A Wichita man is among seven Kansans accused of multiple counts of fraud and money laundering for their parts in an four-year scheme that duped millions from investors, U.S. Attorney Barry Grissom announced Wednesday.
In a 67-count indictment, federal prosecutors allege the team created several companies — including rig refurbisher Tri-State Production and its management company Mid Continent Manufacturing — and duped investors out of $132 million from 2004 to 2008, according to a news release from Grissom’s office.
The men allegedly sent investors false and fraudulent agreements, reports, profit and loss statements and other documents by mail, promising returns on investments in companies that leased oil and natural gas drilling rigs and related businesses.
The filing includes 20 counts of mail fraud, 28 counts of wire fraud, seven counts of money laundering and a single count of bank fraud.
Those charged are:
According to Grissom’s office, the men told investors to expect quarterly payments and annual returns ranging from 25 to 40 percent, and that the companies already were earning 15 to 40 percent on returns.
The filing also alleges the men used the investments to pay a $300,000 settlement to the Colorado Securities Commission.
The crimes carry up to a $250,000 fine and the following maximum prison terms for each count: mail and wire fraud, 20 years; money laundering, 10 years; and bank fraud, 30 years.