DALLAS (CN) - A Dallas man pleaded guilty to mail fraud for his role in a $7 million oil and gas Ponzi scheme. Alan Todd May, 45, admitted he raised $7 million under false pretenses - including selling royalty interests from leases he did not own, U.S. Attorney James Jacks said.
May was founder and president of Prosper Oil & Gas, which claimed to own and operate oil and gas leases in several states, including Texas, Oklahoma, Colorado and Arkansas.
Prosecutors said May sold royalty interests in leases he did not own to 170 investors for about 2 years. He promised annual returns greater than 25 percent, wildly overstated production and revenue for leases and made Ponzi payments he misrepresented as royalties.
May also admitted he spent investors' money on extravagant personal expenses and handed money to his mother, daughter, brother and ex-wife.
Under the terms of the plea agreement, prosecutors will dismiss one other count of mail fraud and one count of wire fraud.
May faces up to 20 years in federal prison and a $250,000 fine. Sentencing is scheduled before U.S. District Judge Jane Boyle on March 31, 2011.
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