Former Quest CEO Admits He Failed to Disclose His Unlawful Diverson of $10 Million in SEC Filings

OKLAHOMA CITY, OK—Today, JERRY DALE CASH, 47, of Oklahoma City, Oklahoma, pled guilty to making a false Sarbanes-Oxley certification to the Securities & Exchange Commission by failing to disclose his diversion of $10 million in corporate funds, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

From 2004 through 2008, Cash was the Chief Executive Officer of Quest, a publicly-traded oil and gas exploration and production business based in Oklahoma City. As CEO, federal law required Cash to certify the accuracy of Quest’s quarterly and annual financial reports with the SEC.

As part of his plea, Cash admitted that prior to August of 2008, he worked with a fellow officer to transfer $10 million out of Quest to an account owned by Cash in the name of Rockport Energy. Cash admitted that he and the fellow officer made these transfers without the knowledge or approval of the Board of Directors. Cash admitted that he then spent the money on non-Quest investments and renovations to his Nichols Hills home, among other personal items. Cash admitted that no member of the Quest Board of Directors or any member of senior management, other than the fellow officer who helped him make the transfers, knew Cash was spending the $10 million on non-Quest investments or other personal items. Despite his diversion of the $10 million from Quest, on August 11, 2008, Cash certified Quest’s financial report filed with the SEC knowing that it was false because the diversion was not disclosed.

Cash left Quest in August of 2008. The company has cooperated with authorities in the investigation, which is ongoing.

At sentencing, Cash faces up to 20 years in federal prison, a $5 million fine, and mandatory restitution. A sentencing hearing will be set by the Court in approximately 90 days.

This case was investigated by the Western District of Oklahoma’s Financial Fraud Task Force, which is comprised of special agents from Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigative Division, United States Secret Service, and personnel from the U.S. Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorney Jeb Boatman and United States Attorney Sanford C. Coats.