Friday, October 22, 2010

Feds: Petro America, a KC-based oil scam, bilked millions from investors

Posted by on Fri, Oct 22, 2010 at 10:26 PM

Like other investors, Wiley Scruggs bought his shares from a local pastor.
  • Like other investors, Wiley Scruggs bought his shares from a local pastor.
Nicole Reinertson
Like other investors, Wiley Scruggs bought his shares from a local pastor.
A few hours ago, federal prosecutors filed an affidavit that details an incredible stock scam pulled off by a Kansas City-based businessman, who investigators say raised millions of dollars from investors -- many of them local -- and spent the money on cars, a house, and other luxuries.

The affidavit -- written by a Treasury Department investigator and part of an ongoing federal investigation -- corroborates and expounds on reporting done by The Pitch's Mandy Oaklander. Her story, which is online now, details the rise of the company, Petro America, and its founder, Owen Hawkins. It also shows how Hawkins enlisted local ministers to promote the company, which claimed to be worth almost $300 billion but is actually worth considerably less. Like, nothing.


Hawkins is the star of the story, which lays out how the 55-year-old KCK resident tricked investors into thinking his company had value, and how he stole so much investors' money that, last Christmas, he started giving it away to strangers at a bank.

But things really got bizzare when Oaklander attended a meeting between shareholders and several local ministers, who arrived at an East Side Denny's to defend the company against shareholders' scrutiny:

Two identical Mercedes-Benzes

pull into the restaurant's lot around the same time. The drivers are

dressed immaculately -- and identically. Each wears a tailored jet-black

suit, a black vest, a tie and a white straw fedora with red feathers

poking from a black hatband. From their gold rings and watches to the

white kerchiefs peeking out of their breast pockets, every sartorial

detail is synchronized.

The men are part of something called the Ministers Alliance, a group

of local clergy known by some Petro investors as "Hawkins' Henchmen."

According to one Kansas City pastor, who used to host meetings for the

Alliance at his East Side church, it "was formed to try to be a support

to our community and to the city."

"But Hawkins wanted the Ministers Alliance to support him," the

pastor says. "He wanted to make him [Petro] look good."

Read the full story at pitch.com.

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