Former Chairman And Managing Partner Charged For Role In $15 Million Ponzi Scheme
SAN FRANCISCO – A federal grand jury indicted Joey Stanton Dodson, chairman and managing partner of an energy company, charging him with crimes related to an alleged $15 million Ponzi scheme involving approximately 50 victims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States 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.
According to the indictment, between November 2012 and May 2015, Dodson, 55, of Indio, Calif., 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.
The indictment charges Dodson with four counts of wire fraud, in violation of 18 U.S.C. § 1343, three counts of mail fraud, in violation of 18 U.S.C. § 1341, and three counts of money laundering, in violation of 18 U.S.C. §§ 1957 and 2.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. If convicted of the wire fraud charges, Dodson faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000. If convicted of the mail fraud charges, Dodson faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000. If convicted of the money laundering charges, Dodson faces a maximum statutory sentence of 10 years in prison and a fine in the amount of $250,000. The court also may order a term of supervised release, fines or other assessments, restitution, and forfeiture, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Dodson was arrested this morning and made an initial appearance before the Hon. Shashi H. Kewalramani, U.S. Magistrate Judge for the Central District of California. Dodson’s next appearance is expected before the Hon. Nathanael M. Cousins, U.S. Magistrate Judge for the Northern District of California.
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 prosecution is the result of an investigation by the FBI’s San Francisco Field Office, with the assistance of the Enforcement Division of the U.S. Securities and Exchange Commission.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.