A Houston oil shipper used the complexity of world markets to make millions moving oil, buying huge homes, a fleet of 11 Mercedes and Frank Sinatra's 1957 Cadillac Eldorado. Now he's in jail, and the feds are auctioning his rides.
Johnathan Barnes, 55, had been a former Enron executive who held down jobs coaching basketball following the Texas' firm's implosion. At Enron, Barnes had been in charge of shipping raw materials like coal and oil to the company's power plants. He became friends with an oil shipper named Clyde Meltzer, whom prosecutors accused in January of working with Barnes and another man to net at least $80 million.
According to federal officials, the scam intensified when Barnes moved to Houston in 2002 to work first at his own firm, then at chemical giant LyondellBasell. Barnes and Meltzer arranged for Lyondell to overpay for oil shipped from Venezuela, and collect kickbacks on the surcharges. When new managers at Lyondell noticed the charges, they went to the feds.
While the scheme was running, Barnes had used his money to buy Sinatra's '57 Cadillac Eldorado Brougham for about $130,000. It was a rare break from Barnes' near-exclusive purchasing of Mercedes-Benzes, including a 2008 McLaren SLR and a 2011 Mercedes SLS AMG. Other purchases included two lake homes in New York and a $750,000 house for a Houston socialite and her husband.
As the feds began to investigate the scheme last year, Barnes rolled over and cooperated, wearing a wire to capture evidence from his partners. He pled guilty to four charges in March, agreed to pay up to $82 million in restitution and could still face up to 55 years in prison. Meanwhile, the U.S. marshals have begun to auction Barnes' vehicles including the SLS AMG and McLaren SLR; it's not clear where Sinatra's Cadillac will be sold, but it'll probably be for more than three coins from a fountain.