A judge on Thursday sentenced a Watford City accountant to 100 hours of community service but no prison time in a fraud case that stemmed from an investigation into an oil boom murder-for-hire plot.

Rene L. Johnson was found guilty in November of wire fraud after federal prosecutors alleged she diverted investors’ funds without their knowledge for a high-risk loan.

The jury in U.S. District Court in Bismarck found her not guilty of three other charges. The case began after investigators seized financial records associated with her client, James Henrikson, who was later convicted of ordering two deaths.

Johnson, who did accounting and other financial services for Henrikson’s oilfield trucking businesses, provided a $400,000 loan to one of Henrikson’s associates with the understanding she’d double her money in 90 days.

Johnson was accused of using $300,000 invested in her business, RLJ Factoring, toward that loan without informing the investors.

Assistant U.S. Attorney Gary Delorme pushed for a sentence of 1½  years in prison, arguing Johnson abused her position of trust as a certified public accountant and put investors’ funds at risk.

Johnson maintained her innocence during the hearing.

“We believe very strongly that she is innocent. We intend to appeal and we intend to win,” said her attorney, Irvin Nodland.

Judge Daniel Hovland called it a “unique case” because the investors received their money back, plus some interest, months before the investigation began.

Johnson received letters of support from people prosecutors identified as victims, including investor Robert Gannaway, who wrote he’d continue to trust Johnson to handle his money.

Hovland said the investors likely would have felt differently if Johnson hadn’t been able to pressure Henrikson and his associates to repay her the money.

“It doesn’t mean there wasn’t a crime committed,” Hovland said.

Hovland also ordered Johnson to serve two years of supervised release.

Nodland said Johnson will have to deal with the North Dakota State Board of Accountancy regarding the felony conviction and the status of her CPA license. The board did not respond to inquiries from the Bismarck Tribune this week about the process for reviewing Johnson’s CPA license.

Jurors found Johnson not guilty of mail fraud, making a false statement to law enforcement and making a false statement on a bank loan application.

Hovland questioned why anyone would do business with Henrikson, who was a convicted felon before coming to the Bakken. Hovland, who had Henrikson in his courtroom on a weapons charge, said it didn’t take him long to figure out that Henrikson was a “conniving con man.”

The $400,000 payment Johnson made in 2013 was to Henrikson’s associate, Doug Carlile, of Spokane, Wash. The loan was related to a business venture called Kingdom Dynamics Enterprises, an oil and mineral rights leasing investment operation that sought short-term, high-risk investments.

Carlile was killed in his home in December 2013 at the direction of Henrikson, who is serving life in prison. Henrikson also was convicted of ordering the killing of Kristopher “KC” Clarke, a truck driver who worked for him. Clarke was killed in 2012 near Mandaree on the Fort Berthold Reservation.

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(Reach Amy Dalrymple at 701-250-8267 or Amy.Dalrymple@bismarcktribune.com)

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