Leaders of failed project to build Texas power plant indicted for mail and wire fraud

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CORPUS CHRISTI, Texas — Two leaders of a failed project to build a power plant in Corpus Christi have been indicted on allegations they falsified expense reports to pay for airline tickets, country club memberships and other personal expenses.

Former Chase Power CEO John Upchurch and former president Kathleen Smith were indicted last month on mail fraud and wire fraud charges.

The Corpus Christi Caller-Times reports (http://bit.ly/1JWaYj2 ) that Chase Power spearheaded the Las Brisas Power Plant project, which would have used petroleum coke from nearby refineries on the Texas Gulf Coast to produce energy. Chase abandoned the project in 2013 shortly after a state judge ordered the Texas Commission on Environmental Quality to review a permit it had issued for Las Brisas.

The project faced strong local opposition due to concerns about air pollution.

The indictment in federal court in Houston accuses Upchurch and Smith of using company credit cards and expense reports to cover personal expenses from airline tickets to country club memberships.

In one alleged transaction, the indictment accuses Upchurch of approving his own $15,000 invoice for work listed as "wiring on 7th floor for IT." The indictment says Upchurch signed a check on the same day for work done to upgrade his home security and entertainment system.

Prosecutors said in the indictment they will seek forfeiture of $1.3 million.

Rusty Hardin, an attorney for Upchurch, said a previous civil settlement reached in state court resolved any questions about expenses.

"I'm quite frankly shocked and amazed that he was indicted for what is simply a civil dispute," Hardin said Saturday.

Trial has been set for August 17 in Houston.

Information from: Corpus Christi Caller-Times, http://www.caller.com

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