Dallas Man Guilty in $485 Million Investment Fraud Scheme
|U.S. Attorney’s Office August 31, 2010|
SHERMAN, TX—A 35-year-old Dallas man has pleaded guilty in the Eastern District of Texas for his role in a multi-million-dollar oil and gas scheme, announced U.S. Attorney John M. Bales today.
Joseph Blimline pleaded guilty to an information charging him with conspiring to defraud investors in an oil and gas scheme that involved more than $485 million and 7,700 investors throughout the United States. Blimline also pleaded guilty to defrauding investors in a second oil and gas scheme based in the state of Michigan that involved more than $50 million obtained from investors. He entered his pleas today before U.S. Magistrate Judge Amos Mazzant.
“Victims from across the country relied upon the representations made in the scheme before investing their hard-earned money into what they believed to be a vibrant opportunity,” said U.S. Attorney Bales. “Investment fraud is, at its core, a betrayal of trust by one person to another. We will be relentless in our pursuit of those individuals responsible for abusing the trust of others in order to obtain criminal profits.”
According to information presented in court, beginning in September 2006, Blimline and other individuals, operating as representatives of Provident Royalties, made materially false representations and failed to disclose material facts to their investors in order to induce the investors into providing payments to Provident. Among these false representations were statements that funds invested would be used only for the oil and gas project for which those funds were raised. Among the omissions of material fact were the facts that Blimline was a control person over Provident, Blimline received millions of dollars of unsecured loans, Blimline had been previously charged with securities fraud violations by the state of Michigan and that funds from investors in one oil and gas project were being used to pay individuals who invested in previous oil and projects.
In the second scheme, according to information presented in court, between November 2003 and December 2005, Blimline and other individuals falsely promised inflated rates of return in order to obtain payments from investors, which they then used to make payments to previous investors.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.
President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Blimline faces up to 20 years in federal prison on each of the two conspiracy charges. A sentencing date has not been set.
This case is being investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Shamoil Shipchandler.