This week, the Securities and Exchange Commission announced that it had filed charges against Texas resident James VanBlaricum and six others for running an oil and gas Ponzi scheme. The complaint alleges that the defendant was the driving forced behind Texas Energy Mutual. Since he was a securities fraud recidivist with a history of running fraudulent schemes, the complaint claims that VanBlaricum convinced Chet Inglis and Rodney Pope to serve as the face of the company. They went on to enlist Matthew Leaverton, William Hill, Erik Rhodes, and Robert Gilliam to solicit investors.
The complaint accuses the defendants of raising more $10 million by guaranteeing investment returns and promising investors that their funds would be used to drill oil wells. Instead, the money was allegedly used for personal expenses, including wedding costs and international vacations. The complaint also accuses of VanBlaricum of creating a “special needs” program to prevent dissatisfied investors from finding out about the fraudulent conduct.
The defendants are accused of lulling investors with cash Ponzi payments that were supposedly returns on their investments or rolled over investors from a failed drilling program to a newer one. In addition to the SEC’s action, Pope, Inglis, Leaverton, Gilliam and VanBlaricum were charged in a parallel criminal case. Each has pleaded guilty and were sentenced to prison terms ranging from 30 to 84 months. Further details can be found here.
