News and Press Releases

petro america

alabama man pleads guilty to $7.2 million
securities fraud conspiracy

scheme targeted thousand of investors nationwide

July 13, 2011

KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Tuscaloosa, Ala., man pleaded guilty in federal court today to his role in a $7.2 million securities fraud conspiracy that victimized thousands of investors across the United States and Canada who bought shares in Petro America Corporation.

Russell Hopkins, 47, of Tuscaloosa, Ala., pleaded guilty before U.S. Magistrate Judge Sarah W. Hays to the charge contained in a June 15, 2011, federal indictment.

By pleading guilty today, Hopkins admitted that he participated in a conspiracy to commit securities fraud and wire fraud that began Sept. 1, 2008. Hopkins promoted Petro America and sold shares to investors, despite cease and desist orders from both Missouri and Kansas, although he was never licensed to sell securities. From June 2009 through February 2011, Hopkins made at least $673,465 from the sale of Petro stock to at least 61 investors throughout the United States.

The federal indictment alleges that the sale of Petro America stock was accomplished by making innumerable false misrepresentations and omissions to investors. For example, the indictment says, conspirators falsely claimed that Petro America was worth $284 billion and Petro America stock was worth $24 per share in order to induce people to invest. There was no basis for those numbers, the indictment says.

While much of the time Hopkins simply repeated information to investors that he had heard from others, he knew that it was incomplete and potentially misleading. In his dealings with investors, Hopkins intentionally and willfully did not provide certain material information to investors, including: 1) the existence of cease and desist orders in Missouri and Kansas; 2) specific negative information contained in the cease and desist orders; 3) the fact that the stock was unregistered; 4) the fact that the stock was either gifted to him, or sold to him at a price grossly discounted from the offer price; and 5) the fact that he was selling the investors his personal shares. When he sold the stock, Hopkins adopted numerous positive claims concerning Petro’s future potential to become a publicly-traded company, and of its claimed assets, which he knew were overly optimistic and misleading.

Starting around July 2010, Hopkins agreed to pay for some of Petro’s “expenses.” In sum, Hopkins paid $32,000 out of his proceeds from the sale of his shares for expenses including Petro’s Pink Sheets registration, payments for accounting and IT work, and $500 weekly payments for Petro conference calls. Hopkins was told that Alvin Sykes was a consultant for Petro who needed to go to Washington D.C., so Hopkins paid for Sykes’ airfare and hotel.

According to court filings, more than 12,000 victims have invested in excess of $7.2 million in Petro America.

Under federal statutes, Hopkins is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Web Site Support For Fraud Victims

Two Web sites have been established to collect information from the victims of the alleged securities fraud scheme and to provide updated information about the status of the case. Investors of Petro America are encouraged to provide information via an online form at Due to the volume of expected responses, this process has been automated and placed online; all communication from potential victims regarding the case should be made via this Web site. Updates about the status of the case will be posted at

Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation, the U.S. Postal Inspection Service and the Office of the Missouri Securities Commissioner.

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