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The Associated Press November 9, 2010, 1:05PM ET

Matrix CEO, CFO resign after fraud by employees

Shares of Matrix Service Co. plummeted 11 percent Tuesday after the company said two top executives had resigned after an internal fraud investigation.

Matrix did not say if the departures are related to the investigation. Both executives are joining the same mid-size oil company.

President and CEO Michael Bradley and vice president and chief financial officer Thomas Long will leave this month, said Matrix, which is based in Tulsa, Okla.

The departures come weeks after an internal investigation concluded that current and former employees had embezzled about $1.7 million.

A U.S.-based worker helped a Matrix subcontractor bill the company for $1.7 million improperly, Matrix said in its annual report filed Sept. 29. Most of the money went to five current and former Matrix employees over four fiscal years, it said.

To conceal the scheme, the employees overbilled other Matrix clients by $1.3 million, Matrix said. Matrix later reimbursed the clients, and expects to recoup money through insurance.

The investigation cost Matrix $500,000 in the quarter that ended Sept. 30, the company said in its quarterly report last week. The company, which provides industrial construction, repair and maintenance for the energy industry, does not expect to incur costs in future quarters.

Matrix plans to cooperate with investigators, it said in filings with the Securities and Exchange Commission.

Matrix chairman Michael Hall will lead the company while it seeks to replace Bradley and Long, the release said. Hall served as president and CEO until 2006.

Separately, Bradley sold more than $85,000 worth of Matrix stock on Saturday at $10.29 per share, according to a Monday regulatory filing. The money covered taxes on other compensation that Bradley received, the filing said.

Shares of Matrix fell $1.18 to $9.62.

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