NEWS TIPS  ·   Advertise  ·   Post Jobs  ·   About Us  ·   Contact Us  ·   Log In  ·   Register

Click to Zoom
Print Email
Jul 11 2017

SEC Charges Five Individuals in Oil Well Offering Fraud

The Securities and Exchange Commission has levied charges against a purported oil well company, its founders, and three salespeople in connection with a $2.4 million offering fraud.

The SEC’s complaint, filed in U.S. District Court for the Central District of California, alleges that from approximately May 2014 to February 2016, Kentucky-Tennessee 50 Wells/400 BBLPD Block, Limited Partnership (K-T 50 Wells) fraudulently offered and sold unregistered securities to investors using a boiler room operation, raising approximately $2.4 million from 41 investors nationwide.

The complaint further alleges that Carol Wayland and her son, John Mueller, founded and operated K-T 50 Wells and conducted the offering through two other entities that they owned and controlled, HP Operations LLC and C.A.R. Leasing LLC.

To solicit investors, Wayland and Mueller allegedly set up a boiler room under the fictitious name of Sahara Wealth Advisors where they employed numerous salespeople, including Mitchell Dow, Barry Liss, and Steve Blasko, all of whom allegedly had prior experience working in boiler rooms.

According to the SEC’s complaint, K-T 50 Wells was supposed to develop and operate oil wells, but had little legitimate business activity.

Wayland and Mueller allegedly misappropriated investor funds for purposes not disclosed in the K-T 50 Wells private placement memorandum, taking at least $871,463, or 36 percent, to pay for their personal expenses, and using investor money to make Ponzi payments to certain other K-T 50 Wells investors.

The complaint also alleges that K-T 50 Wells made misrepresentations regarding Wayland and Mueller’s experience managing oil and gas investment projects, as well as the amount of returns that investors would receive.

The complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and civil penalties against all of the defendants.

Click here to visit The DI Wire directory page.

Article by: The DI Wire

Share this article!

Print Email

Directory Spotlight

The DI Wire's Email Alerts