Sitting in prison at 80 years of age, James VanBlaricum spent his life scamming oil and gas investors. In 1975 the SEC sued VanBlaricum and his company, Kimberly Oil and Gas, for fraud. VanBlaricum settled, and was enjoined from the securities business. By 2011, more than 10 years after he formed Signal Oil and Gas, the Illinois Security Department issued a cease and desist order for oil and gas investor fraud.
Third Time is Still Not Charming
VanBlaricum’s fraudulent funds must have needed replenishing, as he organized his third oil and gas investment scam in 2013. By 2016, Vanblaricum and others defrauded hundreds of investors out of $10 million. Next stop prison. In 2017 VanBlaricum was sentenced to the big house for 84 months, and ordered to pay over $32 million in restitution. SEC Order for Administrative Proceedings
The latest oil and gas investment fraud schemes were really nothing new. The company, Texas Energy Mutual, LLC, didn’t list VanBlaricum as a director, but he was pulling the strings. In his “Mineral Interest Lease Program,” VanBlaricum and his Texas Gang guaranteed a 10 percent annual return with full repayment of notes within three years. Not so surprisingly, the statements were not even close to the truth. Thunderhead, the name given to multi-oil and gas well drilling programs, consisted of wells never drilled, dry holes and a handful of wells that never barely produced enough crude to fill an oil tanker. SEC Complaint
Not only did VanBlaricum not register the security offerings, but he also used investors’ money on things like an online dating website for Russian brides, international vacations, cars and funding his son’s unrelated business. Ponzi scheme payments were made to disgruntled investors. VanBlaricum’s Texas Gang referred to investor payments as “lulling payments.” Perhaps that sounds better than hush money. SEC Complaint
Current Status of VanBlaricum
VanBlaricum has been sued by individuals, some successfully. Dallas attorney, Mark Alexander successfully represented 124 plaintiffs in a massive, nation-wide oil and gas fraud case against VanBlaricum and obtained a $12,363,278.25 judgment. And, just this year, a public administrative proceeding was opened against VanBlaricum. SEC Order for Administrative Proceedings. Hopefully by the time he gets out of jail, he’ll have retired from the oil and gas Ponzi scheme business
How Could Investor Spot the Scam before Investing?
VanBlaricum’s name was not involved in his third scam, but some named LLC directors and business associates had SEC licenses terminated prior to their involvement in this business. A couple of them had criminal backgrounds. And, the securities were not registered. Most of the oil and gas investors were found via cold calling. Before investing, always do your research. VanBlaricum’s sales staff was paid 10 to 30% of the investor money they bilked from people.
Leading an active senior lifestyle is not usually synonymous with Ponzi schemes, securities investment fraud and earning the title, Securities Fraud Recidivist. But legends are often larger in Texas. The sordid tale, and all the Texas conspirators are identified in the SEC Complaint.
We hope all your oil and gas investments are profitable. But if you find yourself searching for an experienced oil and gas litigation lawyer, we are here to help.