A press release just landed in the in-box concerning the tale of one Tommy Eugene Barber, a 32-year-old Dallas man who today pleaded guilty before U.S. District Judge Jane J. Boyle to two counts of securities fraud. And what did Barber do that could land him in prison for 10 years max, accompanied by a $500,000 fine? Operating as T-Bar Resources, LLC, he took $13.5 million from 300 investors to whom Barber sold interests in oil and gas drilling projects called Arrowhead, Sierra and Sidnee -- two of which (Sierra and Sidnee) didn't really exist, since he hadn't hired anyone to actually drill for oil and gas.
As for Arrowhead, says the U.S. Attorney's Office, Barber "claimed that it was producing more than 450 barrels a day when it was actually producing less than 15 per day." The whole narrative, about a boiler-room operation populated by "associates" cold-calling prospective investors, follows.
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DALLAS MAN PLEADS GUILTY IN OIL AND GAS SECURITIES CASE
DALLAS -- Tommy Eugene Barber, 32, of Dallas, pleaded guilty today before U.S. District Judge Jane J. Boyle to two counts of securities fraud, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Barber faces a maximum statutory sentence of 10 years in prison, a $500,000 fine and restitution. He is scheduled to be sentenced on April 1, 2010, by Judge Boyle.
According to plea documents filed in the case, beginning in May 2006 through November 2007, Barber and his associates offered and sold securities in three oil and gas drilling projects known as Arrowhead, Sierra and Sidnee. Barber received approximately $13.5 million in proceeds from more than 300 investors from the sale of the oil and gas interests. He operated through T-Bar Resources, LLC, out of Dallas and represented to investors that the oil and gas interests likely would earn profits and generate returns for investors, through purchases of oil and gas leases and drilling for oil and gas.
Barber, however, both personally and through his associates, made willful material misrepresentations of facts concerning the projects. In addition, Barber, both personally and through his associates, failed to disclose material facts to investors which caused statements they made to be false and misleading.
Barber oversold the Arrowhead project. As a result, he deceived investors about the percentage of the Arrowhead project they were acquiring. In addition, Barber misapplied a substantial part of the funds that he raised for the Arrowhead project.
He then raised funds for the Sidnee and Sierra projects by having his associates make cold calls to prospective investors, claiming that the oil and gas investments were conservative, when he well knew that they were speculative, at best. He misrepresented the production levels of the Arrowhead project and claimed that it was producing more than 450 barrels a day when it was actually producing less than 15 per day.
Barber made other misrepresentations to the Sidnee and Sierra investors, stating that the drilling was imminent or had already begun, when in fact, drilling had not begun and wasn't imminent because he had not employed or paid a driller/operator.
Sales literature that Barber used represented that the proceeds of the offering would be held in escrow until 80% 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% was raised. In fact, he withdrew and misappropriated the investors funds almost immediately after the funds were deposited.
The U.S. Securities and Exchange Commission filed a civil suit in November 2007 against T-Bar Resources, LLC, and Tommy Eugene Barber. Part of that complaint outlines T-Bar's "boiler room" operations. While the Court ordered on December 2, 2009, that the case be stayed pending the resolution of the parallel criminal action, an agreed order of permanent injunction as to Barber and T-Bar was filed on November 23, 2009.
The case is being investigated by the FBI and prosecuted by Special Assistant U.S. Attorney M. Cameron Smith and Assistant U.S. Attorney Alan Buie.