Is everything bigger in Texas?
The latest oil and gas investment scam to catch the SEC’s attention involves AmeraTex, Lewis Oil Corp. and Lewis Oil Co., along with Thomas Lewis (Kentucky), Damon Fox (Rowlett), and Brian Bull (Dallas). The case is reminiscent of an episode of the television night drama, “Dallas.” While fraud may not be bigger in Texas, it does include expenditures for adult entertainment and lavish lifestyles.
Living Large on Other People’s Money.
If 166 investors in 36 states hadn’t ponied up $11.7 million, the outrageous expenditures might seem entertaining. The complaint alleges that Thomas Lewis, the person at the top of the oil and gas investment scam, “…received an annual salary of $130,000, plus spent $1.3 million of investors’ money on …jewelry, retail spending, dining and entertainment, and strip club visits.”
Stealing Cash and Commingling Funds.
Lewis involved employees in lining his pockets with cash, the details of which are outlined in the complaint. “Lewis also withdrew large amounts of cash from investor funds, wrote alimony checks to his ex-wife, and paid his personal credit cards and other personal bills. Lewis also engaged in a ‘check-cashing practice’ where he sporadically wrote checks to at least three employees in amounts up to $3,500, but required the employees to cash them and bring him back the cash, which he pocketed for personal use. Lewis also wrote large checks to Fox’s entity, DNDS, and then directed Fox to re-route the funds to Lewis for his personal use or to be commingled with various unrelated partnerships.”
Hiring Family to Steal More.
Lewis replaced the typical brother-in-law deal by hiring his convicted felon brother to steal additional investor money. The SEC alleges, “In 2013, Lewis [terminated] the previous operation of all AmeraTex oil and gas projects and hired SWO & ISM—a company co-owned, controlled and operated by convicted-felon brother David Lewis—to drill and operate all current and future AmeraTex and Lewis Oil Corp. projects. SWO & ISM overcharged the partnerships for operating expenses, often failed to perform contracted work, and purportedly embezzled more than $1 million from a transportation company venture with Lewis Oil Corp. investors.” Maybe Thomas Lewis could have used his own oil and gas fraud lawyer.
Hiding the Truth on the Internet.
Despite investors complaints that their oil and gas investments were not paying off, AmeraTex continued the scam operation. However, in order to hide the truth, Lewis decided a little “reverse PR” was in order. He discovered ways to keep bad publicity from bubbling to the top of internet searches, and “paid $2,500/month for 22 months for internet search suppression services.”
Oil and gas ventures have added to the wealth of thousands of American families. However, along the way, many a smart investor has become victim to companies like AmeraTex. As you consider oil and gas investments, verify brokerage companies’ and individual’s SEC registration through SEC’s Broker Check program. And if you find yourself searching for an experienced oil and gas litigation lawyer, we are here to help.
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