Monday, June 18, 2012

Charles Hooker pleads guilty to securities fraud conspiracy in the Petro America case

Posted By on Mon, Jun 18, 2012 at 12:40 PM

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Charles Hooker pleaded guilty in federal court to his role in the alleged Petro America $7.2 million securities fraud conspiracy, which swindled thousands of investors in the United States and Canada.

Hooker, 50, admitted to taking part in a conspiracy to commit securities fraud and wire fraud. The feds say, "Hooker was a team leader who recruited investors and sold shares of stock for Petro America."

Hooker and others sold the shares, claiming that Petro America was a profitable company with $284 billion in assets. However, the feds say Petro "had no oil, no realistic prospects for obtaining, transporting or storing large amounts of oil, no significant assets, no revenue and no employees other than the CEO." (Read this October 2010 Pitch feature for more background on Petro.)

Hooker admitted that he knowingly sold unregistered shares of Petro stock.

He was not licensed to sell securities. He also failed to check with the state of Missouri or the Securities and Exchange Commission to see if Petro was a registered corporation and if it was legal to sell the stock. After receiving a cease and desist order from the state, Hooker never contacted state regulators or an attorney to see if selling shares of Petro stock was legal. Hooker persuaded a Beverly Hills, California-based investor to invest $150,000 in Petro.

Hooker, a minister, even convinced his friends, family and parishioners to invest in Petro. Hooker was a part of Petro's Minister's Alliance. "They wore white fedora hats and made choreographed entrances into places," the feds said in a release today. "Some members of the Minister's Alliance were gifted shares of Petro stock for them to sell."

For bringing in investors, Hooker was given between 80 and 90 million shares of Petro stock. Hooker had sold all of his shares by April 2010. He then began selling shares for another team leader, Teresa Hill. Hooker kept the money at a house, not in a bank. He did most of his dealings in cash.

Hooker is the sixth Petro defendant to plead guilty. Previously, Teresa Hill, Minister's Alliance president Edward Halliburton, Allen Collins, Petro CFO Joseph Harrell, and Russell Hopkins pleaded guilty to their roles in the conspiracy.

Hooker is looking at up to five years in federal prison without parole and a fine of up to $250,000 along with an order of restitution. He'll find out his fate at a November 13 sentencing hearing.
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