Solar, Wind, Bio, Energy News And Commentary By_Green Earl, 30 year Pioneer In Conservation & Solar Energy
Energy
Oil Slick
Jesse Bogan, 06.10.09, 06:00 AM EDT
(For Online Version Click On Link Above)
Authorities are still dealing with the scams last summer's spike in prices abetted.
HOUSTON -- "There's a new oil prospect in Texas that you don't want to miss out on. In fact, this well is going to be a gusher. You'll make a 40% return, maybe more. Our exploration and production firm was booked up to the gills, but you know what, somebody backed out at the last minute. There are just a few shares left.
For decades, peddlers of oil and gas investment schemes have fished for marks with such cold telephone calls. They continues to resonate with buyers across the country, mesmerized by the prospect of quick riches. When oil prices peaked last summer at $147 a barrel, fakes were there to offer something they couldn't deliver. Some are paying dearly with stiff sentences.
Today, as oil slowly rebuilds its steam, trading at $70 Tuesday, state securities boards are sifting through the fallout from last year, while they look for others that continue to operate.
"Although energy prices are currently low, we are seeing fraud cases emerge from the period when prices spiked," Texas Securities Commissioner Denise Voigt Crawford said in May, following the announcement of a 99-year sentence issued in a Texas state court against William L. Seelye for stealing $417,000 from dozens of investors in oil and gas exploration projects. "High prices attracted fraudulent energy promoters, and the decline of the stock market helped make investors more susceptible to the types of fraud for which Mr. Seelye has been convicted."
Officials say evidence at the trial showed that Seelye, who has appealed his conviction, lived off investor funds and sold interests in oil and gas projects that he didn't own.
Nationwide, there were 260 oil-and-gas-related alleged ruses logged by the North American Securities Administrators Association between 2005 and 2007. State securities boards, mainly in Texas, Colorado and Pennsylvania, issued cease and desist orders in 122 of those cases to operators who were mainly accused of selling unregistered securities for wells that usually either didn't exist or were dry.
Aspen Exploration Inc., of Plano, Texas, is one of the latest to be prosecuted. Indicted in federal court in May, the chief financial officer of Aspen, William Anthony "Tony" Rand, and his three sons face charges of conspiracy to commit securities fraud, mail fraud, wire fraud, money laundering and forfeiture. They and one other defendant allegedly tried to bilk $56.4 million from investors in the U.S. and beyond for two South Texas wells "by means of false and fraudulent pretenses, representations, and promises and omissions of material fact," according to the indictment. They are accused of using the collected funds for their own use and for drilling unrelated wells.
Tony Rand's attorney, Ted Steinke Jr., said all five of the defendants have pleaded not guilty. "The next step is trial, where they will all defend themselves vigorously," he said, declining to elaborate on the case.
In March, attorney Mark Alexander of Dallas also secured a $1.1 million civil judgment against a fourth Rand brother, Wayne, and the companies Black Lake Energy and Rock Wall Oil Co. Neither Wayne Rand nor representatives of the companies could be reached for comment Tuesday. Half of Alexander's practice is devoted to oil and gas securities fraud cases. "There are some great oil and gas companies out there but then there are some that scam," he says. "It really bothers me because [my clients] have worked hard all their lives and they lose their life savings."
John Hays, 67, who holds interests in natural gas leases, somehow made it on the "sucker list" of telephone numbers that salespeople use. However, Hays, who is publisher of the Morning Paper, a small weekly in Ruston, La., hit back by recording the calls. He says he has testified in three cases that made it to trial, and written about the ruses in his paper. "I've even been pitched for wells that have already been plugged and abandoned," he says. "It was supposed to be a real gusher. They will tell you anything to get your money."
Petro America Corporation, with offices in Kansas City, Kan., and Kansas City, Mo., allegedly marketed unregistered investments with grandiose returns, including through various churches, offering an opportunity to "share the blessing," according to a Missouri Secretary of State cease and desist order. The order states that the company's president, Owen Hawkins, said during a conference call that "my personal goal is I would like to create as many billionaires in this as I, as I possibly can."
A hearing is pending.
To the charge that the company was marketing an unregistered investment, Hawkins said Tuesday he had thought it was covered under a filing with the SEC. He said the company did not promote investments through churches, but rather a shareholder did. The company continues to advertise online, saying it's "the people's company" and has "world success unrivaled."
Hawkins said his 2-year-old company was valued at about $100 million.
"We are working on securing an oil block," Hawkins says. "We are in negotiations on that, and we also have storage facilities where we can store barrels of crude oil."
However, at the moment, he says the company doesn't have any oil in storage, and holds just 240 net acres in oil and gas leases in Missouri with no active drilling.
Reader Comments
These scams are going on in the renewable energy sector as well. I recently signed
a contract to raise $40 million for a solar project in Las Vegas. Many claims that
could not be backed up. One of the parties, after a Google search, actually had a
Federal Felony conviction for selling secrets to Iran! A DA in the county in Florida
where the other partner lived told me he had a large file on this partner._Green Earl
No comments:
Post a Comment