A wedding on a cruise ship, investments in the jade industry in Guatemala, and a private jet: Those are just some of the things investors who thought they were getting rich in the oil industry paid for instead. Two Securities and Exchange Commission lawsuits filed last month against Ponzi-style scammers selling fraudulent investments in the biggest oilfield in the U.S. show how the American oil and gas boom really is the Wild West.
The first SEC suit, filed in December and made public this week, is an absolute rats’ nest of dozens of different LLCs, debt funds, and other details of drifting run amok in Texas’ Permian Basin. A company called Heartland Group Ventures, which formed in 2018, began raising funds from investors for working interests in two wells in the Permian that the company claimed were producing 200 barrels of oil and gas each day. The company operating the wells, Heartland told investors, was owned by a man named Manjit “Roger” Sahota, who Heartland said had founded his companies in 2003 and had years of experience in the industry.
What’s remarkable about this case is that a lot of this information is pretty easy to fact check. The suit said that Heartland’s owners didn’t bother to look up the supposedly super-productive wells they were selling to investors on the Texas Railroad Commission website, which would have shown them that neither of the wells had been finished or actually produced barrels of…
