DALLAS (CN) - A 32-year-old Dallas businessman pleaded guilty to defrauding investors of $13.5 million through T-Bar Resources, which sold securities in oil- and gas-drilling schemes. Tommy Barber faces up to 10 years in prison, fines and restitution at his April 1, 2010 sentencing.
Barber admitted he took $13.5 million from more than 300 investors for securities in three oil and gas drilling projects known as Arrowhead, Sierra, and Sidnee. But prosecutors said he lied about the prospects and failed to disclose information as he pushed the paper from May 2006 to November 2007.
"Barber oversold the Arrowhead project. As a result, he deceived investors about the percentage of the Arrowhead project they were acquiring," the U.S. Attorney's Office said in a statement. "In addition, Barber misapplied a substantial part of the funds that he raised for the Arrowhead project."
Barber sold Sidnee and Sierra securities by having associates make cold calls, claiming that the oil and gas investments were conservative, though he knew that they were speculative at best. He misrepresented production at the Arrowhead project, claiming it was producing more than 450 barrels a day though it actually yielded less than 15 per day. He said that drilling was imminent or had already begun, though he had not even hired employed a driller or operator.
"Sales literature that Barber used represented that the proceeds of the offering would be held in escrow until 80 percent of the total offering was raised. In the case of the Sidnee and Sierra projects, however, Barber withdrew investor money from escrow long before 80 percent was raised," the U.S. Attorney said. "In fact, he withdrew and misappropriated the investors funds almost immediately after the funds were deposited."
The SEC filed a civil suit in November 2007 against T-Bar Resources and Barber, outlining T-Bar's boiler room operation. The court ordered on Dec. 2 this year that that case be stayed pending resolution of the parallel criminal action. A permanent injunction against Barber and T-Bar was filed on Nov. 23 this year.
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