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Petro America Corp. (PTRZ)

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http://www.petroamericacorp.com/


FOR SEC FILINGS:



http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=0001122771&filenum=&State=&SIC=&owner=include&action=getcompany

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001447994&owner=exclude&count=40


________________________________________________________________________________________________________________________________

 

doj.gif

NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


 

BETH PHILLIPS


 

Contact Don Ledford, Public Affairs ? (816) 426-4220 ? 400 East Ninth Street, Room 5510 ? Kansas City, MO 64106

www.justice.gov/usao/mow/index.html


 

OCTOBER 27, 2010

FOR IMMEDIATE RELEASE


 

KCK MAN CHARGED IN $7.2 MILLION FRAUD SCHEME THAT TARGETED THOUSANDS OF INVESTORS NATIONWIDE


 

            KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Kan., man has been charged in federal court for his role in a $7.2 million securities fraud scheme that victimized thousands of investors across the United States.


 

            “A federal criminal complaint alleges that Petro America was an empty facade of a business run by deception and false promises,” Phillips said. “Petro’s founder is charged with defrauding unwary investors by selling them worthless stock in order to support his lavish lifestyle.”


 

            Isreal Owen Hawkins, 55, of Kansas City, Kan., was charged in a two-count criminal complaint filed in the U.S. District Court in Kansas City, Mo. Hawkins is the president and CEO of Petro America Corporation. A related civil forfeiture was filed against Petro America on Friday, Oct. 22, 2010.


 

            The criminal complaint charges Hawkins with securities fraud and with structuring financial transactions in order to evade federal reporting requirements. Hawkins founded Petro America, which bills itself as a holding company for crude oil and gold mines (among other claimed assets) in 2007.


 

Count One: Securities Fraud


 

            According to an affidavit filed in support of the criminal complaint, Hawkins began selling shares of unregistered stock to investors in 2008. At the time, the affidavit says, Petro America had no oil, no realistic prospects for obtaining, transporting or storing large amounts of oil, no significant assets, no revenue and no other employees. The government is aware of no evidence that Petro America has seriously pursued any opportunities to acquire oil fields or conducted oil trading operations. Nevertheless, the affidavit says, Hawkins and others have touted excellent prospects for Petro’s rapid growth in the oil industry.


 

            According to the affidavit, more than 9,000 victims have invested in excess of $7.2 million since August 2008, but instead of using that revenue for legitimate business-related purposes, Hawkins and his co-conspirators allegedly withdrew investors’ funds from Petro America’s bank accounts in cash, which they spent on personal expenditures such as a house by the lake, luxury cars, a $5,700 fur coat, a $37,000 boat, a $5,200 piece of Louis Vuitton luggage purchased in Switzerland, expensive jewelry and travel.


 

            Hawkins, the only full-time employee of Petro America, paid himself an annual salary of $595,000 under a contract that also granted him a $175,000 bonus, 500 million shares that are immediately exercisable, a company car, a company apartment in Missouri, and a dining card. Hawkins drew his salary in cash, in random amounts at inconsistent times, and the company did not withhold taxes.


 

            Conspirators often recruited investors through churches and used religious language in their pitches, the affidavit says, including promoting Petro America as a once-in-a-lifetime opportunity to “share the blessing.” Petro America cultivated a relationship with the African American Ministers Alliance Group, the affidavit says, and according to its records made large payments to multiple Kansas City-area pastors, religious leaders and a local civil rights activist.


 

            Investors lost from $100 to $100,000 each. Initially, many of the investors were drawn into the scheme with the promise that $100 would buy 100,000 shares of Petro America stock, the affidavit says, which Hawkins claimed was “book valued” at $2 per share. As the scheme progressed, conspirators raised the price to invest and claimed an ever-higher “book value” for the shares. The affidavit alleges that this allowed conspirators to unload shares to new investors at an increasing profit. To date, the affidavit says, the stock has never been properly registered or listed on any exchange.


 

            Hawkins allegedly promised “meteoric returns” on investments. At the height of the scheme, the affidavit says, up to $700,000 flooded into the company each month.


 

            Hawkins claimed that Petro America would be “the first African-American holding oil company to go public in the United States,” according to the affidavit. Investors were frequently told that they would be rich when the company “goes public.” Going public, the conspirators allegedly have said for over two years, is just weeks away. In reality, the affidavit says, the company has no significant assets or revenue stream (other than investor proceeds).


 

Alleged False Claims


 

            Today’s affidavit alleges that Hawkins and co-conspirators provided materially false information to investors. For example, Petro America’s Web site includes a prominent photograph of the luxury office building at Two Pershing Square, ostensibly Petro’s “world corporate headquarters.” In reality, the affidavit says, Hawkins contracts with Regus Management Group LLC, a secretarial service that provides such services as telephone answering, fax and mail handling, use of the address and 16 hours of office usage for an initial monthly fee of $225.


 

            According to the affidavit, conspirators have touted Petro America acquisitions in gold and rock mines as valuable holdings worth hundreds of billions of dollars. In reality, the affidavit says, Petro America’s interests in the gold and rock mines are essentially worthless. Petro America allegedly adopts wildly high valuations for the mines, most or all of which are not producing anything. Many or all of the mines are not actually mines at all, but mining claims. A mining claim is merely a plot of government-owned land upon which a person or corporation has filed a claim of rights to a mineral deposit, which may or may not actually exist.


 

            Based on these representations, Hawkins and others claim that Petro’s assets are worth more than $284 billion. According to the affidavit, if this valuation were accurate, Petro America would be the second-largest company in the United States by market capitalization, larger than Wal-Mart, Apple or Microsoft. America’s largest company is Exxon Mobil, which has a market capitalization of $312.28 billion.


 

Count Two: Structuring Financial Transactions


 

            Under federal law, banks are required to file Currency Transaction Reports for financial transactions that exceed $10,000 in one day. It is illegal to conduct multiple cash withdrawals in amounts less than $10,000 for the purpose of evading that federal reporting requirement.


 

            The affidavit alleges that Hawkins and others made large cash withdrawals from Petro America’s bank accounts, which were structured to avoid bank reporting laws. For example, according to the affidavit, Hawkins and an unidentified co-conspirator visited Mazuma Credit Union several times each week. Sometimes they made big deposits of multiple checks into the company’s bank account; on most visits, the affidavit says, they withdrew $7,500 to $9,800, often on consecutive days. In this manner, Hawkins obtained at least $537,515 in cash from Petro’s account at Mazuma. The affidavit also alleges that Hawkins structured currency withdrawals out of Petro America accounts at U.S. Bank and Bank of America.


 

Web Site Support For Fraud Victims


 

            Two Web sites have been established to collect information from the victims of the alleged securities fraud scheme and to provide updated information about the status of the case. Investors of Petro America are encouraged to provide information via an online form at http://www.postalinspectorsurvey.com/PetroAmerica Due to the volume of expected responses, this process has been automated and placed online; all communication from potential victims regarding the case should be made via this Web site. Updates about the status of the case will be posted at http://www.justice.gov/usao/mow/petro.html


 

            Phillips cautioned that the charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.


 

            This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation, the U.S. Postal Inspection Service and the Office of the Missouri Securities Commissioner.

****************

This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

http://www.justice.gov/usao/mow/index.html

 

 

Copies of the Affidavit and Complaint filed by the U.S. Attorney's Office against Petro America Corp:


http://media.kansascity.com/smedia/2010/10/22/22/Affidavit.source.prod_affiliate.81.pdf

http://media.kansascity.com/smedia/2010/10/22/22/Complaint.source.prod_affiliate.81.pdf

 

 Federal prosecutors have set up two websites for victims of the alleged scheme.

http://www.postalinspectorsurvey.com/PetroAmerica

http://www.justice.gov/usao/mow/petro.html (this will be to follow the legal proceedings with the DOJ as they develop)

 

39 page criminal complaint against Owen Hawkins:

http://media.kansascity.com/smedia/2010/10/27/19/hawkins_complaint__1_.source.prod_affiliate.81.pdf


 

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#12021   The drama is over. Curtains close. dhrr06 10/14/13 08:21:57 PM
#12020   Owen Gets 30 Years!! DrHarleyboy 10/08/13 02:15:52 PM
#12019   Owen Hawkins and thirteen others convicted of fraud DrHarleyboy 08/28/13 08:32:01 AM
#12018   Slim, there is no Taxable Loss section for DrHarleyboy 05/20/13 08:15:34 AM
#12017   How can we write this off on Taxes Slim_2006 05/19/13 03:02:29 PM
#12016   Because you have incorrectly listed David Jerome Greene, Jhg1 02/12/13 02:03:11 PM
#12015   Because you have incorrectly listed David Jerome Greene, Jhg1 02/12/13 01:59:25 PM
#12014   Two Web sites have been established to collect scion 10/10/12 03:46:56 PM
#12013   It is sad. I know someone who dhrr06 09/29/12 11:31:16 AM
#12012   It's amazing how for the longest, they would dhrr06 09/29/12 11:27:22 AM
#12011   There are probably a few sheeple out there DrHarleyboy 09/29/12 06:54:10 AM
#12010   I can't believe this is still here...lol.... dhrr06 09/24/12 08:50:45 PM
#12009   Sixth Petro America defendant pleads guilty scion 06/19/12 07:19:20 PM
#12008   Thanks scion, People can keep updated on the Old Hillbilly 05/29/12 11:12:50 AM
#12007   Petro America trial is put off until October scion 05/29/12 10:59:18 AM
#12006   Pacer update 04/11/2012 Old Hillbilly 04/12/12 05:44:01 PM
#12005   Trial postponed: June 4: Isreal Owen Hawkins, Jr., Old Hillbilly 10/16/11 06:59:15 PM
#12004   so the guy who hijacked this shell is puppydotcom 09/23/11 03:49:10 PM
#12003   The feds follow the money. Whatever they hid puthimaway 09/06/11 07:22:43 AM
#12002   You're getting ahead of yourself wouldn't you say! puthimaway 09/06/11 07:19:32 AM
#12001   Sure, Larry Martinie is a crooked buddy of puthimaway 09/06/11 07:16:24 AM
#12000   This all has to do with Petro because puthimaway 09/06/11 07:13:31 AM
#11999   Cancel post! dhrr06 07/20/11 10:00:55 AM
#11998   FAKE MERGER!!!! dhrr06 05/01/11 08:01:54 PM
#11997   When they get out of jail, I believe DrHarleyboy 05/01/11 12:08:57 PM
#11996   They were riding high for a moment! Looking dhrr06 04/30/11 10:39:06 AM
#11995   I'm sure he sold all he could, it's DrHarleyboy 04/30/11 09:05:42 AM
#11994   Does Owen still hold this stock, or did dhrr06 03/23/11 01:35:41 PM
#11993   Fixed bad link for media.kansascity.com/smedia/2010/10/22/22/Affidavit.source.prod_affiliate.81 Old Hillbilly 03/19/11 09:10:01 PM
#11992   To help you understand, there are two companies Old Hillbilly 03/19/11 07:19:53 PM
#11991   Welcome to the "NUMB" that is Petro Debacle. DrHarleyboy 03/19/11 05:39:40 PM
#11990   I can totally see how someone could be Looking4Truth 03/19/11 04:58:58 PM
#11989   Yes, but the comapny shell has nothing to DrHarleyboy 03/19/11 12:19:54 AM
#11988   If I understand correctly, doesn't PTRZ or whatever Looking4Truth 03/19/11 12:02:34 AM
#11987   That's fine, but this stock has absolutely nothing DrHarleyboy 03/17/11 10:04:19 AM
#11986   If PTRZ is still alive, then someone needs dhrr06 03/16/11 10:32:21 PM
#11985   The update is that it is still alive. REDDOG22 03/16/11 06:43:55 PM
#11984   Yup, it looks like for now it has dhrr06 03/14/11 09:08:31 AM
#11983   Looks like ALL suporters have fled...no one left DrHarleyboy 03/11/11 10:18:24 AM
#11982   Did you read that email she wrote telling dhrr06 03/11/11 10:03:16 AM
#11981   Nothing; the share price has collapsed as predicted. DrHarleyboy 03/10/11 03:43:39 PM
#11980   Is this stock dead at this point? dhrr06 03/10/11 02:59:07 PM
#11979   Yeah, I was curious if anything was going dhrr06 02/16/11 03:34:26 PM
#11978   I'm not sure; I know the company is DrHarleyboy 02/16/11 03:26:59 PM
#11977   Does this company still exist? There has dhrr06 02/16/11 03:08:13 PM
#11976   You DO know that PTRZ has absolutely NOTHING DrHarleyboy 02/13/11 01:42:43 AM
#11975   Yes, I can see how well they traded dhrr06 02/02/11 08:22:24 PM
#11974   Well sir, REDDOG22 02/02/11 06:29:26 PM
#11973   It looks like Owen and Co made out dhrr06 02/02/11 04:24:48 AM
#11972   Yes, it is, but it's also indicative of dhrr06 02/01/11 08:37:52 AM
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