Man who died in standoff faced federal fraud charges from alleged BP oil spill scam

PortCityDaily.com is your source for free news and information in the Wilmington area.

Authorities watch as negotiations take place with a man who shot himself inside a Third Street home on Wednesday.  The man has since been identified by U.S. Marshals. Photo by Hanna Leyva.
Local and federal authorities watch as negotiations take place with a man who shot himself inside a South Third Street home on Wednesday. The man has since been identified by U.S. Marshals. Photo by Hanna Leyva.

A man who died in a hourslong standoff with U.S. Marshals and local authorities Wednesday evening had been scheduled for trial that day in Washington D.C. on federal charges he bilked the Deepwater Horizon oil spill compensation fund out of more than $2 million. A federal indictment said Michael R. Rosella had created a fictitious business with fictitious investors that he claimed had lost millions as a result of the April 2010 gas explosion and oil spill at a British Petroleum oil rig in the Gulf of Mexico.

Rosella, 45, of Wilmington, died from a self-inflicted gunshot wound as U.S. Marshals attempted to serve a warrant for failure to appear at his home in the 400 block of South Third Street, according to Deputy U.S. Marshal Bryan Konig.

A warrant for failure to appear was issued when Rosella reportedly didn’t show up for his Wednesday court date, Konig said. According to federal court records, he was scheduled to appear for a trial in U.S. District Court in Washington D.C. on charges listed in a February indictment.

According to the U.S. Department of Justice, Rosella was arrested in Wilmington on Feb. 23 in connection with a federal indictment, in which he was charged with one count of mail fraud, three counts of wire fraud and two counts of money laundering.

The indictment alleged Rosella made fraudulent claims to the $20 billion trust fund set up by British Petroleum (“BP”) in June 2010 to compensate victims of the April 2010 Deepwater Horizon oil spill incident in the Gulf of Mexico.

Federal prosecutors allege in the indictment that between July 2010 and June 2012, Rosella, who lived in Washington D.C. at the time, devised and executed a scheme that enabled him to obtain more than $2.3 million in fraudulent claims from the oil victim’s fund.

Rosella allegedly submitted claims for reimbursement of lost profits on behalf of a fictitious entity called the Bayou Barataria Sportsmen’s Resort, which he claimed to be a successful hotel and sport fishing business in Louisiana immediately before the spill and suffered lost profits due to the spill’s impact on the Gulf, according to the department of justice.

Federal court records show Rosella was released from custody under a $100,000 unsecured bond on Feb. 23 and was placed under the supervision of the U.S. Probation Office. Rosella was ordered to remain in North Carolina with limited travel until his scheduled trial date.

The morning of his trial, Wilmington Police Department Spokeswoman Linda Rawley said police responded to Rosella’s home for a check welfare call but officers did not find anyone at the home.

U.S. Marshals later went to the home to serve the warrant for failing to appear at about 4 p.m. Wednesday, where they found Rosella armed and barricaded inside. Traffic was blocked in the area on Third Street for about five hours, as multiple agencies worked to negotiate him from outside the home, Rawley said.

The standoff ended shortly before 9 p.m. when Rosella was found with a self-inflicted gunshot wound. EMS crews, New Hanover County Sheriff’s deputies, along with the Wilmington Police Department’s Bomb Squad and SWAT team assisted U.S. Marshals in the incident.