United States Attorney Rebecca A. Gregory
Eastern District of Texas
FOR IMMEDIATE RELEASE CONTACT: Donna Krise
TUESDAY, JULY 1, 2008 ACTING PUBLIC INFORMATION OFFICER
www.usdoj.gov/usao/txe PHONE: (936) 639-4003
TWO MEN SENTENCED FOR RAISING OVER
$65 MILLION IN FRAUDULENT OIL AND GAS PROGRAM
SHERMAN, TX – The United States Attorney's Office announced today that a 57-year-old Richardson man, ULRIC JACK SWEESY a/k/a JACK TAYLOR, and a 36-year-old Allen man, BLAKE LANG CUMMINGS were sentenced for raising over $65 million in a fraudulent oil and gas scheme in the Eastern District of Texas.
ULRIC JACK SWEESY a/k/a JACK TAYLOR of Richardson was sentenced to 20 years in prison and ordered to pay $63,095,560.32 in restitution. On October 24, 2007, Sweesy admitted to obtaining over $65 million from investors in a fraudulent oil and gas well scheme. BLAKE LANG CUMMINGS of Allen was sentenced to 5 years in prison and ordered to pay $50,219,049.00 in restitution. Cummings pleaded guilty to conspiring to commit securities fraud on July 31, 2007. Both men were sentenced today during an appearance before United States District Judge Marcia Crone.
According to information presented in court, beginning in or about 1997 continuing through July 2005, the men devised and executed a scheme and artifice to defraud investors. Sweesy owned and operated or controlled Quality Petroleum, Inc., Americana Oil & Gas Corp., Ameri-Q Energy, Inc., and Prairie Resources, Inc. ("the companies"). Sweesy directed the activities of salespersons offering and selling fractional interests in oil and gas well programs throughout the United States. Cummings was employed by Americana, America-Q, and Prairie as a salesperson responsible for offering and selling fractional undivided working interests in various oil and gas well programs to Investors and managed other salespersons' activities at those companies. As part of the scheme, a virtual office facility operating out of La Jolla, California was established to make it appear to investors that two of the companies were formed and operating in California. Investors were also falsely told that their funds would be used to drill, test, complete, equip, and operate oil and gas well programs.
Sweesy and Cummings admitted that they misrepresented that program wells had been drilled and were producing oil and gas when they were not. The men also admitted that investors were sent checks which were represented to be revenue from the wells, when they were not. Investors were also falsely told that the company offering the project retained a 25% interest in well programs when it did not.
As part of the scheme, the men failed to disclose relevant facts to investors including that the Texas State Securities Board had ordered Sweesy to not offer securities in Texas; that Sweesy had previously been convicted for mail fraud in connection with selling vacation packages; and that a Permanent Injunction enjoining them from selling oil and gas interests had been entered by the Securities and Exchange Commission. Sweesy and Cummings also failed to inform investors that the companies offering the interests in oil and gas well programs were not registered as required by law and were not making required filings with the Texas Railroad Commission.
Assistant United States Attorney Terri L. Hagan commented that “the victims who invested in the fraudulent oil and gas program, some of whom were terminally ill or disabled, sustained not only financial harm but emotional and physical harm as well. Some victims lost their retirement savings in the scheme while others lost their children’s education funds. The repercussions from Mr. Sweesy’s and Mr. Cumming’s actions are vast and far reaching. A sentence of the statutory maximum is appropriate for each.”
This case is being investigated by the Federal Bureau of Investigation, the United States Postal Inspection Service, and the State Securities Board of Texas. This case is being prosecuted by Assistant U.S. Attorney Terri L. Hagan.
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