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All of which explains why regulators, in 2008, started to raise questions about the companys claims of future riches for investors. But by then, hundreds of people had dumped money into the Petro pipe dream. And even after the government stepped in, more and more people wanted a share of Hawkins' million-dollar promise.
Though its high noon outside, sunshine doesnt penetrate the dark back room of Gates Bar-B-Q at 12th Street and Brooklyn. Wiley Scruggs and Jeff Atkins have chosen this table in the restaurants recesses for its isolation from the lunch rush.
"Owen came to my shop in 2007 one day, Scruggs, the mechanic, recalls. He briefly mentioned this, but I didnt bite that day.
But a year later, in September 2008, the pastor at Scruggs' East Side church offered to sell him shares of the company secondhand. Scruggs threw in $100 for 100,000 shares, then waited to get rich.
He soon received what he thought was a stock certificate. He tried to submit it to his E-Trade account, but E-Trade rejected it because of risk management issues. Thats when I got upset, Scruggs says. I knew I was being had. Around the same time, Atkins paid the company $300 for 300,000 shares. He started going to shareholder meetings, soaking up promises about the company going public. As time went by, the information we were getting from the company became repetitive, Atkins says. Its gonna happen in a month. Its gonna happen at Christmas. Its gonna be a good Thanksgiving. We began to question what we got ourselves into.
Atkins and Scruggs eventually teamed up. Scruggs e-mailed a list of 40 questions to Petro; someone from the company responded but said the questions had already been answered at shareholder meetings. Atkins tried calling the office. Its more than impossible to get in touch with anyone down there, he says. No one will answer.
Atkins and Scruggs might be Petro's most vocal disgruntled shareholders, but theyre not alone. In 2008, the securities division of Missouris Secretary of State's office launched an investigation into Petro after hearing from more than 30 investors, spokeswoman Laura Egerdal says.
According to a cease-and-desist order sent to Petro, the office's investigators learned that a man named Martin Roper was sending e-mails to potential investors. Roper is known to Petro shareholders as a minister in his brother's church, Bales Temple Church of God in Christ, near 23rd Street and Interstate 70. But in the e-mails, he appeared to be working for the company.
He explained that Petro was an oil company that would be publicly traded within six months. The shares were worth $2 each, he said, but there was a special deal ending soon! offering new investors 100,000 shares for $100. For a company with $68 million on the books, as Roper claimed, it sounded like a steal. All an investor had to do was send a check to Ropers house. He would get the money to Petro.
An investigator also listened in on one of Petro's weekly prerecorded conference calls, according to the cease-and-desist letter. The call was aimed at religious people, invoking God and inviting listeners to share the blessing of Petro. My personal goal is I would like to create as many billionaires in this as I possibly can, Hawkins said.