Victoria sheriff accused of white-collar crime

By Jessica Priest , Jon Wilcox

By Jessica Priest , Jon Wilcox
July 2, 2017 at 8 a.m.
Updated July 2, 2017 at 7:45 p.m.

Victoria Sheriff T. Michael O'Connor

Victoria Sheriff T. Michael O'Connor   YI-CHIN LEE/YLEE@VICAD.COM for The Victoria Advocate

O'Connor Lawsuit by Victoria Advocate on Scribd

Victoria County Sheriff T. Michael O'Connor is accused of breaking the law while running his energy company in a neighboring county.

Matthew Napiltonia filed a lawsuit Friday against O'Connor; his sisters; and their business, O'Connor Energy Management, in Refugio County.

Napiltonia, the business's former chief operations officer, claims he was fired after he uncovered "ongoing violations of state and federal law" by O'Connor, who was then acting as the business's CEO and manager.

Napiltonia claims O'Connor and his sisters - Lynn O'Connor Carter, of Austin, and Nancy O'Connor, of Houston - are now strong-arming him into signing a document that forbids him from reporting the crime to others.

When asked for an interview Friday, the sheriff texted that he had not received a copy of the lawsuit.

"I'll wait for an official copy if and when it comes," he wrote.

Napiltonia, meanwhile, declined to comment about the lawsuit.

According to the suit, Napiltonia was hired as the vice president of O'Connor Energy Management in November 2014 for a $100,000 salary, a 1 percent royalty of the minerals sold on a 16,000-acre piece of land in Refugio County per year and other benefits.

He was later promoted to chief operations officer, and his salary was increased to $166,000.

During his employment with O'Connor Energy Management, which was under a contract, the O'Connors approached Napiltonia and agreed to pay him for working on their estates and trusts. According to court documents, Napiltonia negotiated more than $600,000 in lump-sum payments to the family, for which he has never been paid. Some of the work that was unrelated to O'Connor Energy Management included:

• Refinancing a more than $1 million loan and rescuing a $10 million life insurance policy for the sheriff's wife, LuAnn O'Connor.

• Providing talent acquisition services and negotiating with a Houston law firm to hire the sheriff's son, Thomas Fleming O'Connor, after he had tried unsuccessfully for six months to obtain employment.

• Negotiating a $200,000 lump sum, each, to be paid for the sheriff's and his two sisters' Federal Income Tax liability related to the dissolution of the T.J. Cattle Company.

While acting as the chief operations officer for O'Connor Energy Management, though, Napiltonia claims he uncovered "ongoing violations of state and federal law" by O'Connor. He said he reported this to the company's board March 4. The board launched an investigation March 5, later abolishing O'Connor's CEO position in the business. O'Connor fired Napiltonia "without cause" March 10.

Napiltonia, in court documents, claims this was retaliation and the family is now withholding an $83,000 severance to which he is entitled. He claims they will not pay the severance until he signs a document waiving his right to report O'Connor for wrongdoing to anyone. The document also requires him to "not disparage or otherwise make negative comments" about O'Connor.

In addition to the civil lawsuit filed Friday, law enforcement may be investigating O'Connor.

Napiltonia claims in the lawsuit that he was interviewed by the FBI.

And Victoria County District Attorney Stephen Tyler said he received about two weeks ago a letter from Napiltonia that accused O'Connor Energy Management of wrongdoing.

Although Tyler said he is still researching the matter, he thinks what he has learned so far doesn't indicate a crime.

Tyler is not releasing the letter from Napiltonia because he claims it is not a public record because it was addressed to him personally.

But Joe Larsen, a Houston-based attorney who serves on the board of the Freedom of Information Foundation of Texas, disagreed.

Even if it was personally addressed, the letter should be public because it deals with the detection or prosecution of a crime, he said.

"That doesn't pass the smell test," Larsen said. "He's receiving it because he is the district attorney."

The Victoria Advocate filed Friday an open records request with the district attorney's office for the letter.

O'Connor has been sheriff since 2004. He is a fifth-generation member of a wealthy ranching, banking and oil family with vast land holdings in South Texas.



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