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Fri May 11, 2012
Judge Orders $13 Million Restitution In Oil Scam
LOUISVILLE, Ky. -- A federal judge has ordered six men to pay $13 million in restitution to victims of an oil and gas drilling scheme in Kentucky.
Senior U.S. District Judge Joseph M. Hood on Friday found that the men deliberately misled investors about the risks and possible rewards of investing in a company called Target Oil & Gas.
The case centered on how the men raised money for Target Oil. Prosecutors contend the company raised $3,192,793.50 from investors between 2003 and 2008, but only paid out about $37,000 in royalties. Prosecutors say the company asked investors to fund drilling projects in Kentucky, Texas, West Virginia and Tennessee but allegedly used fraudulent marketing materials and false geological surveys to persuade them.
Five of the six men were sentenced to federal prison.