SEC Charges Two Kentucky Men in Oil-And-Gas Offering Fraud
SEC v. Scott Stacy Phelps and James Michael Harper, United States District Court for the Western District of Kentucky (Bowling Green), Case No. 1:18-cv-122
On August 30, 2018, the Securities and Exchange Commission charged two Bowling Green, Kentucky-area men with defrauding investors in oil-and-gas securities offerings. The SEC’s complaint, filed in federal court in Bowling Green, Kentucky, alleges that Scott Stacy Phelps and James Michael Harper raised approximately $611,000 by selling securities to nine investors between February 2015 and March 2016. Although they told prospective investors that the investment proceeds would be used to drill for oil in Kentucky, the main goal of the offering was to enrich Phelps and Harper. They spent the vast majority of the investor funds on themselves and their families, paying themselves generous six-figure salaries, and using the investor funds for rent, vacations, consumer goods, dating and adult websites, entertainment, golf, and hotels. They used a small amount to drill two wells. Neither well was commercially viable. Despite knowing this, the complaint alleges that Defendants continued soliciting additional funds from investors, purportedly to drill for oil in both wells.
The SEC’s complaint charges Phelps and Harper with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement, prejudgment interest, and civil money penalties.
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.
At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.