‘There’s One Born Every Minute …’

     SHERMAN, Texas (CN) – Big Rock Petroleum duped hundreds of people in a $24 million Ponzi scheme based on nonexistent oil and gas wells, 246 plaintiffs claim in Federal Court.



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     Lead plaintiff T.J. Agenbroad sued Big Rock Petroleum Inc. and its sole director J.A. McEntire III, of Little Rock, Ark.
     “In a related proceeding, a state court placed Big Rock into receivership, which resulted in a determination of no assets,” the complaint states. “The receiver confirmed, among other things, that the vast majority of the oil and gas working interests never existed.
     “During a parallel criminal investigation, Jim Retz (‘Retz’), a primary actor in the fraud, plead guilty to a criminal charge of mail fraud under 18 U.S.C. § 1341 on May 20, 2008. Retz committed suicide just days before he was to be sentenced.”
     Agenbroad claims that from 1995 until the receivership proceeding “Big Rock sold to hundreds if not thousands of investors located throughout the United States millions of dollars of worthless and fraudulent securities in the form of fictitious working interests in oil and gas prospects and transmission facilities.”
     A Department of Justice investigation found Big Rock pulled off the scheme by hiding well production data from employees and investors, while using new investors’ money to make “royalty payments” to other investors.
     Big Rock also sent financial statements and newsletters to investors, with phony well production data.
     According to the complaint: “Big Rock sold interests in approximately 210 gas wells in Wyoming, claiming that the gas wells were drilled and producing in Wyoming when, in fact, only one gas well was drilled and it did not produce gas.
     “Big Rock claimed to investors that it was operating oil and gas well projects when, in fact, Big Rock was not licensed as an oil and gas operator by the Texas
     Railroad Commission [which regulates the oil industry in Texas].
     “Big Rock sold interests in approximately eight oil wells in Texas called the Liberty
     Project, claiming that these wells were drilled and were producing approximately
     133-157 barrels of oil per day when, in fact, there was only one preexisting well and it did not produce oil.
     “Big Rock sold interests in approximately three oil wells in Texas called the Scurry
     Project, claiming that these wells were drilled and were producing approximately
     120 barrels of oil per day when, in fact, only one well was drilled. The well produced oil for approximately one week, was plugged and abandoned.”
     The investors say they bought interest in 222 securities Big Rock issued and sold, all of which “were entirely worthless and consisted of nothing more than lies and fiction.”
     They seek $24 million in actual damages for securities violations and fraudulent transfers.
     They also want the court “to order the defendants to account for and disgorge ill-gotten gains associated with the Big Rock Ponzi scheme.”
     And in the event that Big Rock or McEntire actually have any real actual oil-and-gas interests, the plaintiffs want them put in a constructive trust for their benefit.
     The plaintiffs are represented by Kenneth Johnson, with Kane Russell Coleman & Logan, of Dallas.

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