Both the COO and CFO stole tens of millions by creating false companies, invoices, land purchases. Russo was supposed to donate 5 mill to fund UlL's baseball upgrade. I used to hang out with him at his camp at the Point every now and then. If you know Russo, this news doesn't come as a surprise.

LINK

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The 42-page petition lays out allegations of self-dealing — and profiting from both sides of transactions — dating back to 2008 and claims Russo, LeBlanc, Scott Kerstetter (all of Lafayette), Daniel Anthony (Texas) and Mike Sheffield (Oklahoma) enriched themselves to the tune of tens of millions of dollars at the expense of Stabil Drill and its related entities. Among the numerous corporate defendants named in the suit are Laguna Oil Tools, Renegade Performance Properties, Renegade Oil Tools and LeBlanc Real Estate Investments, all of Louisiana, and Quest Holdings, Triton Hardbanding Service and MSI Inspection Service, all of Oklahoma.

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Chris Russo, many in Lafayette might recall, in January pledged to donate $5 million toward UL Lafayette’s $10 million renovation to the baseball stadium, which is set to be renamed Russo Park at M.L. Tigue Field. The status of that commitment is unknown in light of the legal troubles now facing the local businessman.

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The officers hid from Plaintiffs the true business of the companies they owned in order to profit from Stabil Drill,” the petition reads. “All of the Defendants had a meeting of the minds and worked in a concerted fashion to send fake or inaccurate invoices to the Plaintiffs, conceal true ownership interests, and/or engage in covert real estate transactions.” The plaintiffs, who claim Stabil Drill wrongfully paid out more than $65 million, maintain that the company continues to risk losing even more as contractual obligations come due — “obligations which would not have existed but for the wrongful conduct of the Defendants.”

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The plaintiffs, who became suspicious of Russo and LeBlanc’s activities in early 2016 after noticing deficiencies in their corporate disclosures, say they soon discovered that Youngsville-based Laguna Oil Tools is a sham corporation set up so that Russo, LeBlanc and Kerstetter could divert corporate opportunities from Stabil Drill to themselves, direct profits from Stabil Drill transactions to themselves and overbill Stabil Drill for various products and services using other entities they controlled. In other words, Laguna, whose only listed officer in the Louisiana Secretary of State records is Scott Kerstetter, was merely a pass-through entity designed to create an additional layer of separation between Russo and LeBlanc and another Kerstetter company, Renegade Oil Tools. The plaintiffs say Laguna and Renegade share the same physical address, employees and general liability insurance and contend that their investigation revealed that Russo, LeBlanc and Kerstetter actually jointly manage and/or control Laguna. “[T]he Officers personally made fortunes by sending work to, and creating purchase orders for, an entity that hired other companies owned by the Officers ... The amount of money paid to Laguna in furtherance of Defendants scheme to milk Stabil Drill is approximately $38.7 million,” the lawsuit alleges.

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Allegations of corporate officers violating their fiduciary duty to a publicly traded company are almost certain to spark an investigation by the Securities and Exchange Commission. And one would surely expect the Federal Bureau of Investigation to come calling as well.

This post was edited on 4/26/16 at 8:47 am