April 8, 2003

FORMER ORANGE COUNTY MAN SENTENCED TO
30 MONTHS IN PRISON FOR FRAUDULENT
$4 MILLION OIL AND GAS PROMOTION

A former Orange County resident who defrauded investors in a series of oil and gas investments was sentenced today to 30 months in federal prison.

Patrick Wayne Maloy, 44, formerly of Costa Mesa and now a resident of Norman, Oklahoma, was sentenced today after pleading guilty in January to one count of mail fraud and one count of tax evasion. In addition to the 30-month prison term, United States District Judge George King in Los Angeles ordered Maloy to pay restitution in the amount of $3,938,936.63.

Maloy pleaded guilty in January to one count of mail fraud and one count of tax evasion. When he pleaded guilty, Maloy admitted that he solicited victims to invest in companies that were purportedly involved in the exploration, development and production of oil and gas producing properties.

Maloy raised more than $4 million from over 100 investors throughout the United States. He represented to investors that their funds would be used to acquire interests in oil and gas wells, that investors would receive regular interest and dividend payments and high returns in connection with their investments, and that the investments were safe and secured.

In fact, little money was used to acquire interests in oil and gas wells.  Instead, Maloy diverted investor funds for his personal benefit, including paying for personal vacations, beachfront rental properties in Malibu and Newport Beach, and automobile purchases and leases. Investor funds were also misused to operate a Ponzi scheme, paying old investors by using money from new investors. The scheme started in 1993 and eventually ended in 1999.

This case was investigated by the United States Postal Inspection Service and IRS-Criminal Investigation.

 Release No. 03-060

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