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Justice News

Department of Justice
U.S. Attorney’s Office
District of Montana

Thursday, March 29, 2018

Federal Jury Convicts Former Montana Resident of Wire Fraud and Money Laundering

BUTTE –  Following an eight-day trial with testimony from thirty-two government witnesses, Joseph Brent Loftis, 63, of Corona Del Mar, California, was convicted by a Montana jury of five counts of wire fraud and two counts of money laundering.  Loftis faces a maximum of 20 years imprisonment for each count of wire fraud and ten years of imprisonment for each count of money laundering.   He further faces a maximum $250,000 fine and up to three years of supervised release on each count.  After trial, Loftis stipulated to a forfeiture order of $1,662,749.10.  Chief U.S. District Judge Dana L. Christensen presided over the case.

Evidence presented at trial by Assistant United States Attorneys Chad Spraker and Adam Duerk showed that from 2009 through 2013 Loftis solicited approximately $3 million from investors based upon false representations that he owned leases on the Blackfeet Indian Reservation.  Loftis also made misrepresentations regarding whether he had received a degree from the University of Oklahoma, amounts of oil being produced from wells, and whether he was using an independent accounting firm.  

After receiving investor funds, Loftis typically provided investors with a few checks totaling about $1000 and then stopped payments altogether.  Once investors complained, Loftis provided excuses regarding disputes about ownership or issues with drilling.  In some instances, Loftis offered to return the investors’ money and entered a rescission agreement for the investment.  Loftis, however, failed to return the investors’ money or issued a check cancelled through a stop payment.  Loftis also falsely represented to investors that he owned oil and gas leases in Oklahoma and Texas though Loftis had defaulted on purchase agreements for the leases.           

In 2011, Loftis took steps to complete a transaction known as reverse merger in which Prism would become a subsidiary of a publically traded company.  Based upon Loftis’s representations that he needed capital to continue Prism’s operations until his company could receive equity in the public markets, Loftis obtained a $1.9 million bridge loan from investor funds.   After Loftis received the loan proceeds, he failed to carry out the steps needed to complete the merger and kept the bridge loan proceeds while spending $190,000 of the funds on a luxury RV.

Also in 2011, Loftis relocated to Texas and began soliciting funds from investors in a newly formed company Great Northern Energy.  Loftis continued to misrepresent his education and denied having a criminal record despite a 1995 felony conviction for bank fraud and false statements to a financial institution.

Sentencing is scheduled for July 20, 2018, at 9:00 a.m., in the Russell Smith Courthouse in Missoula, Montana. The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.

KERI LEGGETT Acting Public Information Officer (406) 761-7715
Updated March 29, 2018