DENVER (CN) - A Colorado Springs man defrauded 350 people of $10 million by promising astronomical returns from his oil and gas companies - American Energy Resources and H&M Petroleum - while spending $2.3 million on expensive toys for himself, including a custom speedboat, the SEC claims in Federal Court. Donald H. Allen pitched his scam nationwide through newspaper ads and cold calls, the SEC says.
Neither Allen nor any of his companies ever earned money, SEC Deputy Director George Curtis said. "Allen convinced investors to finance his projects without telling them about his actual uses of their funds or his dismal track record in failing to generate investor returns."
Besides his speedboat, Allen bought himself ski vacations, fitness equipment and jewelry with investors' money, the SEC says. He pushed his companies by claiming they had an "impressive record" of "several ... highly successful programs," and promised annual returns of up to "354 percent," all of which was eyewash, according to the complaint.
The SEC settled with Allen for $510,000, the Commission said in a news release.
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