Texas, with its multi-million dollar oil and gas industry, sees a number of high profile white collar crime investigations every year.
According to the U.S Department of Justice, four executives from Provident Royalties, Inc. have been sentenced in connection with a massive oil and gas investment fraud scheme in the Eastern District of Texas. The Dallas Morning News described the operation as a Ponzi scheme.
The press release stated Brendan W. Coughlin, 46, of Dallas, pleaded guilty on Feb. 2, 2013 to conspiracy to commit mail fraud and was sentenced to 21 months in federal prison on July 3, 2013 by U.S. District Judge Marcia A. Crone.
Two other executives from Dallas were sentenced. Henry D. Harrison, 47, had pleaded guilty to conspiracy to commit mail fraud and was also sentenced to 21 months in federal prison by Judge Crone.
Paul R. Melbye, 47, of Dallas, pleaded guilty on Nov. 11, 2012, to conspiracy to commit mail fraud and was sentenced to 18 months in federal prison today by the judge.
W. Mark Miller, 59, of Plano, Texas, pleaded guilty on Feb. 12, 2013, to conspiracy to commit mail fraud and was sentenced to six months in federal prison on July 3, to be followed by six months home confinement by Judge Crone.
The four men were also ordered to pay restitution in the amount of $2.3 million.
Court documents stated Coughlin, Harrison, Melbye, and Joseph Blimline, 35, of Dallas, founded and controlled Provident, while Miller was its Chief Financial Officer and was later appointed President.
The company raised almost half a billion dollars from investors across America “much of which was lost to Blimline’s manipulation of investor capital prior to his departure from Provident in late 2008,” stated the press release.
Court documents said Coughlin, Harrison, and Melbye failed to disclose the dire state of the company to investors after they discovered the extent of Blimline’s activities, so as they could take in an additional $2.3 million, while Miller, “authorized lulling payments to investors to conceal the crime from discovery.”
Blimline had previously pleaded guilty to his role in the Provident scheme as well as an earlier, similar scheme in Michigan, and is currently serving a 12 year prison sentence.
U.S. Attorney Bales said in a statement: “Investment fraud is often accomplished through a glittering presentation that promises fast, extraordinarily high returns. Remember that if it looks too good to be true, it often is. While we will always hold responsible those that commit fraud, there is no substitute for a healthy dose of skepticism.”
The fraud was investigated as part of President Barack Obama’s Financial Fraud Enforcement Task Force.
There have been a number of high profile white collar crimes in Texas in recent years. In 2012 Texas banker R. Allen Stanford, was sentenced to 110 years in jail.
The Houston financier was convicted of defrauding billions of dollars from investors in one of the largest Ponzi schemes in U.S. history.
Houston was also at the center of the Enron scandal. The huge energy company with headquarters in the Texas city, went bankrupt on December 2, 2001. Its apparently healthy financial state turned out to be a result of a systematic accounting fraud and it hid billions of dollars in debt from failed deals and projects.
White collar cases tend to be highly complex and require skilled attorneys who regularly defend such cases. Both Clint Broden and Mick Mickelsen are Board Certified in Criminal Law and have an active practice representing those charged with whit collar offenses in both state and federal courts.
