The alleged Petro America scam is beginning to unravel in federal court. Earlier this week, two ministers pleaded guilty to their roles in a $7.2 million securities fraud conspiracy that victimized more than 12,000 investors who bought shares in the company. And just last night, eight more people were indicted.
The Rev. Edward Halliburton of KCK and Joseph Harrell of Waco, Texas, admitted that they conspired with others and that each pulled in about $400,000 through the fraudulent sale of Petro America stock by making misrepresentations and omissions to investors.
Halliburton, a pastor for more than 20 years, was the president of the Ministers Alliance (a group of about 15 ministers who mostly live in the KC area). My favorite Houston-based reporter (and ex-Pitch colleague) Mandy
Oaklander attended an October meeting of the Ministers Alliance and broke the story of ministers' ties to Petro
Halliburton and Harrell, who served as Petro America's CFO, ignored cease-and-desist orders in Missouri and
Kansas barring the sale of unregistered Petro stock and sold millions of
shares to investors. The two tried to skirt the cease-and-desist orders,
claiming that they were selling their own shares when most of the shares
were really gifted to them as a way to get around the orders. Neither
Halliburton nor Harrell were licensed to sell stock.
With his share of the money from the sale of Petro stock, Halliburon
bought a 2004 S500 Mercedes for $20,000, paid the mortgage on his home,
and bought rental property. He also bought clothes and a bracelet for
his wife. Spread the wealth! Oh, and he also bought a doctorate degree
from Tabernacle Bible College for $1,794 despite not doing any coursework. Religion!
Meanwhile, Harrell told investors that Petro was "a blessing from God."
That blessing paid for fancy cars and an extravagant lifestyle (World
Series tickets, anyone?). Harrell had been receiving food stamps up
until May 2010.
Fun Fact: Halliburton, Harrell and other ministers in the alliance were
white fedora hats as gifts. They called themselves the "White Hat Guys."
Following their Thursday night conference calls, they'd go to Brio
Tuscan Grille on the Plaza and later the Epicurean Night Club.
Halliburton and Harrell are each facing sentences of up to five years without parole in
federal prison as well as a fine of up to $250,000 and
an order of restitution.
Petro America claimed to be profitable and have $284 billion in assets.
The eight people indicted by a federal grand jury Thursday night:
Martin Roper, 45, of Kansas City, Kansas: A member of the Ministers
Alliance who allegedly bought a Hummer H2 for $20,970 and put on a
vanity license plate
Charles Hooker, 49, of Kansas City, Missouri: A director of Petro
America and member of the Ministers Alliance who
allegedly received at least $25,000 from the sale of stock.
Teresa Hill, 54, of Kansas City, Missouri: She allegedly attended and
helped run the weekly shareholder
meetings and also is accused of discontinuing mortgage payments on her
home, letting it go into foreclosure and then seeing her boyfriend
(Hooker) buy the property (where he also lived) on the courthouse steps
with proceeds from Petro investors.
William Miller, 40, of Independence, Missouri: He's accused of receiving
$104,375 from the illegal sale of Petro stock.
Curtis White, 55, of Grandview, Missouri: A member of the Ministers
Alliance who allegedly bought a 2000 Mercedes S430 with the proceeds of
the sale of Petro stock.
Allen Collins, 54, of Raymore, Missouri: A member of the Ministers
Alliance who allegedly sold at least
$97,225 worth of Petro stock.
Russell Hopkins, 47, of Tuscaloosa, Alabama: A man who allegedly
received at least $673,465 from the sale of Petro stock.
Brian Langenbach, 42, of Globe, Arizona: A man who allegedly received
$691,406 from the sale of Petro stock.
Previously indicted were Petro CEO Owen Hawkins, Teresa Brown, Johnny
Heurung and Petro accountant Clarence Moore. All are accused of
participating in a conspiracy to commit securities fraud and wire fraud.
The feds allege that almost no investor proceeds were being reinvested
by Petro; they were being spent on personal expenditures.
Among the other charges of various Petro members: money laundering,
securities fraud, wire fraud, mail fraud, and structuring financial
transactions in order to evade federal reporting requirements.
The feds want to hear from victims of the alleged scam. Petro
investors can submit their info via an online form by clicking here.