According to the US Attorney for the Western District of Missouri Beth Phillips,two ministers, a Waco, Texas minister and the other from Kansas City, Kansas, have pleaded guilty to participating in a $7.2M security fraud scheme that caused thousands of investors in Canada and the US to sustain losses. The investors had purchased shares in Petro America Corporation, which was reputed to have $284 billion in assets, including gold mines.
The two men are Texas minister Joseph Harrell and Kansas Minister Edward D. Halliburton. They pleaded guilty to conspiracy to commit securities fraud and wire fraud. They also admitted that they and others conspired together to obtain money through the bogus sale of the stock and the issuing of misrepresentations and omissions. Both men made almost $400,000 from the stock sales, selling millions of shares despite knowing that both Kansas and Missouri had put out cease and desist orders forbidding the sale of unregistered Petro stock.
Harrell, who acted as Petro America’s CFO, was affiliated with Ministers Alliance, of which Halliburton was President. The alliance was comprised of about 15 ministers who promoted and supported Petro American, sold shares to congregants, and called themselves the “White Hat Guys.” They even conducted weekly in-person meetings at a Denny’s and took part in regular calls with hundreds of investors in many US states.
Harrell, who sold stock to at least 90 investors reportedly laced many of his sales pitches with religious wording and claimed that Petro was a blessing from God. He has admitted to knowing that the company was fraudulent. He acknowledges giving investors information that was not complete and also misleading. Harrell said he agreed to sell the stock because he wanted to make a profit. According to the Justice Department, even as he was bilking investors and renting cars at $423/week, he was availing of food stamp benefits and Social Security disability.
Related Web Resources:
Texas minister’s scam had him living the high life — while collecting food stamps, June 17, 2011
Kansas City, Kansas and Texas Ministers Plead Guilty to Securities Fraud Conspiracy, Infozine, June 15, 2011
Related Web Resources:
Texas Foreign Currency Trader and Developer of “Alpha One” Convicted of Securities Fraud, Stockbroker Fraud Blog, June 15, 2011
District Court in Texas Decides that Credit Suisse Securities Doesn’t Have to pay Additional $186,000 Arbitration Award to Luby’s Restaurant Over ARS, Stockbroker Fraud Blog, June 2, 2011
Texas Securities Commissioner’s Emergency Cease and Decease Order Accuses Insignia Energy Group Inc. of Misleading Teachers, Stockbroker Fraud Blog, May 23, 2011
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