Friday, March 24, 2006
This defendant was the gatekeeper who made the scope of this white-collar crime possible by hiring and enabling the other criminals in the first place, said Attorney General Abbott. It is safe to say that none of the fraud that occurred at ERCOT would have been possible except for the insider dealing he encouraged.
In his role as chief information officer, Shoquist promoted the hiring of Wallace to oversee ERCOT’s multimillion-dollar program budgets. In this capacity, Wallace was able to successfully bill ERCOT for work that was never done, including invoices submitted in the name of a deceased person. Over the course of this scheme, Shoquist signed off on contracts and invoices for billing by Wallace. The funds were billed to budgets within the Information Technology (IT) department that Shoquist supervised. In turn, Wallace paid Shoquist monthly kickbacks ranging from $7,500 to $20,000.
Shoquist was responsible not only for the hiring of Wallace, who bilked ERCOT out of nearly $1 million in false billings, but also of Christopher Uranga and his codefendants, Christopher Douglas and Carlos Luquis. These men used their positions inside ERCOT to misapply funds in excess of $1 million as well.
The schemes enabled Wallace and Uranga and his co-defendants to steer contracts in such a way as to violate their ethical and fiduciary responsibilities to ERCOT, the state’s electricity grid system, all without the knowledge and approval of its legal and accounting departments.
Two defendants await trial in the coming months based upon indictments handed down in January 2005. They are:
Wallace, program development director (two indictments, $800,000 misappropriated and also indicted in Travis County on three counts of first-degree felony theft);
Luquis, physical security manager (six indictments, over $100,000 misappropriated).
Two indicted defendants have previously pleaded guilty and are awaiting sentencing, pending the outcome of the Luquis trial:
John Cavazos, a nonemployee contractor and a shell company security director (one indictment, $8,700 misappropriated), will receive four years of probation or deferred adjudication, and has already paid $8,700 in restitution to ERCOT.
Uranga, director of IT security (six indictments, over $500,000 misappropriated), has pleaded guilty to two counts of misapplication of funds and will be sentenced to up to 15 years in prison. He has agreed that his restitution amount exceeds $500,000.
One other indicted defendant, Douglas, former senior manager of ERCOT’S Data Warehouse and codefendant of Luquis and Uranga, is currently cooperating with Attorney General’s prosecutors and has yet to enter a plea on any of the charges.