A Texas attorney was arrested and charged with operating a Ponzi scheme that allegedly duped investors out of nearly $3 million. Kelly G. Rogers, of Frisco, Texas, was indicted on five charges, including two counts of money laundering, two counts of theft of stolen property, and one count of securities fraud. The charges stem from Roger's apparent solicitation of investors for an oil and gas venture that promised investors lavish returns. Rogers, an attorney, is also accused of failing to disclose to investors that he was currently facing lawsuits alleging continuing violations of state and federal securities laws, and had previously been involved in a lawsuit brought by the Securities and Exchange Commission ("SEC") in connection with another Ponzi scheme.
From August 2007 to February 2009, Rogers represented to investors that they could purchase shares in Falcon Energy LLC that promised lucrative returns. In total, more than twenty investors purchased nearly $3 million in shares, including the purchase of nearly $1 million in shares by a single investor. Instead, as alleged by Texas authorities, Rogers misappropriated the funds "in a manner that made recovery of said property by said owners unlikely."
Investors in Rogers' scheme were not told that, in July 2007, he was sued by the SEC for essentially operating as a 'feeder fund' to a Ponzi scheme that raised nearly $10 million from investors. Rogers, through Level Par Investments, LLC, directed investor funds to Global Finance & Investments, Inc., which promised returns of 25 percent per month to 90 percent per week. Investors were assured that their funds were secure due to the fact that the funds would be held in an escrow account maintained an attorney. Kelly ended up settling with the SEC and agreeing to disgorge $100,000 of his ill-gotten gains, along with a civil monetary penalty of $50,000 and an injunction barring future violations of securities laws. Rogers was also sued in February 2007 for alleged violations of state and federal securities laws in connection with the sale of investments in a Louisiana oil and gas venture. Rogers also failed to disclose that he had filed personal bankruptcy in 2009.
According to the Texas State Securities Board, Rogers is currently scheduled to stand trial in a Collin County state district court in June 2012 on an earlier indictment relating to the misappropriation of property in an energy venture.
A copy of the 2007 SEC indictment is here.
The indictment is here.