SEC Charges Texas Companies and Individuals in Oil-and-Gas Offering Fraud
Litigation Release No. 24057 / February 28, 2018
Securities and Exchange Commission v. AmeraTex Energy, Inc., et al, No. 4:18-cv-00129 (E.D. Tex., filed February 27, 2018)
The Securities and Exchange Commission today charged three Plano, Texas-based oil and gas companies and their principals, together with an accountant and compliance coordinator, for their roles in operating an $11.7 million offering fraud for oil drilling and operations projects allegedly located in Kentucky.
The SEC alleges that AmeraTex Energy, Inc., Lewis Oil Corp., Lewis Oil Company, Thomas Lewis (the CEO of all three entities), and former AmeraTex President, William Fort, sold unregistered securities and made numerous misleading statements to over 150 investors concerning the use of investor proceeds, including false information about prospect wells; false statements about sales commissions; and false guarantees regarding the comingling and loaning of funds. To conceal the growing number of investor and employee complaints that appeared online, the SEC further alleges that Lewis and Fort used services to suppress Internet search results that would otherwise have cautioned potential investors about the nature of the fraudulent offering. This scheme enabled Lewis to misappropriate more than $1 million.
The SEC also alleges that accountant Damon Fox and compliance coordinator Brian Bull played key roles in the scheme by adding legitimacy and credibility to the operations and taking significant actions of their own. Fox misleadingly categorized entries in the companies' books and records and sent investors false K-1 statements. Bull reviewed many of the misrepresentations to investors, enabled the solicitation and acceptance of non-accredited investors, and filed false Forms D with the Commission.
The SEC's complaint charges AmeraTex, Lewis Oil Corp., Lewis Oil Company, Lewis, Fort, and Fox with violations of Section 17(a) of the Securities Act of 1933 (the "Securities Act"), Section 10(b) of the Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder; and alternatively charges Fox with aiding and abetting AmeraTex's, Lewis Oil Corp.'s, Lewis's, and Fort's violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. It further charges Lewis and Fort with violations of Section 15(a) of the Exchange Act and AmeraTex, Lewis, and Fort with violations Sections 5(a) and 5(c) of the Securities Act. Finally, the SEC charges Bull with violations Section 17(a)(2) of the Securities Act and aiding and abetting AmeraTex's, Lewis's, and Fort's violations of Sections 5(a) and 5(c) of the Securities Act. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil monetary penalties against all defendants.
The SEC's investigation was conducted by Sarah S. Mallett and supervised by Assistant Director James E. Etri in the Fort Worth Regional Office. The SEC's litigation will be led by Matthew J. Gulde.