillips, paying back either a fraction of the purchase price or nothing at all in some instances, according to her indictment.
Court records and public documents contain numerous red flags indicating Roqumore was in financial trouble.
Public records also show a guilty plea to a felony theft charge in 1999. Roqumore and her parent company, SRR Energy Management Resources, filed for Chapter 7 bankruptcy in 2006, yet firms continued to extend her credit to buy natural gas up until April 2010.
"What is sort of surprising is that she was able to get away with it for so long," said Craig Pirrong, director of energy markets at the Global Energy Management Institute at the University of Houston's Bauer College of Business.
Text: Anna Driver and Eileen O'Grady, Reuters