On behalf of Mihalek Law posted in Securities Law on Thursday, May 12, 2016.
It takes just an hour and 30 minutes to drive west from Lexington to New Albany, Indiana. The modestly sized city sits across the Ohio River from Louisville. It’s there that a securities fraud scheme was launched, investigators say, reeling in more than 150 victims from around the nation.
An area man was recently taken to the county jail on felony charges of fraudulent sales of securities, violating broker requirements and selling unregistered securities. The 65-year-old looks downcast in his booking photo, as if he sees a grim future for himself.
The accused is one of 15 people who face charges related to the scheme that looted investors of $110 million over a decade. One investigator said that the estimate of damages is a conservative one that could grow as the inquiry unfolds.
At the center of the scheme is a company called Earth Energy Exploration Inc. (EEEI). It was the umbrella under which another 70 sub-companies existed. Sometimes investors were sent statements indicating that they had made a nice return on their stake in EEEI. The investigator said that was simply part of a ruse designed them to sink even more money into the scam.
He said that in some cases, potential investors were taken to an oil well under the pretense that they were looking at EEEI investments at work. Unfortunately, it can be easy to lure investors to fraudulent oil and gas schemes.
People understand that the energy industry is one in which enormous profits can be made, and that if they venture nothing they will gain nothing. When it turns out that their investments were used to finance the lavish lifestyles of swindlers, many investors give up hope of getting their capital returned.
However, with the help of attorneys experienced in securities arbitration, it is possible to recover those funds.