Free Spending at Offshore Oil Company

HOUSTON (CN) - An accountant claims in court that Black Elk Energy, an oil company, fired him for refusing to conceal that the CEO's security guard ran up $360,000 on his company credit cards, including "$25,000 at gentlemen's clubs."

Micah Bowen sued Black Elk Energy Offshore Operations in Harris County Court.

Bowen claims during nearly three years with the company he received regular bonuses and salary increases, and became the company's "de facto treasurer."

One of his main duties was to work with UHY Advisors, which performed year-end and quarterly audits of Black Elk Energy to protect shareholders' interest, Bowen says in the complaint.

"During his employment at Black Elk, Mr. Bowen reported a number of financial irregularities," the complaint states. "Some of these issues dealt with the non-business-related spending of House Burton, the CEO's driver/security administrator. On information and belief, prior to working at Black Elk, Mr. Burton was employed at Michaels Men's Club, a gentleman's club in Broussard, Louisiana.

"Black Elk's President and CEO, John Hoffman, met Burton at Michaels Men's Club and offered him a job at Black Elk. Mr. Hoffman gave Mr. Burton the title 'Security Administrator' and provided him with a Yukon XL and two corporate credit cards. ...

"Over the course of approximately 20 months, Mr. Burton charged more than $360,000 on Black Elk corporate credit cards. The vast majority of those charges were charges for personal items not attributable to company operations.

"Mr. Burton's spending included over $25,000 at gentlemen's clubs and over $50,000 in accessories for his vehicle. Mr. Burton spent thousands of dollars at retail stores, bars, restaurants like Zales Jewelers, Best Buy, GameStop, Walmart, JC Penney, Burlington Coat Factory, Academy, Adidas, and Coach. Mr. Burton's other personal charges included airline tickets, Las Vegas hotels, and personal dental bills. Mr. Hoffman personally approved Mr. Burton's expenses each month."

Bowen says he reported Burton's free spending to company executives, including Hoffman, and they did nothing about it.

With the company's year end audit approaching, Bowen says, he asked co-worker Christine Wehmeyer for advice on how to bring Burton's spending to the attention upper management.

"Wehmeyer informed her immediate supervisor, Art Garza, Chief Technical Officer. Mr. Garza was furious when he learned of Mr. Burton's spending and immediately started asking questions. Mr. Garza approached other Black Elk executives and demanded that Mr. Burton be terminated. The next day, Mr. Hoffman and Mary Patterson, current Chief of Staff, called Mr. Bowen into a meeting and told him to stop 'gossiping' about private company matters," the complaint states.

Bowen says the next day Hoffman told him to stay out of it.

"Hoffman told Mr. Bowen that Mr. Burton's non-business related spending was none of his business, not part of his job responsibilities, and to ignore the issue. Mr. Bowen understood this to mean that Mr. Hoffman was asking Mr. Bowen not to report these charges to the auditors," the complaint states.

Bowen says he was fired on the next Monday, just hours after he told a supervisor "he was 'not going to lie' to UHY auditors" about Burton's enormous bills.

He seeks punitive damages for wrongful termination.

He is represented by Joseph Ahmad with Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, of Houston.

Black Elk is the only defendant. Black Elk Energy has been sued at least 11 times in the past 4 years, at least eight of them involving finances or bills due, according to the Courthouse News database. Three lawsuits were filed after an explosion and fire.

Follow @cam_langford

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit