A Killdeer man is facing three felony charges after an oilfield company he once worked for claimed he defrauded the business, telling authorities that he took more than $5 million through various schemes.
Shawn Kluver made an initial appearance in Southwest District Court earlier this week after authorities on April 30 issued a warrant for his arrest.
He faces Class A felony charges, two related to theft and another for “exploitation” of a vulnerable adult. The charges come as Kluver, the business he worked for and other parties are embroiled in a series of lawsuits over some of the same issues raised in the criminal investigation. An attorney representing him in the civil litigation says none of the allegations against Kluver have been proven in court.
The charges surround his relationship with Environmental Driven Solutions, a Killdeer-based oilfield service provider. Kluver became a part-owner in January 2015 and a manager of the company, according to an affidavit. Later that year, he gave up his ownership rights but stayed on as an employee, the document says.
While Kluver worked for the company, he used several bank accounts to “steal and defraud” the business, the affidavit says.
The document alleges that he sold oil through the company while “profiting on the sales” by using the account of a separate company he had established.
It goes on to say that Kluver set up another business, Little Knife Disposal LLC, a saltwater conversion site in McKenzie County, “under the ruse that it would be owned and operated as a revenue generating venture of Environmental Driven Solutions.”
The owner of Environmental Driven Solutions, an 82-year-old man, put up a bond of $300,000. After that, Kluver changed the paperwork, making himself the sole owner of Little Knife, the affidavit says.
The document says Environmental Driven Solutions paid operating expenses for the Little Knife site, and that the facility used Environmental Driven Solutions’ equipment, personnel and resources. A court order required Kluver to return the equipment, valued at $378,000, but when Environmental Driven Solutions retrieved it, “it was damaged and some items were no longer usable,” the document says.
The affidavit also says Kluver took equity draws from the company, even when he was no longer an owner, for a total of $233,500. And it outlines several other times he allegedly defrauded the business.
Jeff Bennett, general manager for Environmental Driven Solutions, said he started auditing the company’s finances after he was hired in the summer of 2017.
“It probably took maybe a day or two to become absolutely convinced that we had some issues,” he said.
In November 2017, Bennett reported to Killdeer police that mail and checks had been stolen from a post office box in Killdeer, according to the affidavit. Kluver was identified as a suspect. At that point, he no longer worked for the company.
The case went dormant for nearly two years, as “information and documentation in the case was not immediately available and more information was needed,” the affidavit says.
By October 2019, the North Dakota Bureau of Criminal Investigation had revived the investigation.
In the meantime, Kluver, Environmental Driven Solutions, and other connected parties became involved in civil litigation.
Several cases are still active, including a suit Kluver filed against Environmental Driven Solutions and others in January 2018. The company filed a separate lawsuit against Kluver later that same month.
Kluver’s lawsuit “seeks to recover money that was taken from Mr. Kluver, secure title to the land where he lives, and obtain damages for defamation, among other causes of action,” his attorney, Ariston Johnson, wrote in an email. Johnson represents him in the litigation.
In that lawsuit, documents filed on behalf of Kluver and Little Knife say Environmental Driven Solutions and other parties owe them money in excess of $800,000. Some of it is Kluver’s money that the defendants used for taxes, payroll and bills, and the rest is customer payments intended for Little Knife that ultimately went to Environmental Driven Solutions, according to a filing. A trial is slated for July 2020.
“The timing of the criminal charges is suspicious,” Johnson said, adding that “waiting for two years to pursue stale criminal charges and then filing them just two months before the same parties are set for a civil jury trial give the appearance of impropriety.”
Johnson said he’s “confident” that his client will be exonerated.
Bennett said that when authorities opted not to finish the investigation after he approached them on behalf of Environmental Driven Solutions in 2017, “we started filing civil lawsuits in an attempt to protect ourselves, all the while continuing to collect information.”
He said the charges against Kluver help to raise the public’s awareness of the situation “so he couldn’t take advantage of anyone else.”
“The big thing to us is just trying to reclaim whatever considerations, whatever damages we can,” he said.
Environmental Driven Solutions continued to operate during the court proceedings, though like hundreds of other oilfield businesses, it’s taken a hit this spring as oil prices fell during the coronavirus pandemic. The company is involved in production fluids and hauling sand for hydraulic fracturing, dry goods and equipment, and it cleans tanks. Bennett said the business hopes to eventually open a solid waste disposal facility.
State regulators were previously involved in a dispute with Kluver in 2016 over noncompliance issues at an oilfield waste treating plant north of Killdeer run by Renewable Resources. A related entity, SGJ Holdings, holds equity for both Renewable Resources and Environmental Driven Solutions.
Reach Amy R. Sisk at 701-250-8252 or email@example.com.
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