Back in June, you may recall, downtown oil man (coughnotreallycough) Alan Todd May was caught in San Francisco, to which he'd fled following a filing by the U.S. Securities and Exchange Commission that said his Prosper Oil & Gas but little more than a front he used to steal, oh, $7 million or so from 174 investors. A few weeks after his arrest, May was indicted on one count of wire fraud and two counts of mail fraud.
The U.S. Attorney's Office just sent word: Yesterday in a Dallas federal courtroom May pleaded guilty to a single count of mail fraud and fessed up to his role in the Ponzi scheme. He'll be sentenced by Judge Jane Boyle on March 31, 2011, at which time the other counts will be dropped. Still, he faces a max statutory sentence of 20 years in prison and a $250,000 fine, and he could still be ordered to pay restitution could be ordered. Long story short, says the U.S. Attorney's Office:
May formed Prosper Oil & Gas, Inc. and was its president. Prosper purported to own and operate oil and gas leases in several states, including Texas, Oklahoma, Colorado and Arkansas. According to plea documents filed in the case, beginning in July 2008, and continuing through the beginning of March 2010, May ran a scheme to obtain, by false and fraudulent pretenses, obtained approximately $7 million from investors to purchase royalty interests in oil and gas leases. To sell these royalty interests, May, along with others, made various false and misleading statements to investors. For example, May and others told investors that the royalty interests for sale had yielded, or would yield, annual returns greater than 25%. As a result of these representations, Prosper sold purported royalty interests to more than 170 investors.Such as: a Ferrari, a Mercedes, a BMW and several Dallas homes, "each valued at approximately $1.5 million." This would make a great FOX hourlong drama. Oh, wait.
In fact, in operating their massive Ponzi scheme, May and others were: selling mineral interests that Prosper didn't own; overselling mineral interests that Prosper did not own; wildly overstating the production revenue for Prosper's leases in order to sell mineral interests; and making Ponzi payments, disguised as "royalty" payments, to investors. May admitted using investor funds for extravagant personal expenses and to make payments to his mother, daughter, brother and ex-wife.
