The former head of U.S. operations for a German oil and gas concern denied under oath Wednesday that he defrauded his former employer by funneling millions of dollars in commissions and royalties to himself through a shell “consulting” company and a financial institution he controlled.
Bernard Tubeileh, a German national, said all the transactions in question were aboveboard and executed with the approval of his superiors in Germany, including the chief executive officer of Global Oil & Gas AG, a company Tubeileh co-founded in 2006.
“They never complained about anything,” he testified before a Dallas County jury in the court of state District Judge Martin Hoffman.
Tubeileh sued Global Oil & Gas’s U.S. subsidiaries, which he ran from 2015 until his removal in 2023, claiming he was fired without cause, in violation of his written employment agreement.
Those U.S. entities, Global Oil & Gas Texas and Global Oil & Gas Fields Oklahoma, both with offices in Plano, filed a counterclaim accusing him of fraud and misappropriating company funds.
Each side is seeking unspecified damages from the other in the millions of dollars.
The trial began Jan. 15 and is expected to continue at least until next week.
On Wednesday, Tubeileh’s lead lawyer, Brian Lauten of Dallas, walked his client through a series of deals Tubeileh put together involving oil and gas leases in the United States. Lauten displayed for jurors emails in which Detlef Mader, the CEO of the German parent company, signed off on those deals, as negotiated by Tubeileh.
Under cross-examination by Michael Zellers, one of the attorneys for Global’s U.S. subsidiaries, Tubeileh acknowledged that his written communications with Mader and others in Germany did not disclose that commissions and royalties on the deals were being paid to a so-called consulting company created by one of Tubeileh’s oilfield colleagues and then deposited almost in total into the U.S. subsidiary of a German financial institution owned by Tubeileh.
The ousted executive nonetheless maintained that he had spoken with Mader and informed him of the details of the transactions — but “not in writing.”
Zellers is a partner in the Los Angeles office of Cleveland-based Tucker Ellis.
His co-counsel in the case, Michael Hurst of Lynn Pinker Hurst & Schwegmann in Dallas, said in his opening statement that an internal investigation by Global revealed that Tubeileh stole “tens of millions of dollars” through “various fraudulent schemes” intended to mask “a web of self-dealing and unlawful transactions.”
Hurst said evidence in the case would show that the Global companies lost $78 million as a result of Tubeileh’s shady actions.
He said Tubeileh, as manager of Global’s U.S. operations, arranged for the payment of millions of dollars in consulting fees and royalties to a shell company, Jamalabox, that Tubeileh was secretly behind.
Jamalabox’s sole function, Hurst said, was to collect sham consulting fees from the Global companies — payments arranged by Tubeileh — and transfer the money to Sinostar Investments LLC, the U.S. subsidiary of a German financial institution wholly owned by Tubeileh.
Tubeileh’s suit claims that thanks to his expertise and hard work, Global hit paydirt on a number of oil and gas deals in the States, making the company’s American subsidiaries “successful and profitable companies, with assets valued at approximately $300 million.”
The suit says the American companies owe him millions of dollars, including unpaid compensation he was promised in writing and a share of revenues generated by producing wells in which he’d been granted an interest. The suit also said that since his ouster, one of the Global subsidies has stopped making its monthly payments on $2.2 million in loans from him and Sinostar — loans the other subsidiary guaranteed.
The case number in Dallas County District Court is DC-23-07534.