Dallas Men Indicted for Alleged Participation in Oil and Gas Ponzi Scheme

Dallas Men Indicted for Alleged Participation in Oil and Gas Ponzi Scheme

Two Dallas men were indicted for their participation in a $485 million oil and gas Ponzi scheme. Brendan Coughlin, 46, and Henry Harrison, 47, both of Dallas, were charged with one count of conspiracy and ten counts of mail fraud in connection with the collapse of Provident Royalties LLC ("Provident"), an alleged oil and gas Ponzi scheme that involved over $485 million and 7,700 investors throughout the United States. Each count of mail fraud carries a maximum prison sentence of twenty years, while the conspiracy charge carries a five-year maximum sentence.

Beginning in September 2006, Provident sold preferred stock in a number of private placement offerings, promising annual returns of up to 18% from the acquisition and development of oil and gas exploration and development activities. Each offering was limited to five hundred investors, and Provident also solicited retail broker-dealers to enter into placement agreements for each offering, who then sold the investments to retail investors. Each offering featured representations that approximately 86% of funds raised would be used to purchase oil and gas investments, and that dividends would be paid from revenues generated by the sale of assets.

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For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

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Comments

Anonymous
Anonymous
  • 07-31-2012

I like to share preferred dividend means being first in line for company assets in the event of liquidation.