A judge has sentenced Joseph Blimline to 20 years in prison over his involvement in two complex, oil and gas Ponzi scams that took place in Texas and Michigan. The Dallas man, who was sentenced to two counts of conspiracy, was actually sentenced to 240 months behind bars for each count, but U.S. District Judge Marcia A. Crone said the sentences could run concurrently. He also has to pay restitution to his Ponzi scheme victims.
Blimline is accused of working with others to run a Michigan Ponzi scam between November 2003 and December 2005. That financial fraud made more than $28 million before it fell part. The government says that fraudsters promised investors inflated return rates. Blimline would then use payments from newer investors to pay previous investors, while also diverting investor payments for his personal gain.
The scammers then moved the Ponzi scheme to Texas in 2006 where they started running Provident Royalties in Dallas. That fraud eventually made more than $400 million from about 7,700 investors. Blimline was accused of also making materially false representations to Texas and failing to disclose material facts to investors to get them to invest in Provident. Once again, investor money was used to pay other investors. Also, Blimline got millions of dollars in unsecured loans from the investors’ money and directed Provident’s purchase of worthless assets belonging to the Michigan venture.
Blimline would go on to plead guilty to the criminal charges. Although he was not initially named in the securities fraud lawsuit filed by the SEC against Provident Royalties in 2009, the Commission eventually added him following claims by the Ponzi scam’s victims that he had played a key role in defrauding them. The government has described him as a company representative or “control person” who played a huge role in the financial scams.
The SEC’s lawsuit charged Provident Royalties and three founders. The Commission accused them of promising at least 7,700 investors more than 18% and misrepresenting the money’s use.
Also named in the SEC’s lawsuit were broker- dealer Provident Asset Management LLC and 21 entities that sold and offered the securities.
After a court placed an emergency freeze on Provident Royalties’ assets, a receiver was appointed.
Please contact our Texas securities fraud lawyers if you believe you were the victim of a Ponzi scam or any other type of financial fraud. Unfortunately, every year, there are investors who suffer losses because of Ponzi schemes that inevitably fail when it becomes too hard to get enough new investors to pay earlier investors or when too many investors attempt to cash out.
Your first case evaluation with one of our Texas Ponzi scam attorneys is free.
Dallas Man Sentenced in Half-Billion-Dollar Ponzi Scheme, FBI, May 4, 2012
Dallas man pleads guilty in Provident Royalties’ oil, gas scam case, Dallas News, August 31, 2010
More Blog Posts:
Provident Royalties Faces $485 Million Texas Securities Fraud, Says SEC, Stockbroker Fraud Blog, July 26, 2009
Sale of Interest in Private Placement Offerings by Medical Capital Holdings, Provident Royalties DBSI Leads to FINRA Order that Investors Get $3.2M in Restitution, Institutional Investor Securities Blog, November 29, 2011
Texas Securities Fraud: SEC Freezes Assets of Fourth Person Involved in Alleged $485 Million Ponzi Scheme, Stockbroker Fraud Blog, December 23, 2009