Boomer bust

In the early 1980s, when oil was king, Bill Brosseau was the industry's crown prince. Just 35 years old and worth $10 million by his own accounting, Brosseau had an athlete's muscular build, movie star good looks, and a millionaire's accoutrements--a personal chef, an ostentatiously appointed condominium overlooking Turtle Creek, and a jet-black limousine with vanity plates that read "Argos"--after the ship the Greek hero Jason sailed in search of the Golden Fleece. He was, in short, a media dream, a camera-friendly geyser of charm and arrogance.

In an interview with Brosseau in those heady days, a Texas Monthly reporter asked him about a former partner and some investors who had filed lawsuits against him, claiming he owed them money. Brosseau, at the pinnacle of his success, regally dismissed the legal attack, saying: "Jealousy is the compliment that mediocrity pays to genius."

Not surprisingly, the local and national media crowded around Brosseau, anxious to profile the man who seemed to embody Dallas' nascent image--young, brash, and noisily successful. It was the go-go days of Dallas--fueled by high oil prices, cheap land, and the promise that sky-high profits would never end. Unfortunately, the Dallas of the '80s had the same relationship to reality and fleeting splendor as the television show of the same name. By the end of the decade, both would be embarrassing memories.

But thanks to writers who seemed never to tire of telling his story--and a savvy public relations man Brosseau kept on retainer to pitch it--Bill Brosseau became the '80s petroleum industry's pin-up boy. It didn't hurt that, at 6 feet 7 inches, he literally towered above nearly everyone, or that he was a flamboyantly committed bachelor, or that he was always willing to pose for a photo--especially if it was in knee-high, python-skin, monogrammed cowboy boots. In 1982 alone, he appeared in at least a dozen local, state, and national publications, including Money magazine, which put him on its cover for a story about "Moneymakers of the 1980s," and Cosmopolitan, which featured him as a "bachelor of the month."

Brosseau loved to take a reporter for a limousine ride to an East Texas state prison where he owned a producing oil well. While touring the prison grounds, he would recount his life story--how he grew up poor in San Antonio, the son of a banker who was sent to federal prison in Seagoville for embezzlement.

"When I was 12 or so, I went to Seagoville to visit him...and he was a miserable sight," a Dallas Times Herald reporter dutifully quoted in a story, one of the three the paper devoted to Brosseau in 1982. "And I was ashamed. I guess that's what I've been working at, proving that I could make it big without breaking the law or the rules."

Fifteen years later, it is the son whom federal prosecutors want to send to prison, and it appears that Bill Brosseau has more in common with his father than he ever realized--or at least admitted. Today Brosseau spends much of his time holed up in his three-story, $1 million University Park house with his girlfriend, Angelina, a doe-eyed Cuban refugee and former topless dancer he met on the beach in Acapulco two years ago, and their nine-month-old baby, Nicolette. And a day trip to a prison with a reporter in tow is the last thing he wants to do.

With gold-rimmed reading glasses perched on his surgically enhanced face--"to remove that tired look," he says--Brosseau, who turned 50 this month, pores over business records and legal documents piled on a glass dining-room table, looking for ways to extricate himself from what he describes as "one hell of a legal mess."

Bill Brosseau is, in the words of a lawyer close to his case, "in deep shit."

For the last two years, Brosseau ran Offshore Financial Corp. out of his home on McFarlin Boulevard. Much to the chagrin of his neighbors and the University Park city attorney--who successfully sued him for violating a zoning ordinance against operating a business in the neighborhood but has yet to collect the $24,000 in penalties--as many as a dozen salesmen would gather at Brosseau's house each day to pitch interests in oil and gas deals over the phone to potential investors around the country.

In September, the federal government shut down Brosseau's classic boiler-room sales operation after delivering him and his company a legal one-two punch. First, the Securities and Exchange Commission filed a civil suit against Brosseau and his former partner, Ken McKay, for securities fraud, freezing all the company assets. Five days later, a federal grand jury indicted Brosseau and McKay on more than 40 counts of related felony charges.

In essence, both the criminal and civil cases allege that Brosseau and McKay used false and misleading information to lure more than 200 investors into pouring over $8 million into four oil and gas ventures. Brosseau and McKay, the federal court documents say, then diverted between $2 million and $3 million of the investors' money for their personal use. Brosseau sunk close to $170,000 of investor money into his Acapulco villa, and McKay put more than $100,000 into a nonprofit corporation--ostensibly a charitable relief organization providing food and shelter for needy children--through which he purchased an $80,000 Mercedes sports car, according to SEC documents. By the time the SEC shut down the company, only one well was completed--a dud that only produced about $10,000 in revenue--and there were no funds left to complete the other three.

"There was no criminal intent with what went on," says a Brosseau drained of his '80s haughtiness. "I think I had very poor judgment with people." In the more than three dozen lawsuits filed against him by angry investors, partners, and banks over the years, Brosseau has consistently blamed his problems on other people. This time, Brosseau claims the fault lies with the company geologist, who he claims wildly underestimated the cost of the wells, and with his partner, McKay, who he says drained from the company more than $900,000 of investor money. Brosseau fired McKay, a former preacher turned high-powered salesman, after accusing him of having a cocaine addiction, according to court documents. Neither McKay nor his attorney returned repeated calls from the Dallas Observer.

But Brosseau's legal problems do not end with the SEC suit and federal indictment. A month after federal Judge Joe Fish ordered Brosseau to cease selling unregistered securities in oil and gas ventures, Brosseau allegedly defrauded a Colorado investor of $23,154 by selling him an interest in an oil lease for which Brosseau did not have a valid option, according to a second federal indictment. Despite Brosseau's protestations of innocence, a federal magistrate found him in contempt of court and threw him in jail--the same federal prison in Seagoville in which his father served time--where he remained for almost two months.

"Fifty days in jail at Christmastime is as painful as anything I've ever gone through in my life," says Brosseau, his eyes welling with tears. "Especially being away from the children."

Brosseau's two older daughters from an earlier marriage that ended in divorce visited their father in Seagoville during the holidays. Sitting in the common visiting area that resembles an airport gate, Brosseau, dressed in a prison-issue orange jumpsuit, tried to explain to the girls, ages 7 and 8, what was going on.

"Daddy's in a lot of pain, and he misses you more than you know," Brosseau told the girls. "This is like adult time-out. Every once in a while, adults do things, and this is where they have to go until things are sorted out."

Brosseau tells me he's "dead broke and scared to death" as he waits for his future to be sorted out--by either a jury or a federal prosecutor with whom he is negotiating a plea bargain.

Regardless of the outcome, it has been a long fall for Bill Brosseau. But Brosseau's adversaries contend that this slide is not so much about bad breaks as it is about exploding the myth of boldness and business shrewdness that Brosseau so carefully nurtured in the '80s.

Most people were attracted to and then entranced by the image Bill Brosseau wanted them to see. The man was charming and marvelous to look at, and he spun a good story--some of it was even true. Writers are drawn to a good Horatio Alger tale, and they loved to tell Brosseau's personal saga of growing up dirt-poor in an unhappy family of six children with alcoholic parents who hated each other.

"That's a lot of bull," says his mother, Helen Brosseau, who still lives in San Antonio and hasn't seen her son in almost 20 years. "There were three children, and he always had a good home. I was a buyer, and his dad, after he got out of prison, was a salesman. We made good money, and we only drank socially. Every time I read something about Bill, I got madder and madder. He once told me he felt his life was dull, so he had to spice it up."

Brosseau was embarrassed by his father's prison record, and that drove a wedge between the father and son, says Helen Brosseau. But even after his parents divorced 16 years ago, she says, her son still refused to visit her. She's never met her granddaughters. "I've not done anything to hurt him, but he has done things to hurt me," she says.

What is undeniable is that Brosseau had many talents. An excellent student and a basketball star at an all-boys Catholic school, he attended the University of Texas in Austin on a basketball scholarship. He went on to get a degree in dentistry, but he never practiced. He found the profession boring and couldn't stand the smell of the anesthesia. He became a stockbroker instead and experienced a modicum of success. Then a chance encounter with a neighbor changed everything. In 1978, the price of oil was starting to climb, and Don Hanvey, an independent oilman who lived in an apartment next to Brosseau's, asked him if he wanted to invest in his next deal. Brosseau watched his $10,000 investment grow to $350,000; a budding oil tycoon was born.

"It was the wildest time," Brosseau recalls wistfully. "There weren't any rules. We were doing deals and borrowing money at 20 percent. It was crazy, and it was fun. We were young, just starting our careers and believing this is what business is. Our parents talked about struggling, and here we were making it overnight."

By the early 1980s, Brosseau had a Rolls Royce, several Cadillacs, a limo and chauffeur who doubled as a cook, and several pricey condominiums along Turtle Creek and Northwest Highway. He claimed to have an interest in 100 working wells and a net worth of $10 to $15 million, depending on which article you read. Several of his former partners say they doubt Brosseau was ever worth near that much, and that his biggest talent in the oil industry lay in his ability to promote himself.

Whatever Brosseau's fortunes were, they took a precipitous dive in the mid-'80s, when the bottom fell out of the oil market. In 1986, Brosseau's company had total assets of about $1.4 million, according to court documents. But he owed several banks almost $800,000 in overdue loans. While he paid a little more than half of that back--the completed pay-out schedule is framed and proudly displayed in his study next to his framed magazine covers--the repayment deadline for the rest was rescheduled 11 times. The bank eventually reclaimed the collateral--two condos and some oil leases. During this same time, he failed to pay property taxes on two condominiums, a delinquent tax bill that would eventually rise to $37,500 by the late 1980s.

And throughout the second half of the decade, he faced in the neighborhood of 30 lawsuits accusing him of unscrupulous business practices, including advancing fraudulent, deceptive, and overpromoted oil deals. The plaintiffs soon learned that Brosseau was a pugnacious legal adversary. He frequently countersued and almost always dragged out the lawsuits over years, forcing his adversaries, in the face of mounting legal costs, to settle. Many of his frustrated opponents claim that suing Brosseau is the legal equivalent of drilling a dry hole: You pour money in and get nothing back--even if you win.

Brosseau insists the number and seriousness of his legal battles have been grossly exaggerated. And many of the suits, he says, were filed by investors who, after the price of oil plummeted, wanted to pull out of deals and leave him holding the bag.

If there were investors who tried to hornswaggle Brosseau, there were countless others who claim they were cheated out of money in deals Brosseau oversold or in oil wells which he didn't own the rights to sell.

William Litke, a Pennsylvania lawyer, thought he was investing in a Louisiana oil and gas lease Brosseau was peddling in the summer of 1987. Litke sent Brosseau a check for $45,000 to purchase a royalty interest in an oil and gas lease Brosseau claimed to own. According to a written agreement signed by a Brosseau employee, Litke's money was to be held in escrow and was totally refundable until he approved and executed a contract. In the ensuing weeks, however, Litke never received an executed lease assignment or a contract. In fact, Brosseau never had an interest in the Louisiana lease he was hawking, according to court documents. Litke repeatedly requested that Brosseau return his money--to no avail.

Litke finally filed suit in the fall of 1989 claiming fraud and misrepresentation. He and Brosseau entered into a settlement agreement for $62,000--which Brosseau promptly breached. In 1991, Litke filed suit against Brosseau again. But six months later, Brosseau's company filed bankruptcy. Three years later, when the bankruptcy was finally behind Brosseau--a judge denied his reorganization plan, thus allowing creditors to pursue him-- Litke reasserted his claim. Finally, a frustrated Litke just gave up on the advice of his Dallas attorney, who was billing him at $150 an hour. "He was throwing good money after bad," says Ernest Leonard, Litke's attorney.

In a case that dates back to the winter of 1992, Brosseau agreed to help a Llano man named Robert Ralston collect a $39,000 judgment due him from a Dallas oilman who happened to be Brosseau's arch rival, G.B. Greiner. Greiner was once Brosseau's partner, but he claimed Brosseau cheated him out of millions in a successful Louisiana oil well.

Brosseau was successful in getting Ralston's $39,000 out of Greiner. Over the next year, Brosseau made repeated assurances to Ralston that he would turn the $39,000 over to him, but Brosseau was in bankruptcy at the time--a salient detail he failed to disclose to Ralston--and the recovered money disappeared into his bankruptcy estate. Ralston filed suit, alleging, among other things, fraud.

"I did what his lawyer couldn't do--get the money owed him, then he didn't want to compensate me a dime," says Brosseau. Brosseau fails to mention, however, that he had signed a letter agreeing to give Ralston all the money he collected on his behalf. Last May, Ralston won his claim against Brosseau in a summary judgment. Ralston has yet to collect a cent.

"Brosseau is the son of the devil, the prince of darkness, the father of lies," says one lawyer, whose elderly client invested $150,000 with Brosseau--and mortgaged his house in order to do so. The man invested in Brosseau's company, of which he became 10 percent owner, on the strength of its profit record, which Brosseau claimed had been $1.9 million the previous year, according to court documents. The man learned that the company did not even exist until three days after he made his investment.

The man also sank money into an oil well that Brosseau claimed was producing 3,000 barrels a day. Brosseau charged the man three times the purchase price and vastly overstated the production potential. "He calculated the number of barrels on the basis of a test run," the lawyer says. "But chalk wells die out quick."

Brosseau agreed to settle with the man for $50,000. And he actually paid it--with other investors' money from the most recent oil ventures he was selling, the ones for which he may go to prison.

"He's a very bright guy," says one of Brosseau's longtime enemies. "If he didn't have this dark side to him, if he dealt professionally and legally, he'd be so rich he couldn't spend it all. I don't know how he sleeps at night. With Bill Brosseau, it's always somebody else's fault. What's happening to him now has been a long time coming. He hurt a lot of people."

Over the years, Bill Brosseau has been likened to Howard Hughes, because he's an idiosyncratic loner with a habit of inspecting people's nails and teeth for imperfections and an aversion to food kept or cooked in his house.

In addition to his eccentricities, Brosseau had the tendency to be imperious and narcissistic. A decade and a half ago, when I spent an evening interviewing him, he opened the interview by screaming at the photographer to get his "greasy camera" off his $14,000 cream-colored couch. Later, over dinner at The Mansion, to which we were driven three blocks from his condominium in his black limo, he announced that he found the idea of marriage and children "appalling," and that he was certain he could never remain faithful to any one woman.

"When I first came to work for him, he told me to buy 30 bottles of perfume for his girlfriends at Christmas," says Tammy Wagner, who served as Brosseau's assistant for 12 years, until the day the SEC shut him down. "He was the epitome of a playboy."

Though Brosseau was an avowed Lothario, throughout the countless affairs he saw one woman steadily for almost eight years. Carolyn Shamis, a successful real estate agent who marketed only million-dollar homes and drove her own Rolls Royce, put up with Brosseau's shenanigans, albeit reluctantly. Ultimately they broke up, but they remain close friends.

"I always saw another side to him than the cold, calculating, arrogant person he portrayed," says Shamis. "When we dated, I was the most balanced I've ever been in my life. We worked hard, played hard, and even slept hard. We made every minute count. He wanted you to be the best you could be. But he always marched to a different drummer."

Says Brosseau: "Carolyn would call the office, and if she couldn't get through to me, she would tie up all the incoming lines until I came to the phone. I had a philosophy back then that when I'm with you, you have 100 percent of my time, attention, and respect. But when I'm away from you, it's my time. Of course, now I think that's totally bullshit. I caused a lot of pain. But I was incapable of love. Hell, I wasn't even human. Having three daughters will sure change a man's perspective on how to treat women. I was the biggest jerk in the entire world. I'm proud to say that I'm not anymore."

In 1987, Brosseau abruptly decided to settle down--or at least get married. After a two-and-a-half-week courtship, he married Teresa Lucas, a former Miss Oklahoma who was 16 years his junior. The union and the two children they had in quick succession hardly tamed his wild ways. Brosseau had developed a serious dependency on cocaine and alcohol, a "weekend addiction," he says. He engaged in extramarital affairs, and he still regularly frequented the Rio Room, the Knox-Henderson area club that at that time catered to Dallas' flashiest players and wannabes. "It was the gates to hell where there are no rules," Brosseau says. An incident one night at the Rio Room served as a milestone on Brosseau's slide. Brosseau got into a shoving match with an aggrieved former partner who believed Brosseau had cheated him out of a tidy profit in an oil well. Brosseau says that two men who were with him that night badly beat the man after he tried to fondle Brosseau's wife and cursed Brosseau. The police questioned Brosseau, he says, but no charges were filed.

Brosseau's marriage was also a mess. Teresa would later tell a psychologist that her husband was "controlling and aggressive in the marriage and in his approach to life in general," according to the psychologist's report, which was filed with court during their divorce proceedings. Teresa also confided that she was worried about her husband's business dealings and mounting lawsuits, some of which named her as a co-defendant because Brosseau had put many of his business transactions in her name after they married.

Brosseau told the psychologist that "Teresa was incapable of intimacy or emotional closeness in the marriage...[He] insisted that Teresa never appreciated his love or his desire to love her." The psychologist described Brosseau as someone who justifies "their assertiveness by pointing to the hostile and exploitive behavior of others...Such persons are risk takers and are not readily responsive to rules or conventional values."

In the fall of 1992, Brosseau's world was falling apart. He was on a financial precipice. His addictions were ruling his life. In September, his wife took the children, moved out, and filed for divorce. Brosseau was crushed. He was adamantly against the divorce--"I am uncomfortable with failure," he says--and claimed still to be in love with Teresa. He threatened to drag the divorce out for years, a promise he kept. He fought for custody, claiming he was the more involved parent, and ultimately acted as his own attorney. During the custody dispute, both sides exchanged accusations of drug use and infidelity--including a debauched evening that ended in an orgy.

With the help of a therapist whom he still regularly sees, Brosseau finally kicked his drinking and drug habits. He says his reason was simple: He wanted to be a better father to his daughters. He could not surmount his business woes, however, and in late 1992, he filed for personal bankruptcy.

"Dealing with Bill Brosseau is like trying to get your arms around smoke," says John Barr, who represented Teresa in her divorce. "He caused my client a lot of misery and made us spend a lot of money. Even when he was representing himself, it was like dental flossing with a circular saw. It removes plaque--and a lot more. He's one of the smartest people I ever met in my life. You have to respect someone who has no background in law and does a better job than most attorneys I know."

In the fall of 1994, two years after Teresa filed for divorce, Brosseau agreed to settle, says Barr. All Teresa was asking for was child support--$1,750 a month--and custody, and that's what she got, Barr says. Brosseau has the children every other weekend, starting on Thursday nights, and all summer. Ever the competitor, Brosseau tells me he sees the children more than his ex-wife, given that while in her custody, they're in school most of the day. Scorekeeping aside, by all accounts Brosseau is a doting, devoted father who attends every school function and walks his children to school the days they're with him.

"I hate to admit it, but you would think this guy is father of the year," says Barr, whose children attend the same school as Brosseau's oldest daughter, Jordan.

In November of 1994, with his divorce, addictions, and bankruptcy behind him, Bill Brosseau was poised for a comeback. His opportunity came in the form of a 38-year-old, toupee-wearing, fast-talking, former youth minister named Ken McKay. For several years, McKay had worked as a telephone solicitor for Kinlaw Securities Oil Corp., a huge purveyor of oil and gas investments that had raised more than $150 million from investors by the time the SEC sued the company for securities fraud in 1992.

McKay was flat broke, but had a lead on four promising oil and gas leases in South Texas and Louisiana, which had been brought to his attention by a geologist with solid credentials who had headed a division of Oryx for a number of years, and a respected petroleum engineer.

Brosseau liked what he heard about the wells and agreed to provide the start-up capital for what would become Offshore Financial Corp., of which Brosseau would assume the title of president and McKay that of chief executive officer.

"I was totally charmed by the guy," says Brosseau, who had met McKay socially a number of years earlier. "I liked the idea of helping Ken get back on his feet. The day he walked in, I gave him $1,000. He said he didn't have any money to buy his son Christmas presents. I took him away to Acapulco with me. I couldn't have cared more for a person."

Brosseau says he carried McKay for the first few months, before the company was up and running, the salespeople hired and trained, and the money coming in. It didn't take long. "Ken McKay was one of the best money-raisers I had ever seen in my life," says Brosseau.

The first thing McKay and Brosseau did was sit down and determine how much money they planned to raise for each of the four leases. The geologist and engineer provided them with a cost estimate that included the leasehold price, plus the well drilling and completion costs. McKay and Brosseau then significantly jacked up the price of each prospect--in some cases by a factor of three or four. The first lease they pitched, for instance, the Leeville prospect in Louisiana, was estimated to cost $160,000 from start to finish. Offshore charged investors $784,000.

This was done, in part, so that Offshore could absorb possible cost overruns on the wells. It also provided money to defray company costs--sales commissions, phone bills, office expenses, which in this case actually meant Brosseau's $3,653.92 monthly mortgage--and have enough left over for a handsome profit for McKay and Brosseau.

"It would be win-win for everyone," says Brosseau.
Not exactly. It was a win for Brosseau and McKay if the cost overruns didn't eat up all the investment capital. The first well did cost more than expected--a total of about $260,000--but extra money raised from investors was enough to begin returning Brosseau and McKay to the good life. Over the next year and a half, McKay would move into the swank Centrum apartment building, buy a $40,000 diamond-encrusted Rolex watch, and buy and sell eight expensive sports cars, according to Brosseau. Brosseau would put in a swimming pool, jet off to his Acapulco villa, buy a $43,000 Mercedes, and undergo plastic surgery.

But for the investors, it would only be a win if the wells produced oil and gas and lots of it. Leeville did produce for a while, but nowhere near what Brosseau and McKay had promised investors it would. The SEC claims they had inflated the geologist's projected oil reserves to entice investors. What's more, they oversold this lease, thus potentially diluting the production revenues due investors. But it didn't matter. The revenue checks Offshore sent to Leeville investors had no basis in reality anyway. The SEC alleges Brosseau was taking money from investors in future wells and using it to pay dividends to Leeville investors. That made the Leeville well look more profitable than it was, enticing investors to sink more money into other ventures.

The way Brosseau structured the company, he and McKay won big, even if his investors lost. But that scheme would eventually catch up with them.

There is nothing wrong with building in profits to a deal, according to the SEC, as long as it is disclosed to investors, which the SEC contends Offshore clearly did not do. In fact, Brosseau and McKay and their salesmen revealed few pertinent facts to prospective investors. They failed to mention, for example, Brosseau's recent bankruptcy proceedings and the fact that he was presently being sued by a group of German investors who claimed Brosseau had defrauded them on an oil deal that cost them $275,000 in losses.

Under McKay's tutelage, the Offshore sales staff learned the art of high-pressure solicitation. The sales staff was instructed to "minimize the risks of investing in oil- and gas-drilling operations and to instead emphasize the remarkable and long-lasting investment returns investors should expect," according to court documents. In some instances, sales staff offered guarantees of returns and assured investors that their money was going to be held in separate escrow accounts to pay legitimate expenses.

Investors in one well were assured by Brosseau that at least one-third of their investment was secured by German Gold Bearer bonds worth $1 million--a very misleading statement. The bonds, which Brosseau purchased for $10,000 from Richardson businessman William Morgan, are part of an international controversy, which makes them highly speculative at best. The Gold Bearer bonds, which brokers have begun trading recently, were issued by the Weimar Republic to make World War I reparations, and the German government, claiming many of these bonds had been stolen after the war, has balked at paying on them.

If a potential investor expressed interest in a deal over the phone, Offshore would overnight them an offering brochure with information that "can only be described as scant," according to the SEC. The prospectus contained no information on how the investor money was to be used or how the sales staff and directors were to be compensated. The packets did contain a stack of Brosseau's old press clippings and a brief resume that reads, in part, that Brosseau has "established and maintained [an] excellent reputation as one of the most reliable, trustworthy, and successful operators in this field."

Investors would soon learn otherwise. Offshore Financial's troubles started with the second lease they pitched to the public--the Anse La Butte oil well in Louisiana. The well was estimated to cost $1 million to complete. Brosseau and McKay raised $3 million, but it turned out that even that wasn't enough. The well wound up costing $3.3 million, which ostensibly meant that the well had gobbled up their anticipated profits--and then some. But the shortfall was greater than just $300,000, because some of the money raised for the Anse La Butte project went to pay investors "production revenue" from the Leeville well. The federal indictment alleges that Brosseau and McKay also diverted money raised for Anse La Butte to their personal use. Brosseau and McKay bridged the gap, according to court documents, by using monies that were being raised for their next two prospects--the Simons #1 and Simons #2 gas well projects in Bee County, Texas--to pay the drilling costs on Anse La Butte.

When the SEC and U.S. attorney's office closed in on Brosseau's company, Anse La Butte, which to date has only produced water, needed $500,000 to be reworked; Simons #1 was near completion, but the company owed $1 million. Work on Simons #2 hadn't even begun, but the $1.3 million raised for it was gone. In all, Offshore had obligations of close to $3 million and no way to meet them. Meanwhile, during the almost two years that Offshore was in business, Brosseau made $1.3 million (he has since repaid the company about $300,000) and McKay $1.1 million.

"Any reasonable investor assumes there is some risk involved," says SEC trial attorney Phil Offill. "But one risk they don't assume is that someone will be lining their pockets with their money."

Brosseau may have gotten away with this scheme of using the investments in one well to pay the investors and defray costs on a previous deal indefinitely, had it not been for a falling-out between him and McKay. Last spring, McKay began behaving erratically, with terrible mood swings, Brosseau says. Several staff members told Brosseau that they believed McKay was using cocaine, according to their signed affidavits. In April, Brosseau confronted McKay, accusing him of being an addict, and offered to pay for treatment.

"He told me he was a man of God and was not going to be treated this way," says Brosseau. McKay stormed out of the house, Brosseau says, and left the company, taking several salesmen with him. A few weeks later, he set up his own boiler-room operation in his apartment. Then he filed suit against Brosseau, claiming he was owed even more money from Offshore. McKay's lawsuit provided the SEC with a "rich resource" in pursuing a case against Brosseau, "whose activities were known to us," says Offill.

One recent weekday afternoon, Brosseau returned home, elated over his latest business transaction. The neighborhood service station had informed him that his 1994 black Chevy Silverado truck needed a new battery. But instead of purchasing it there, he explains to me, he decided to go to Sears Automotive Center.

"I saved a bunch of money," he says with genuine pride in discovering the fine art of discount shopping, something he is having to get used to. "I am broke and depending on friends. It's a lot of fun," he says sarcastically.

Angelina, who attends therapy sessions with Brosseau each week, says she doesn't fear what might happen, even losing what little money they have left. "My family came to this country when I was seven with one suitcase between us," Angelina says. "I never had any money, so I know what it's like. I know we'll make it again. But I am worried about what this is doing to Bill psychologically."

They spend their time close to home, playing with their baby and his older daughters when they come for visitation, and socializing with friends. "A wild night for us is two movies," Brosseau says. A few weeks ago, actor Gary Busey and his wife flew in from Los Angeles to spend a quiet weekend with the Brosseaus, who had thrown them a pre-wedding party last fall, complete with a Buddy Holly look-alike.

Brosseau met the actor through McKay, who knew Busey's wife. Brosseau says he helped Busey--whose drug and alcohol addiction led him to a near-fatal motorcycle accident several years ago--to become clean and sober by sharing his own battle against addiction.

Despite all his therapy, Brosseau clearly still does not accept any blame for the Offshore mess. Instead, he sees himself as a victim. If he hadn't tried to help McKay, he wouldn't have gotten burned, he believes. He insists he did not set out to defraud his investors: "If I had, I would have never drilled any wells. My name would not have appeared anywhere. Believe me, no one worked harder than I did to make this thing work."

He has begun negotiations with the U.S. Attorney's office and does not yet know if he'll have to serve prison time and how much. "I don't know if I have a bad case of the flu or terminal cancer," he says. "This is a whole other game, a game I don't know how to play. I am scared to death."

What makes him the angriest, he says, "is that for the first time, I had my life where I wanted it to be. I was comfortable in my skin for the first time ever. I hadn't had a drink or done drugs in three years. I was with the woman I wanted to be with and had a new baby.

"I thought I finally had my demons behind me.


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