Former petroleum industry CFO sentenced to 2-plus years in prison for stealing nearly $1M from Twin Cities company

  • In US
  • 2021-08-24 14:26:00Z
  • By Star Tribune (Minneapolis)

A onetime petroleum industry executive has been sentenced to more than two years in prison for defrauding his Minneapolis employer out of nearly $1 million.

Gregg W. Johnson, 59, of Apple Valley, was sentenced Monday in U.S. District Court in St. Paul to a 2¼-year term to be followed by three years of supervised release in connection with a scheme he perpetuated as chief financial officer of Chemstar Products Co., a 57-year-old manufacturer of products that assist oil drilling.

Johnson's defense argued for no prison time and for probation to be served on home confinement. The prosecution pushed the court to send Johnson to prison for anywhere from 2¾ to nearly 3½ years.

Between 2014 and July 2020, when he lost his job due to the economic impact of the pandemic, Johnson stole more than $930,000 by issuing checks from company bank accounts to cover personal credit card payments, mortgage payments and college tuition for his children. The stolen funds were meant solely for paying shareholders or paying taxes on payouts to shareholders.

To cover up the thefts, Johnson made false entries into the company's accounting software to make the cash flow appear balanced.

Johnson pleaded guilty in March to wire fraud and agreed to make full restitution.

About four months after the alleged thefts ended, Apple Valley police received a report that Johnson was missing. Johnson was located five days later after being spotted on surveillance video at a gas station in Owatonna, Minn.

Johnson's attorney explained in a court filing that when the theft was uncovered, his employer sued him "and Gregg's world came crashing down."

Johnson's online biography said he is a 1985 graduate of the University of Wisconsin-Eau Claire, and received his master's in business administration management in 1999 from the University of St. Thomas in St. Paul.

Paul Walsh • 612-673-4482


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