Crowdfunding Oil & Gas Schemers Fined $7.2 Million

LAS VEGAS (CN) — A crowdfunded oil and gas development fraud has ended, with its promoters ordered to pay $7.2 million in penalties, interest and disgorgement.

Joseph Gabaldon and Ascenergy LLC were ordered to pay the money Tuesday in a final judgment in the SEC case against them.

Gabaldon and Ascenergy agreed to the judgment in June 2016 without admitting or denying guilt and waived their rights to appeal, U.S. District Judge Gloria Navarro said in her final order.

The SEC accused them of two counts of securities fraud and filed a third count against relief defendants Pyckl LLC and Alanah Energy LLC.

Gabaldon, of Southern California, used Ascenergy to sell some $5 million in unregistered securities to about 90 investors, promising them large returns from oil and gas exploration in sandstone formations.

But Gabaldon spent $1.2 million on himself and transferred the rest to Alanah and Pyckl, the SEC said.

Gabaldon, CEO of Ascenergy, shut it down after the SEC subpoenaed him and other company officials, and transferred the balance to Pyckl.

San Jose-based Pyckl is a California company with no connection to the oil and gas business. The SEC said it appeared only a few thousand dollars went to actual oil and gas exploration, and none was produced.

Navarro ordered Gabaldon and Ascenergy to disgorge $5,112,473 in profits, minus any amounts actually paid by Alanah and Pyckl.

Gabaldon and Ascenergy also must pay $197,217 in prejudgment interest, Gabaldon another $320,000 in civil penalties, and Ascenergy $1,550,000 in civil penalties.

The $517,278 already seized by the FBI will apply toward the $5,112,473 Gabaldon and Ascenergy must pay.

Alanah is liable for $103,890 in disgorgement, plus $4,670 in interest.

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