A Watford City accountant is on trial in Bismarck this week in a fraud case that stemmed from a high-profile investigation into an oil boom murder-for-hire plot.
Rene L. Johnson is accused in U.S. District Court of defrauding investors in 2013, but the investors received their money back plus interest, according to testimony in the trial that began Monday.
Defense attorney Irvin Nodland urged jurors to focus on what Johnson is charged with and not get confused by references to other investigations, which include her former client, James Henrikson, who was convicted for ordering two killings.
According to testimony, Johnson provided accounting and other financial services for Henrikson’s oilfield trucking businesses, owned by his ex-wife, Sarah Creveling.
Johnson was presented with the opportunity to invest money with Henrikson and his associates with the promise that she’d double her money in 90 days. The funding 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.
A text message exchange between Johnson and Henrikson presented at trial showed she was having difficulty finding people to invest because it was too big of a risk for people.
In April of 2013, she provided $400,000 under an agreement that required her to be repaid $800,000 in 90 days.
Johnson used some of her own money toward the $400,000 plus funds that had been invested with her business, RLJ Factoring, the testimony showed. Johnson is charged with wire fraud and mail fraud for allegedly diverting funds from three investors without their knowledge.
After the 90 days had passed, none of the investors in Kingdom Dynamics Enterprises received their money back, testified Creveling, who was under subpoena from the U.S. government.
Johnson threatened legal action and was repaid $400,000 in two installments in August 2013. Johnson then repaid the investors and provided an interest payment from her own pocket, Nodland told jurors.
One of the investors continues to be a customer of Johnson’s accounting firm, Nodland said. Another of the investors, Johnson’s friend and partner, died in 2015.
“They had invested before together and there was a lot of trust between them,” Nodland said.
Assistant U.S. Attorney Gary Delorme said during his opening statement that taking money from a wallet is still a crime even if the money is returned.
“It doesn’t diminish the theft,” Delorme said.
Johnson also is charged with making a false statement to federal agents for allegedly lying to authorities about knowing an alias used by Henrikson, which was Cole Johnson.
Creveling testified that Johnson knew her ex-husband used aliases.
Nodland said the statement occurred during a lengthy interview with law enforcement when Johnson was asked if she knew a series of names. Nodland said she later went to law enforcement and tried to correct the statement.
Johnson also is accused of lying about the purpose of a bank loan. Prosecutors say Johnson said the loan was for refinancing and remodeling a property but it was used toward an unsecured investment.
Nodland said Johnson did not prepare the loan application and the loan has been paid back in full.
The trial is expected to take most of the week. Judge Daniel Hovland directed prosecutors to limit testimony to allegations that involve Johnson and not address the murder-for-hire. During her testimony, Creveling referenced her ex-husband’s federal convictions but did not discuss the crimes. Henrikson is not on the government's witness list.
The $400,000 payment Johnson made in 2013 was to Henrikson’s associate, Doug Carlile of Spokane, Wash. 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.
Creveling was convicted of conspiracy to commit mail fraud for bilking investors through a Bakken business scheme. She continues to be on probation.