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, a 32-year-old Dallas man who pleaded guilty in federal court to two counts of securities fraud. Long story short: Barber ran something called T-Bar Resources, LLC, which he used to sell interests in oil and gas drilling projects. Two of them -- Sierra and Sidnee, so named for his daughters, apparently -- didn't exist, and the one that did (Arrowhead) produced fewer than 15 barrels a day. Barber claimed it was pumpin' out 450.
Barber managed to get 300 folks to invest a combined $13.5 million in the projects -- very Lone Star. But, see, that show just got canceled. Barber? Per the release we just received from the U.S. Attorney's Office, he's getting the max sentence: 10 years in prison. U.S. District Judge Boyle also ordered that Barber pay $13,243,073 in restitution. The full what-for follows.
DALLAS MAN SENTENCED TO 10 YEARS IN FEDERAL PRISON
FOR RUNNING OIL AND GAS SCHEME
Defendant Also Ordered to Pay More Than $13 Million in Restitution
DALLAS -- Tommy Eugene Barber, 33, of Dallas, who pleaded guilty in December 2009, to two counts of securities fraud, was sentenced today by U.S. District Judge Jane J. Boyle to 120 months in prison, announced U.S. Attorney James T. Jacks of the Northern District of Texas. In addition, Judge Boyle ordered that Barber pay $13,243,073 in restitution. Barber has been in custody since mid-January 2010, when his pretrial release was revoked by a U.S. Magistrate Judge.
According to plea documents filed in the case, from May 2006 through November 2007, Barber and his associates offered and sold investments 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. 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.
Both personally and through his associates, however, Barber willfully misrepresented important facts about the projects. He also failed to disclose important facts to investors, which caused statements that he and his associates made to investors to be false and misleading.
In connection with the Arrowhead project, Barber deceived investors about the percentage of the project they were receiving. Barber also misapplied a substantial part of the funds that he raised for Arrowhead.
Barber raised funds for the Sidnee and Sierra projects by having his associates cold-call potential investors and claim that the oil and gas investments were conservative. In fact, however, Barber knew the investments were speculative at best. Barber also misrepresented the production levels of the Arrowhead project, claiming 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 Barber 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. Judge Boyle entered an agreed order of permanent injunction as to Barber and T-Bar on November 23, 2009. On December 2, 2009, Judge Boyle ordered that the case be stayed pending the resolution of the parallel criminal action.
This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Alan Buie, Special Assistant U.S. Attorney M. Cameron Smith and former Special Assistant U.S. Attorney Richard Zadina.