Former Chairman and Managing Partner Charged for Role In $15 Million Ponzi Scheme
A California man who was the chairman and managing partner of an energy company was charged in an indictment unsealed today for his alleged operation of a Ponzi scheme involving approximately 50 victims and more than $15 million.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney David L. Anderson of the Northern District of California and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.
Joey Stanton Dodson, 55, of Indio, California, was charged in an indictment filed in the Northern District of California with four counts of wire fraud, three counts of mail fraud and three counts of money laundering. Dodson was arrested this morning and made an initial appearance before U.S. Magistrate Judge Shashi H. Kewalramani of the Central District of California.
The indictment alleges that between November 2012 and May 2015, Dodson used several related companies and partnerships, collectively known as Citadel Energy, to fraudulently raise $15 million by soliciting investments in three limited partnerships that would purportedly provide water-related services to oil and gas companies in North Dakota. The indictment further alleges that Dodson induced investors by making numerous materially false misrepresentations about these partnerships, including regarding how the investor funds would be used, the amount of his compensation and the status of a potential acquisition of the partnerships by a private equity firm.
According to the allegations in the indictment, Dodson routinely commingled the monies between the three partnerships, which resulted in investor funds being used to pay the expenses of unrelated projects. Furthermore, the indictment alleges that Dodson misappropriated and diverted more than $1.3 million of investor funds for his own personal benefit, which included repaying former investors in unrelated Dodson-led investments, gambling activity, his wife’s BMW and other expenses.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s San Francisco Field Office investigated this case. Trial Attorney Jason M. Covert of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Griswold of the Northern District of California are prosecuting the case.
The Enforcement Division of the U.S. Securities and Exchange Commission provided valuable assistance.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.