Dallas radio host charged with fraud by SEC for using oil and gas funds for club memberships, loans

According to a complaint filed this week by the US Securities and Exchange Commission, a Dallas-licensed petroleum engineer used a radio broadcast to lure investors into a fraudulent oil and gas investment opportunity.

Mark Plummer instructed the benefits of investing in oil and gas on KRLD’s “Smart Oil and Gas” radio show and encouraged listeners to call for more information. When they did so, they were referred to Petroleum Resources of Texas, a company that was secretly working with Plummer, the complaint said.

He encouraged people to invest in Petroleum Resources of Texas without revealing that it was owned by its former salesman, Mike Barrera, and that he was involved in it, according to the complaint filed Thursday.

Barrera is also not a registered broker, but he has acquired and sold securities, according to the complaint.

The company raised over $ 7 million from more than 70 investors for two oil and gas drilling projects from 2018 to 2020, the lawsuit said. Money was diverted to Plummer through his newest company, Richmond Engineering Inc., it said.

According to the complaint, Plummer then uses the funds to pay for club memberships, student loans, personal credit card debt, and car and mortgage payments.

Barrera, his business partner, also used funds inappropriately, it said.

“Barrera misused and embezzled investor funds, also to pay for his lavish lifestyle,” the lawsuit said.

Barrera also told investors that his company would manage well projects, although Plummer did, the lawsuit said. Three other people – Todd Prince, George Rauch and Todd Stuart Breitling – are also listed in the complaint as aiding and abetting fraud.

Plummer’s attorney Kit Addleman, a partner in the Haynes and Boone offices in Dallas and Fort Worth, did not immediately respond to a request for comment. Barrera has no advice.

Plummer formed the new company because his former company, Texas E&P Partners Inc., was similarly indicted in June 2019 for embezzlement of investor funds, according to the SEC.

Texas E&P raised $ 6.1 million from 2015 to 2017, and Plummer spent nearly $ 400,000 on personal use or inappropriate business expenses, including entertainment, travel, retail expenses, and income taxes, the indictments read.

He agreed to pay over $ 500,000 to pay the fees, according to the SEC.

Barrera was charged with grievous bodily harm with a fatal weapon in June 2014 and later pleaded nolo contendere.

In the case of repeat offenders, the question arises whether the punishment is severe enough. But the SEC is a civilian investigative agency that is limited in what it can do, including not putting people in jail, said SEC regional director David Peavler. And for some, no punishment will put them off, he said.

“Some people are criminals with an attitude of taking people’s money,” he said.

Barrera’s company has stopped filing for money, so the SEC is not filing an injunction, Peavler said. Instead, it will demand that the defendants stop offering oil and gas papers.

Recovery, if any, is impossible for investors to predict, Peavler said. In cases like this, the “bad guys” often spend the money on personal expenses, and when the SEC is involved, the victims don’t have much left, he said.

“Bad guys are good at spending money. They are scammers. They don’t put money in a 401 (k) or mutual fund, ”he said.

While it is possible to confiscate possessions in order to reclaim some of the money for duped investors, the problem is finding something of value that can be confiscated, Peavler said. The scammers often buy expensive houses, mostly mortgage-linked, and lease expensive cars, he said.

If the SEC gets involved, it finds that someone else has a right to those possessions, such as a car lease or mortgage company.

In oil and gas incidents, scammers often work on a bad well that has little to no potential so it can’t be sold much, he said.

Avoiding fraudulent investment opportunities can be as simple as verifying that the company is registered with the SEC, Peavler said.

“Scammers are counting on people not to do their homework,” he said. “The more research is done in advance, the less likely it is that someone will give their money to a stranger for a scam.”

Unfortunately, there will always be bad actors, so people need to learn to do their own research, Peavler said.

“I wish I could say these types of cases will go away sometime, somewhere, but they won’t,” he said.

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