A Texas man is facing criminal charges on allegations that he ran a $4.5 million Ponzi scheme through the sale of purported interests in oil and gas wells. William Allen Risinger was charged with three counts of wire fraud and one count of money laundering in an indictment that was filed in May 2015 but only recently unsealed following Risinger's arrest. The wire fraud charges carry a maximum 20-year term per count while the money laundering charge carries a maximum 10-year prison term. Risinger is currently free on a $50,000 bond.
According to the indictment, Risinger formed RHM Exploration in November 2010. Risinger solicited potential investors through the sale of interests in various oil and/or gas wells. For example, investors were given the opportunity to purchase units in the RHM-Sinton Joint Venture (the "SJ Venture") from December 2010 to August 2012. Investors were told that the SJ Venture would sell ten units for $60,000 each, with RHM purchasing one unit and the remaining nine units available for purchase by investors. Investors were further promised that funds would be kept in an account at JP Morgan, that they would be used as described in offering documents, and that none of the funds would be used to pay sales commissions.
However, RHM never purchased an investment unit in the SJ Venture. Instead, RHM sold over 20 investment units to investors, resulting in the receipt of over $1.2 million and thus diluting the membership interest promised to potential investors. RHM also allegedly used funds for unauthorized purposes, including making Ponzi-style payments to existing investors and the payment of sales commissions. As the funds were not used as promised, a lien was ultimately filed - but not disclosed to RHM investors - against the mineral lease purportedly at the center of the investment. The Indictment alleged that similar misrepresentations and omissions were made in connection with several other mineral lease offerings. Risinger ultimately raised over $4 million from several dozen investors.
The government indicated in the indictment that it is seeking the forfeiture of a residence in Round Rock, Texas, multiple bank and brokerage accounts, and even a 4-seat Cessna airplane. A copy of the indictment is below: