Hughes Energy Inc pleads guilty to charges of running a Ponzi scam
Photo by: Darren Hester
Carl E. Royse and his daughter, Jeanette Riley of Illinois pleaded guilty to charges, made by federal prosecutors, of running a Ponzi Scam on investors who bought into their investment company Hughes Energy Inc. in the hope of striking it rich.
They attracted investors by claiming to have discovered new methods of extracting oil and gas resources. From July 2003 to June 2007, the company sold off investments in the company to people all over the country.
Prosecutors charge, the duo were really running a Ponzi scam by paying off as returns, to old investors, the capital collected from newer ones. Prosecutors also charged that the duo had hid their black past from investors. They had been, in the past, upbraided by the Securities Exchange Commission and a Federal Court had specifically forbade them from entering into such enterprises.
This information could have sounded off potential investors and could have dented the success enjoyed by their scheme. Consequently, they were able to attract approximately $4 Million worth of investments from unsuspecting investors.
They now face sentences of up to five years in prison and fines amounting to $8 Million apart from other sentences. The actual sentences are scheduled to be pronounced on 20 Oct.
Source: TheSouthern.com
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October 13th, 2008 at 4:01 am
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