Ferrellgas accuses fired fleet manager of embezzling $3 million

The nation's second largest propane retailer is accusing its former fleet manager of using his position to embezzle millions of dollars for personal gain.

In a lawsuit filed March 28 in the Circuit Court of Platte County, Mo., Ferrellgas Partners was granted a restraining order freezing the assets of Scott Beeson, a 12-year employee who oversaw the company's $25 million annual budget for vehicle purchases and maintenance. Beeson was fired March 13, 2008. Ferrellgas operates more than 1,900 bobtails and 300 transports, according to information provided for LP Gas magazine's 2008 Top 50 listing.

The suit alleges that Beeson conspired with several companies to submit vendor invoices for work that had not been performed and/or contained fees and expenses that exceeded the usual and customary costs. Beeson allegedly arranged to have the invoices paid by Ferrellgas and the funds wired to his personal bank account. The company seeks to recover more than $3.5 million, most of which it says was routed to Beeson or to an unnamed non-profit business entity of which he was the founder, CEO and board member.

"Through an internal investigation we have uncovered violations of Ferrellgas' accounting and internal control procedures through which a significant amount of money was allegedly taken from the company over the last several years," said company spokesman Scott Brockelmeyer. "Aggressive actions have been taken by Ferrellgas to ensure our financial interests are protected."

Ferrellgas also claims that defendant companies Nationwide Equipment LLC and Nationwide Refurbishing Center LLC still possess more than 100 company vehicles that they refuse to return. The lawsuit asks the court to order their return.

Ferrellgas officials say they have notified the FBI of their findings.

In a move that company officials insist is unrelated to its audit or lawsuit against Beeson, Ferrellgas Senior Vice President, Chief Financial Officer and Treasurer Kevin Kelly has resigned effective March 28. Kelly had served as the company's chief financial officer since 1998. No reason was given for his departure.

J. Ryan VanWinkle has been named interim CFO. VanWinkle joined Ferrellgas in 1999 and has served as vice president of finance and corporate development since September 2007.

Ferrellgas will retain Kelly as an advisor at his current salary through Dec. 15, 2008.

"As chief financial officer, Kevin guided us through some of the most significant financial transactions in our history, including the formation of our employee stock ownership plan in 1998 and our merger with Blue Rhino in 2004. We're a stronger company today thanks to his contributions," Brockelmeyer said.

"His resignation is in no way related to the allegations we have made against the former manager of our fleet department. In fact, it's important to point out that several of the departments that reported to Kevin were instrumental in discovering the alleged fraudulent activity."