Local oil exec faces prison in fraud case

A Houston oil executive was sentenced to state prison for defrauding investors who thought they were paying for the drilling and testing of wells — but instead paid the executive's mortgage.

Daniel Walsh, the CEO of Houston-based Western Capital, was sentenced to 18 years in state prison on Friday, the Wichita County District Attorney's Office said.

Walsh, a Galveston oilman, pleaded guilty to money laundering last week after raising money for the drilling and testing of oil wells in Galveston between 2007 and 2009, but spending it on his personal expenses instead, authorities said. Susan Norman, one of Walsh's defense attorneys, declined to comment on the case.

He was indicted on firstdegree felony charges of theft, money laundering and securing execution of a document by deception. Authorities said he stole nearly $500,000 from 12 investors.

The investors, which included a retired real estate broker in Houston, believed that the money would be used to drill oil wells in the High Island section of eastern Galveston County, authorities said. Walsh used investors' money to pay his personal expenses, including a $6,000 per month mortgage, and other costs unrelated to the wells, according to the Texas State Securities Board.

It's not the first time Walsh has been accused of fraudulent business practices: In 2005, the Pennsylvania Securities Commission issued a cease and desist action against his company for selling unregistered investments in two oil wells in DeWitt County in Texas, authorities said.