Securities Fraud Case Leads to 15 Convictions
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowMore than a dozen people have been convicted and sentenced to prison in a securities fraud case out of New Albany. The office of Indiana Secretary of State Connie Lawson says the case surrounds Earth Energy Exploration Inc., which bilked investors out of millions of dollars.
Lawson’s office says it began in 2007 when David Rose founded Earth Energy Exploration, which promised victims to invest their money in oil exploration and production companies. Instead, the money was used for personal expenses of the company’s employees and laundered into related businesses.
Our partners at WIBC-FM in Indianapolis report 10 investors were swindled out of a total of $3 million.
"It took my team years to uncover the true nature of the scheme,” said Lawson. "This was homegrown organized crime that spread through 9 states with a base in New Albany, Indiana. The convoluted scheme used Wyoming as a mail drop and Indiana as a base for calls, with investors stretching from Pennsylvania to Texas."
Rose and his partners, Lawson says, would use the money to try and increase their income through several ventures, including the creation of an adult film company. When the ventures failed, they would send employees to Las Vegas to try and recoup some of their losses through gambling, which also failed.
Rose pleaded guilty to securities fraud and was sentenced to 8 years, four of which will be served in prison. The others received prison sentences of one to six years.
"This case should serve as a reminder that all potential investors should call the Secretary of State’s office to verify an investment advisor and the investment are registered and that potential defendants who want to prey on investors should be aware they will be prosecuted and held accountable," said Floyd County Prosecutor Keith Henderson.
The 15 people convicted in the case include:
- Thomas Berry provided assistance to Brian Rose and pled guilty to corrupt business influence. Berry was sentenced to 4 years, 1.5 to be served in prison and 2.5 on probation.
- David Brown was a sales closer and pled guilty to aiding the sale of unregistered securities. Brown was sentenced to 4 years in prison.
- Richard Collins was a sales closer and pled guilty to aiding the sale of unregistered securities. Collins was sentenced to 6 years in prison.
- Bruce Fox was a president of Earth Energy Exploration, Inc. and pled guilty to securities fraud and the sale of an unregistered security. Fox was sentenced to 6 years in prison and returned $5000 to victims.
- Brent Loveall acted as a sales closer and pled guilty to acting as an unregistered broker-dealer. Loveall was sentenced to 6 years in prison.
- Robert McGregor was a sales closer and pled guilty to the sale of unregistered securities. McGregor was sentenced to 4 years with 18 months of probation.
- Keith Mohney was a CPA and the Earth Energy Exploration, Inc. tax preparer. He pled guilty to aiding the sale of unregistered securities. Mohney was sentenced to 4 years with 4 years of probation.
- Colin Purcell pled guilty to aiding securities fraud. Purcell was sentenced to 3 years with 3 years of probation and returned $5000 to victims.
- Brian Rose, an owner of Earth Energy Exploration, Inc, pled guilty to securities fraud and corrupt business influence. Brian Rose was sentenced to 8 years in prison with 2 years’ probation and returned $25,000 to victims.
- David Rose, who was a leader of the scheme, pled guilty to securities fraud and was sentenced to 8 years, 4 of which will be executed in prison.
- Hugh Sackett was a sales consultant and pled guilty to aiding the sale of unregistered securities. Sackett was sentenced to 4 years in prison with 2 years of probation and returned $6000 to victims.
- Jeffery Smith laundered money for Brian Rose and pled guilty to conversion. He was sentenced to 1 year and returned $1000 to victims.
- Jason Towe was a sales closer and a president of Earth Energy Exploration, Inc, he pled guilty to corrupt business influence. Towe was sentenced to 4 years with 4 years of probation and returned $15,000 to victims.
- Mandy Ward-Rose ran a small pornography company and wrote investment paperwork for Earth Energy Exploration, Inc. She pled guilty to theft and was sentenced to 3 years, while returning $22,000 to victims.
- Michael Wood was a president of an Earth Energy Exploration, Inc affiliate company and pled guilty to aiding the sale of unregistered securities. Wood was sentenced to 4 years in prison.