DALLAS (CN) - A federal judge sentenced a Dallas businessman to 10 years in prison for his role in a $14 million oil and gas securities fraud. Tommy Barber, 33, was also ordered to pay $13.2 million in restitution.
Barber pleaded guilty in December 2009 to two counts of securities fraud. He admitted he defrauded hundreds of investors of $13.5 million through T-Bar Resources LLC, which sold securities in oil and gas wells that were not producing or had not even been drilled.
Barber admitted he took $13.5 million from more than 300 investors for securities in the Arrowhead, Sierra, and Sidnee projects. 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 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 they were speculative at best. He misrepresented production at the Arrowhead project, claiming 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 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's Office said. "In fact, he withdrew and misappropriated the investors funds almost immediately after the funds were deposited."
The SEC sued T-Bar Resources and Barber in November 2007, outlining T-Bar's boiler-room operation.
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