Here’s a gift of caution: Beware of grifters lurking in plain sight
Has someone approached you about investing in an oil well? Beware, because just like in the olden days, fraudsters have stolen millions of dollars from investors desperate for higher returns.
In between the feasts and football, the holiday season provides extra time to sit down with our friends and family. It’s a great chance to talk about money and finances, which should include a conversation about how to identify a con artist.
Grifters are more common than most people think. They attend church services, join service clubs and play golf at the most exclusive courses. They put ads on AM radio. They look and sound authoritative, and they know where people with money gather. They are sharks who infiltrate goldfish bowls.
Con artists tend to target older folks worried about outliving their money, or younger people desperate to escape debt. Since yields on government bonds and savings accounts at historic lows, anyone needing a higher return becomes willing to take higher risks.
One of the riskiest places to invest money is in a small business, and that is especially true of a small oil and gas business. But Michael Patman, director of operations for Woodland Resources, though, made it sound like child’s play.
According to the Woodland website, Patman’s bio is impressive . He has 33 years of experience in oil and gas exploration, including stints as CEO of Patman Drilling and Sundance Resources. He’s run operations in Asia and South America, the web site said.
Woodland has been sending out emails inviting people to invest in Patman’s latest venture drilling new offset wells from the Oddfellow A-1, an established well in Seminole County, Okla. The company claimed the current well is producing 38 to 40 barrels a day, and the new offsets will do just as well, producing an annualized return on investment of more than 50 percent.
The offer lasted right up until the Texas State Securities Board served the Fort Worth company with an emergency cease and desist order.
It turns out, Patman Drilling ended in bankruptcy after a judge found him incompetent and appointed a trustee to liquidate the company. The company owed 50 parties more than $10 million, the board found.
Sundance Resources also ended up insolvent, and the court declared that Patman and another executive were liable for breach of contract, common law fraud, statutory fraud and civil conspiracy. The judge ordered Patman to pay damages of $13 million, the board added.
State Securities Commissioner Travis Iles ordered Woodland Resources to stop soliciting investors and scheduled a formal hearing for next month. Neither Patman nor Woodland responded to an email requesting comment.
Then there is Timeless Protect LLC, an investment firm with offices in Florida and Canada that offers a Cash Back Program that guarantees a “bulletproof ” investment. For an 8 percent fee and a 15-year commitment, Timeless will put investors’ money in an insured trust that invests in dozens of companies in 30 countries, including 13 oil and gas businesses.
After four years, the company promises a 25 percent return on investment. After eight years, they will get a 50 percent return and after 15 years, they receive a 100 percent return. But the fine print allows Timeless to change everything at any time under any circumstance, and there is no real protection for the investors’ capital, investigators from the Securities Board found.
Iles issued an emergency cease and desist order against Timeless Protect last month because they also failed to reveal who is running the company or where the money is actually invested.
Timeless’ tireless promoters, however, provide some clues. Bradley Haycraft, who regularly pitched Timeless on AM radio, has felony convictions for armed robbery and possession of methamphetamine.
Robert Mangiafico Jr. recruited investors through his business, Premier Resources LLC. Securities investigators and Carrolton Police raided his offices Nov. 22 to investigate his claims to ownership of 61 wells that generate a 29 percent annual return on investment.
Mangiafico started Premier Resources while on parole from a 40-year prison sentence for stealing $655,000 from four elderly widows, just the latest of six felony convictions, the board said. His sales agents were cold-calling Texas residents for his Premier Resources and Timeless Protects. The company did not return a call seeking comment.
When I describe these investments, the scam is easy to spot. But these guys are excellent salesmen, and enough people give them money to make it worthwhile. Make sure anyone you love knows to get a second opinion and run a background check or at least a Google search before handing over their savings.
The Texas State Securities Board offers useful resources for investors, always do your due diligence: https://www.ssb.texas. gov/investors.