Court Documents Allege Racketeering By Newtown Oil

By Andrew Gorosko

DANBURY — Court documents describe the alleged criminal activities of the now-defunct Newtown Oil Company, which led police to arrest each of the firm’s two former owners on 12 felony charges, including racketeering.

Those charges stem from the oil company’s failure to provide fuel to customers who had signed prepaid fuel purchase contracts for #2 heating fuel for the 2002-03 heating season.

Arrest warrant affidavits, which police used in seeking warrants against defendants William A. Trudeau, Jr, 44, and his wife Heather Bliss, 32, of Westport, have been unsealed. Those documents initially had been withheld from public review at Danbury Superior Court.

On October 11, Mr Trudeau and Ms Bliss made brief court appearances before presiding Judge Susan Reynolds.

Attorney Andrew Bowman of Westport, representing Ms Bliss, noted that the state has presented voluminous evidence in the case which must be reviewed by the defense. Mr Bowman said there are 13 boxes of documents that need to be reviewed.

Attorney Ross Garber of Hartford represents Mr Trudeau.

State’s Attorney Stephen J. Sedensky, III, is prosecuting the case against Mr Trudeau and Ms Bliss. Mr Sedensky has specialized in prosecuting financial crimes.

Judge Reynolds agreed to continue the case until December 19, when both Mr Trudeau and Ms Bliss are again scheduled to appear in court. The case is proceeding on a “supervised pre-trial” basis, meaning that the prosecutor, the defense attorneys, and the presiding judge conduct confidential conferences as the case moves through the court system.

In September, both defendants pleaded Not Guilty to each of the 12 felony charges pending against each of them. Both have elected to have jury trials of their cases. Each person is free on $100,000 bail.

In August, police arrested Mr Trudeau and Ms Bliss in connection with an alleged scheme that police charge effectively bilked oil company customers out of more than $400,000 for home heating fuel that the customers never received after signing prepaid fuel purchase contracts for the 2002-03 heating season.

The charges against each defendant are racketeering, three counts of first-degree larceny, one count of second-degree larceny, four counts of second-degree larceny of a victim over 60 years old, plus three counts of criminal conspiracy involving: racketeering, first-degree larceny, and second-degree larceny. The racketeering charges fall under the state’s Corrupt Organization Racketeering Activity (CORA) law.

Police allege that the crimes occurred between April 1, 2002, and December 2, 2002.

Convictions on the charges could mean lengthy prison sentences for the pair.

The court proceedings against Mr Trudeau and Ms Bliss are expected to be lengthy.

The Warrants

Newtown Police Detective Michael McGowan submitted the arrest warrant applications for Mr Trudeau and Ms Bliss to the court on August 23. A judge endorsed issuing the warrants on August 24. The defendants surrendered to police at the police station on August 28 and were arrested on 12 felony charges each.

Each of the two warrants contains 30 pages of criminal allegations.

According to the court documents: “In late 2002, the Newtown Police Department, as well as other local and state agencies, received multiple complaints regarding the Newtown Oil Company, Inc, located at 47-49 South Main Street … and the fact that customers had pre-paid for heating oil and received neither the oil, nor their money back … Newtown Oil Company went out of business in December of 2002, owing approximately 1,400 customers refunds for oil [which was] paid for, but never delivered. The customers were from approximately nine different towns.”

Some of the customers who lost money were later able to recover it from their credit card companies because they had paid for the fuel with their credit cards. 

Of a $260,000 civil settlement that the state attorney general reached with Newtown Oil earlier this year, approximately $250,000 would eventually become available as partial refunds to customers. The state would use the remaining $10,000 for its legal fees. The $250,000 of restitution represents about 60 percent of what the Newtown Oil customers are still owed for undelivered fuel during the 2002-03 heating season.

The state was unable to obtain 100 percent refunds because the company went out of business and into bankruptcy. The amount to be received by qualifying consumers will depend on how much undelivered oil is owed them.

That June 2007 civil settlement followed a May 2003 lawsuit against Newtown Oil that was filed by the state attorney general.

In the court papers, Det McGowan states that he “was assigned to investigate the Newtown Oil Company for defrauding customers by selling contracts for the future delivery of oil, referred to by Newtown Oil Company as prebuy contracts, and not delivering the oil.”

Besides the Newtown police investigation, Newtown Oil’s activities were investigated by the state attorney general, the state Department of Consumer Protection (DCP), the Danbury Police Department, and the chief state’s attorney’s office.

Investigator John Neumon, for the state attorney general’s office, determined that between April 1, 2002, and December 31, 2002, there were 1,390 consumers who had purchased and paid for home heating oil for future delivery during the 2002-03 heating season which they did not receive from Newtown Oil, according to the documents. 

From September to December of 2002, those customers entered purchase contacts that had a per-gallon fuel price of 89.9 cents, which was significantly lower than competing fuel dealers’ prices.

According to the court papers, in 2001 Newtown Oil began its prebuy consumer program for #2 heating fuel.

DCP Inspector John Hayes could find no evidence that Newtown Oil had entered into contracts with certain heating fuel distributors before the company started selling prebuy heating fuel contracts to consumers for the 2001-02 and/or the 2002-03 heating seasons.

As a standard operating practice, firms that sell heating fuel to consumers sign contracts with their distributors to buy fuel before those firms enter into other contracts to resell that fuel to consumers, according to Mr Hayes.

“A company that did not adhere to this standard practice would in essence be speculating on the future price, and summarily on the future success, of their business if consumers’ contracts could not be met,” according to Mr Hayes.

From May 2002 until December 2002, Newtown Oil had no oil reserves or oil brokers who were willing to sell the firm oil, unless they were paid with cash or certified check, according to the court documents. During that period, Newtown Oil delivered fuel to consumers who paid for their fuel with cash, and rationed fuel deliveries to consumers who had prebuy contracts, the court papers add.             

“Billy [Trudeau] was still taking money and establishing contracts for future delivery of oil during November and December of 2002,” according to a Newtown Oil Company employee who provided testimony to investigators.

Search-And-Seizure Served

On June 8, Newtown police and Danbury police executed a search-and-seizure warrant at 47-49 South Main Street, where Newtown Oil had formerly done business. The police seized bank records, deposit stamps, deposit books, Newtown Oil Company customer contracts, and checks and checkbooks for some of the businesses associated with the Trudeau family and Ms Bliss, as well as miscellaneous business records.

According to the arrest warrant affidavits, there were at least 22 different businesses linked to Mr Trudeau or his family, or to Ms Bliss, which conducted business from 1968 to 2002 at the South Main Street site.

The arrest warrant affidavits also list a variety of sizable bad checks issued by Mr Trudeau to various businesses.

The more than $40,000 in bad checks were issued by Mr Trudeau to a travel agency, an engine shop, a candy and tobacco distributor, an insurance company, and an individual.  

In a recent statement, Attorney General Richard Blumenthal said the arrests of Mr Trudeau and Ms Bliss “send a strong warning that heating oil dealers abusing consumers will feel the heat of prosecution, both civil and criminal. Our law enforcement partnership has produced aggressive civil and criminal action, ensuring these alleged violators are held accountable.”

In a separate case unrelated to the Newtown Oil scandal, in July 2003, Mr Trudeau was sentenced in US District Court in Hartford to a 22-month federal prison term, plus restitution and fines, following his guilty pleas to federal tax and financial fraud offenses.

Mr Trudeau was ordered to pay $458,000 in restitution to the victims of his financial frauds, plus a $25,000 criminal fine.