Texas Ponzi Scams: Oil Co. Owner Is Indicted by a Federal Grand Jury, CEO of Texas First Financial is Charged in Internet-Related Fraud, and Texas REIT United Development Funding Remains in Trouble

Texas First Financial CEO is Arrested For Fraud

Authorities have arrested Bobby Eugene Guess, an ex-Texas-based registered representative and the CEO and founder of Texas First Financial, for financial fraud. Guess promoted himself as a financial expert through financial seminars and radio promotions in the Dallas-Fort Worth area.

He is accused of running a Ponzi scam online involving two companies—StaMedia Inc., which is a Dallas company, and TenList Inc. According to the Texas State Securities Board, Guess was indicted for money laundering, securities fraud, theft, and taking part in organized criminal activity involving the multi-million-dollar sales of investments in an internet ad company.

Prosecutors contend that Guess and others sold $6M in investment contracts, stock certificates, and notes in Stamedia Inc. Also, he allegedly raised millions of dollars from Stamedia investors from ’14 to ’16 but did not disclose that the company’s net income and revenue were negligible. Investor funds were allegedly used to pay earlier investors the returns they were promised.

Texas Oil Company Owner Accused of Mail Fraud
A federal grand jury has indicted James VanBlaricum, who is the Texas-based owner of Signal Oil and Gas Co. They are accusing him of mail fraud and lying about using investor money on mineral leases.

US postal inspectors arrested VanBlaricum last summer over allegations that he got investors involved in a multi-million dollar Ponzi scam. He remains in custody.

He allegedly used his oil and gas exploration company and follow-on entities in his investment scam, purportedly offering to sell land lease investment programs to investors. Rather than issue payouts,  VanBlaricum allegedly used the funds for other purposes.

The federal complaint, which was submitted in August, contends that VanBlaricum promised investors an “assured” return rate of 9-15% on their initial investment, along with a full refund of that investment in three to five years. Although he did invest some of the investor funds on oil projects and leases as promised, a “substantial” chunk of the funds went to paying supposed “investment returns” to investors, sales agent commissions, his own expenses, and the personal expenses of family, business associates, and friends.

VanBlaricum purportedly lied to investors about the purchase of certain assets and represented certain gas and oil well projects as profitable even though they were not. Meantime, some investors were paid “lulling” payments, which were supposedly “returns” on the investments they had made.

A number of consumers have filed complaints with the Texas Securities Board about VanBlaricum’s investment programs. Their complaints alerted federal authorities to the alleged fraud.

Update: Texas REIT United Development Funding Still Not Out of Trouble
It’s been a year since Harvest Exchange took a short position in United Development Funding IV shares and accused the Texas-based real estate investment trust of having operated like a Ponzi scam for years. The hedge fund accused the REIT of using new capital to pay distributions to earlier investors.

At first, the Texas REIT denied the allegations. It filed a complaint with the SEC claiming that it was the one that was the victim of a “short and distort” trading scam meant to illegally manipulate shares. Then, in February, the FBI raided the firm’s offices in Dallas.

NASDAQ has since delisted trading of UDF IV, a mortgage and development REIT. It had halted trading in UDF IV shares in February.

There are four UDF REITs with collective assets of $1.3B. InvestmentNews reports that none of them have put out financial reports since November of last year. Three of the UDF REITs are nontraded REITs.

Last month, UDF IV gave shareholders a cash distribution of 8 cents/share and UDF II wrote to shareholders earlier this month expressing management’s confidence in the fund. In October, the SEC sent UDF IV a Wells notice, which is a sign that the regulator’s staff has come to the preliminary finding that it will likely recommend that an enforcement action be brought against the Texas REIT.

Our Texas securities fraud law firm works with investors throughout the state in trying to recoup their investment losses. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

North Texas Businessman Arrested for Running Oil and Gas Fraud Ponzi Scheme, US Immigration and Customs Enforcement, August 19, 2016

Texas State Securities Board