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The feds follow the money. Whatever they hid won't be there for them!
You're getting ahead of yourself wouldn't you say!
With pleas, etc. they may not go to jail or not for long if they do!!
Sure, Larry Martinie is a crooked buddy of Langenbach, Andrew and Greene. They all work together to steal your hard earned money.
This all has to do with Petro because these creeps are all in it together. They are partners and involved in all the scams.
FAKE MERGER!!!!
I was reading about the merger the other day....reading it, you can tell it was an intentional scam. They set everything up then amended everything...not to mention, Petro Kansas, was never even included in the merger in any way. It was such a pump, to get everyone buying with the intent everyone was going to be a billionaire...what a joke. I feel sorry for those buying at $1.65...at least they will have a tax write off....although, that's not much of a comfort...
When they get out of jail, I believe their financial activity will be CLOSELY WATCHED...besides, they have crimes facing the false and misleading emails they solicited about this stock as they dumped their shares they bought BEFORE the fake merger.
Dr H
They were riding high for a moment! Looking back, wonder if it was worth it to them. I know for some insiders it was since they made lots of money when the stock was in pump mode, but for Owen and gang...wonder if they have any second thoughts? I guess that might depend upon if they have any millions stashed away somewhere, for when they get out of jail...
I'm sure he sold all he could, it's just about completely worthless now...where are the people screaming buy now? LOL! Silly people here STILL don't realize this has NOTHING to do with Petro America Kansas OR Deleware!
Dr H
Does Owen still hold this stock, or did he sell?
Fixed bad link for affidavit.
Referring to
19. To confuse investors, Hawkins, Brown and others attempted to blur the lines
between the acquired entities, none of which are related to Petro America. For example,
Hawkins changed ASWD’s name to “Petro America Delaware,” because ASWD had previously
traded on the Pink Sheets under the symbol ASWD. Hawkins then changed the ASWD symbol
to PTRZ on June 12, 2009. Petro America’s website might easily lead a reader to conclude that
Petro Delaware is a true successor to Petro America. In fact, while Hawkins is the largest
shareholder of Petro Delaware, (due to $22,500 worth of shares Hawkins purchased in his own
name with Petro investor funds) Petro America is not a holder of record of any Petro Delaware
shares.(9)
20. Michelle Smith is Owen Hawkins’ sister. She works for Hawkins Maintenance
Company, or HMC, out of office space that HMC shares with Petro America. On October 24,
2008, Petro announced on its website (in the “Resent Press Releases” section [sic]) that it has
entered into a negotiation to acquire a construction company, HMC Enterprises, for its
“exploration division.” Hawkins was asked about this press release during his deposition with
the Missouri Securities Commissioner on April 7, 2009: “And who are you negotiating with
individually [to acquire HMC Enterprises]?” Hawkins replied, “Michelle Smith.” Hawkins
did not disclose his relationship with Smith in the press release.
Moreover, there was no exchange of shares that would make the shareholders in Petro
America holders of publicly-traded stock.
9 Hawkins admits that this $22,500 was in addition to the $140,000 Petro purportedly paid to
acquire ASWD.
To help you understand, there are two companies named "Petro America Corp" One incorporated in Kansas (associated by the term "church shares") and the other one incorporated in Delaware.( the original name American Southwest Music Distribution, Inc. was changed to Petro America Corp) Please note that the name change was not reported to the SEC or was the change of CEO from Chris Lotto to Owen Hawkins! Because no 14C (click here for an example)was filed, the SEC still has them listed as American Southwest Music Distribution, Inc.
http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=0001122771&filenum=&State=&SIC=&owner=include&action=getcompany
American Southwest Music Distribution, Inc CIK#: 0001122771 (see all company filings)
SIC: 7011 - HOTELS & MOTELS
State location: CA | State of Inc.: DE | Fiscal Year End: 1231
formerly: GL ENERGY & EXPLORATION INC (filings through 2006-09-14)
formerly: LRS CAPITAL INC (filings through 2001-02-26)
(Assistant Director Office No 8)
PETRO AMERICA CORP CIK#: 0001447994 (see all company filings)
State location: MO | State of Inc.: KS
nodummy Saturday, September 11, 2010 11:20:27 PM
Post #6857 (from KS board
I've been reading up on the process for getting a new trading symbol. Sounds like it is done through FINRA simply by paying some kind of processing fee which was only a few hundred dollars depending on which exchange.
Apparently though FINRA's jurisdiction and regulatory authority does not reach very far. They were not privy to certain information about companies and their securities which led to some major concerns by the SEC about companies exploiting the system to further advance their fraudulent activities.
Here is a quote from one very small section of the documents I read:
See, e.g., Commission Order of Suspension of Trading In the Matter of Andros Isle, Corporation, et al., dated March 13, 2008 (File No. 500-1), in which the Commission suspended trading pursuant to Section 12(k) of the Act, 15 U.S.C. 78l(k), in the securities of approximately 26 Pink Sheet securities, stating “[c]ertain persons appear to have usurped the identity of a defunct or inactive publicly traded corporation, initially by incorporating a new entity using the same name, and then by obtaining a new CUSIP number and ticker symbol based on the apparently false representation that they were duly authorized officers, directors and/or agents of the original publicly traded corporation.” See also SEC v. Irwin Boock, Stanton B.J. DeFreitas, Nicolette D. Loisel, Roger L. Shoss, and Jason C. Wong, Birte Boock, and 1621566 Ontario, Inc., Civil Action No. 09 CV 8261 (S.D.N.Y.) (DLC), Litigation Release No. 21243 (October 8, 2009) (Commission Charges Five With Dozens of Fraudulent Corporate Hijackings and Unregistered Offerings of Securities and Names Two Relief Defendants)
Welcome to the "NUMB" that is Petro Debacle. There is nothing.
Dr H
I can totally see how someone could be confused! What a mess!
oh my gosh! I knew this was a scam, but I think it just now sunk in how bad of a scam it was! Basically, everyone who bought "church shares" did not buy real shares. They just gave Owen their money. The church "shares" are not associated with any exchanges at all, are they? They are not really even shares, huh? Suddenly I understand why these so-called shares will never trade. Because they were never shares. There is no chance that what they bought will ever give a return of investment. ever.
Really, then, the 'company' called Petro America, is in no way related to PTRZ/ASWD and now, I'm really wondering how a Petro America board even belongs here on Investor's Hub. How can they say there are shareholders? What the heck are the auditors auditing?
This is really disgusting.
Yes, but the comapny shell has nothing to do with Petro America Corp at all. It's still ASWD, and has ZERO to do with Petro America other than they lied about it being so in "official" public company emails that circulated; which will surely land them in prison.
Dr H
If I understand correctly, doesn't PTRZ or whatever it's really called owe a boatload of taxes and fees? Isn't the deadline coming up pretty soon?
Do you think that the same thing that happened to WTAI will happen to PTRZ?
That's fine, but this stock has absolutely nothing to with Petro America company at all; Remember, this is STILL ASWD with a name change, nothing more. ZERO to do with Petro America Corp at all.
Dr H
If PTRZ is still alive, then someone needs to let it know...lol...
The update is that it is still alive.
Yup, it looks like for now it has flat lined.
Looks like ALL suporters have fled...no one left to praise the ASWD shell....I thought it was the "Peoples Company"; until they go to jail I guess :)
Dr H
Did you read that email she wrote telling everyone Petro started trading and they were millionaires??? Right after that the SEC suspended trading....
Nothing; the share price has collapsed as predicted. It is a dirty shell that is actually ASWD still, only the name changed. Absolute ZERO involvement with Petro America Kansas, anyone who bought shares thinking they were buying Petro America have certainly been had. Stupid, Teresa sent a public email proclaiming this "is the Petro America Stock trading now"; that will land her in jail on that lie alone.
Dr H
Is this stock dead at this point? I can't find any filings, or anything related to PTRZ at this point. Does anyone have any updated information for PTRZ?
Yeah, I was curious if anything was going on...I knew they are ASWD, but wasn't sure if they were trying to get their debts in order. I think in March, or April of 2011 things are due to be paid. I don't think they have tried to make good on the back due taxes...just haven't had a chance to investigate yet. They don't have very many weeks left to get these issues settled.
I'm not sure; I know the company is actually ASWD, so it has nothing to do with Petro America or and of the phony business affiliates. It's just a shell vith $0 value and huge liabilities. Anyone holding stock here is likely fit to lose all value soon enough.
H
Does this company still exist? There has been no action for weeks. Has anything new been filed?
You DO know that PTRZ has absolutely NOTHING to do with "Petro America" at all right? Perhaps you should read a little more carefully:
Page 11 of 39 from the Indictment:
Paragraph 20:
20. To confuse investors, Hawkins and his co-conspirators attempted to blur the lines
between the acquired entities, none of which are related to Petro America. For example, Hawkins
changed ASWD’s name to “Petro America Delaware,” because ASWD had previously traded on
the Pink Sheets under the symbol ASWD. Hawkins then changed the ASWD symbol to PTRZ on
June 12, 2009. Petro America's website might easily lead a reader to conclude that Petro Delaware
is a true successor to Petro America. In fact, while Hawkins is the largest shareholder of Petro
Delaware, (due to $22,500 worth of shares Hawkins purchased in his own name with Petro investor
funds) Petro America is not a holder of record of any Petro Delaware shares. Moreover, there was
no exchange of shares that would make the shareholders in Petro America holders of publicly-traded
stock.
http://www.justice.gov/usao/mow/news2010/hawkins_complaint.pdf
Glad to help you out as always,
H
Yes, I can see how well they traded today ...
Well sir,
maybe you should contact those that can change the system. For now, there is not a lot this board can do about the system. FYI, PTRZ has not been de-listed. trades are still happening.
It looks like Owen and Co made out like a bandit...no pun intended....his ROI was pretty good. Wonder why he didn't use some of that money to pay for his own attorney, instead of letting tax payers pay for his legal mess...that really chaps me, how he uses the system.
Yes, it is, but it's also indicative of a lack of support for Petro....
Looks like someone is still selling, down 98% from when Owen pumped it with lies.... nice ROI here ...LOL!
H
1000 shares is 1000 shares.
Wow, looks like someone just bought $10.00 of petro stock...it's about time something moved...
Who are the non attorneys who signed it? They should be prosecuted for that.
One of Langenbach's partners who has been in jail since May was a pretend attorney too. He is going to get a plea bargain of approximately 10-15 years. He also is accused of fraud, theft, and forgery.
Mike500;
Welcome back!
H
Yes, I agree with. Petro IS moving forward with the arrests and future trial :)
H
Not really old news, it shows Petro is moving forward....
I agree with you. I had some documents that showed when the next taxes and fee need to be paid. For PTRZ they are in March or April of 2011. I believe it's March.....so if they don't come up with several hundred thousand dollars...PTRZ will become toast....I think the gig is just about up. Of course, since the major stock holder is/or was Owen, I don't think the "new" group can do anything about PTRZ. Petro Kansas doesn't own it...like you said, Owen does....and we know where he's at these days. It's a shame they were so greedy.
Wonder how long before the SEC Revokes PTRZ?
Like they did WTAI
http://www.sec.gov/litigation/aljdec/2010/id397rgm.pdf
Owen wanted to do another Pump with WTAI and Teresa Brown had illegally (see court docs) pre loaded a bunch of that stock!
All these Petro Ks "shareholders" were used to pump up PTRZ and Petro Ks didn;t even have any interest in PTRZ! Turns out Owen himself was the major stock holder!
This should infuriate Petro Ks "shareholders" who's money was used to buy Owens majority position in PTRZ and then insulted by being led to believe a R/M had taken place. Read all our posts here on Ihub back in July 09 through well some are still posting!!!!
Really start reading from April when the start of the pump began: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=37244875
These are the owners of ASWD stock.
Thats the sad part of an affinity scam, using blind faith. Hopefully the veil of deception has been lifted for most.
GLTA
Yes, it looks like they are moving forward....
Pacer update 06 Jan 11 - USA v Hawkins CRIMINAL COMPLAINT Case Number: 4:10-cr-00332-ODS All Defendants
https://ecf.mowd.uscourts.gov/cgi-bin/iquery.pl
Date Filed # Docket Text
01/06/2011 53 ARREST WARRANT RETURNED EXECUTED on 10/27/10 as to Isreal Owen Hawkins, Jr. This document contains original signatures of non attorneys and is being maintained in a paper file at the court.(Rowland, Bonnie) (Entered: 01/06/2011)
12/30/2010 52 TRIAL ORDER as to Isreal Owen Hawkins, Jr, Teresa Brown, Johnny Heurung, 50 MOTION to continue trial from February 14, 2011 to November 29, 2011 filed by Johnny Heurung, and 40 MOTION to continue filed by Isreal Owen Hawkins, Jr are granted. The case is set for trial on the Joint Criminal Jury Trial Docket commencing on November 28, 2011. A final pretrial conference is set for November 8, 2011. On or before August 2, 2011, the parties shall file any relevant pretrial motions. Any suggestions in opposition shall be filed within thirty days from the date the motion is filed. See Order for additional deadlines. Signed on 12/30/2010 by Magistrate Judge Sarah W. Hays.(Gicinto, JoRita) (Entered: 12/30/2010)
12/23/2010 50 MOTION to continue trial from February 14, 2011 to November 29, 2011 by Johnny Heurung. Suggestions in opposition/response due by 1/10/2011 unless otherwise directed by the court. (Sandage, Lance) (Entered: 12/23/2010)
12/20/2010 49 ARREST WARRANT RETURNED EXECUTED on 12/16/2010 as to Johnny Heurung. This document contains original signatures of non attorneys and is being maintained in a paper file at the court.(Martin, Jan) (Entered: 12/20/2010)
12/17/2010 47 AFFIDAVIT of Financial Status of Johnny Heurung. This document contains original signatures of non attorneys and is being maintained in a paper file at the court. (Gicinto, JoRita) (Entered: 12/17/2010)
12/16/2010 51 ORDER setting conditions of release as to Johnny Heurung. Defendant released on a personal recognizance bond. This document contains original signatures of non attorneys and is being maintained in a paper file at the court.. Signed on 12/16/10 by Magistrate Judge Sarah W. Hays.(Myers, Dorothy) (Entered: 12/23/2010)
12/16/2010 46 Minute Entry for proceedings held before Magistrate Judge Sarah W. Hays: SCHEDULING CONFERENCE as to Isreal Owen Hawkins, Jr, Teresa Brown held on 12/16/10. Government counsel appears in person; Defense counsel appears in person; Defendant Hawkins, Jr. appears in person; defendant Brown appears by telephone. Motion for Continuance filed by defendant Hawkins, Jr. requesting trial to be reset to November 29, 2011. Defense counsel gives further explanation as to why continuance of trial from the January 10, 2011 trial docket is necessary. The Court must first conduct a scheduling conferencewith the co-defendants prior to resetting the trial date. No objection by either defendant. No objection by government counsel. Discovery issues discussed. As of last week, the government produced, in digital format, approximately 27,000 pages of discovery, consisting of bank records, financial documents, and recordings of telephone calls (approximately 80-90), which accounts for approximately half of the all discovery. An additional 10,000-15,000 pages are currently being prepared to send to IVIZE within the next couple of weeks. The remaining discovery to be produced will be in the range of 25,000-30,000 pages and should be produced to defendants within the next 30-45 days. Defendant request pretrial motions to be filed by August 2, 2011. Government responses due within thirty days from the date the motion is filed. To order a transcript of this hearing please contact Lori Carr, 816-512-5064. (Carr, Lori) (Entered: 12/17/2010)
12/16/2010 45 ORDER APPOINTING COUNSEL UNDER CJA as to Johnny Heurung. Lance Sandage appointed. Signed on 12/16/10 by Magistrate Judge Sarah W. Hays.(Carr, Lori) (Entered: 12/16/2010)
12/16/2010 44 Minute Entry for proceedings held before Magistrate Judge Sarah W. Hays: INITIAL APPEARANCE and ARRAIGNMENT as to Johnny Heurung (3) Count 1,13-14 held on 12/16/2010. INITIAL APPEARANCE and ARRAIGNMENT as to Johnny Heurung (3) Count 1,13-14 held on 12/16/2010. Bond Set: Personal Recognizance. Conditions of release read to the defendants. Defendant entered a plea of not guilty to each count of the indictment applicable to him/her. Defendant ordered released on a continuing bail bond. Case ordered set for trial on the joint criminal jury trial docket which commences February 14, 2011. If the parties and defendant Heurung agree to a continuance of this matter to the November, 2011 joint criminal trial docket, a scheduling conference will not be necessary; if, however, the parties do not agree, then counsel for Heurung was directed to contact the Courtroom Deputy to set a hearing. If parties do not agree, then counsel for Heurung was directed to contact the Courtroom Deputy to set a hearing. Ex parte discussion with Lance Sandage, CJA counsel, who was given a copy of the financial affidavit and directed to complete the form with the defendant and electronically file the affidavit within the next week. If counsel believes the information contains private information, then counsel should contact the Courtroom Deputy so the document may be filed under seal. Defendant released on bond. To order a transcript of this hearing please contact Lori Carr, 816-512-5064. (Carr, Lori) (Entered: 12/16/2010)
12/16/2010 ARREST of Johnny Heurung (Carr, Lori) (Entered: 12/16/2010)
12/15/2010 42 NOTICE OF ATTORNEY APPEARANCE - Melanie Susan Morgan appearing for Teresa Brown. (Morgan, Melanie) (Entered: 12/15/2010)
12/15/2010 41 NOTICE OF HEARING as to Johnny Heurung. This is the official notice for this hearing. Initial Appearance and Arraignment set for 12/16/2010 03:00 PM in Courtroom 6E, Kansas City (SWH) before Magistrate Judge Sarah W. Hays. Signed on 12/15/2010 by Magistrate Judge Sarah W. Hays.This is a TEXT ONLY ENTRY. No document is attached.(Gicinto, JoRita) (Entered: 12/15/2010)
12/15/2010 40 MOTION to continue by Isreal Owen Hawkins, Jr. Suggestions in opposition/response due by 1/3/2011 unless otherwise directed by the court. (Moss, Stephen) (Entered: 12/15/2010)
12/14/2010 48 ADDENDUM TO ORDER setting conditions of release as to Isreal Owen Hawkins, Jr. This document contains original signatures of non attorneys and is being maintained in a paper file at the court.. Signed on 12/14/2010 by Magistrate Judge Sarah W. Hays.This is a TEXT ONLY ENTRY. No document is attached.(Gicinto, JoRita) (Entered: 12/17/2010)
12/14/2010 43 Minute Entry for proceedings held before Magistrate Judge Sarah W. Hays: BOND HEARING/CONDITIONS OF RELEASE as to Isreal Owen Hawkins, Jr held on 12/14/2010. After prior discussion between the Court and counsel, the parties agreed to add further conditions to the existing Order Setting Conditions of Release issued on 12/8/10. The additional conditions of release were read to defendant and defendant was reminded the original Order Setting Conditions of Release remains in effect. Defendant released from custody. Court adjourned. To order a transcript of this hearing please contact Lori Carr, 816-512-5064. (Carr, Lori) (Entered: 12/16/2010)
12/13/2010 37 SEALED TRANSCRIPT as to Isreal Owen Hawkins, Jr of Hearing on Attorney Representation held December 6, 2010 before Judge Sarah W. Hays. Court Reporter: Lissa Whittaker.(Whittaker, Lissa) (Entered: 12/13/2010)
12/13/2010 36 ELECTRONIC TRANSCRIPT as to Isreal Owen Hawkins, Jr of Show Cause Hearing held December 6, 2010 before Judge Sarah W. Hays. Court Reporter: Lissa Whittaker, 816-914-3613, rapidtranscript@kc.rr.com. NOTICE RE: REDACTION OF TRANSCRIPTS: Within 7 calendar days of this filing, each party shall inform the Court, by filing a Notice of Redaction, of the parties' intent to redact personal data identifiers from the electronic transcript of the court proceeding. The policy is located on our website at www.mow.uscourts.gov. Please read this policy carefully. NOTICE: Attorneys must contact the court reporter for copies during this 90 day period. Notice of Intent to File Redaction of Transcripts due by 12/20/2010. Release of Transcript Restriction set for 3/14/2011.(Whittaker, Lissa) (Entered: 12/13/2010)
Case title: USA v. Hawkins et al
Magistrate judge case number: 4:10-mj-00171-SWH
Date Filed: 11/22/2010
Assigned to: District Judge Ortrie D. Smith
Referred to: Magistrate Judge Sarah W. Hays
4:10-cr-00332-ODS USA v. Hawkins et al
4:10-cr-00332-ODS-1 Isreal Owen Hawkins, Jr
4:10-cr-00332-ODS-2 Teresa Brown
4:10-cr-00332-ODS-3 Johnny Heurung
4:10-cr-00332-ODS-4 Clarence D Moore
Defendant (1)
Isreal Owen Hawkins, Jr
represented by FPD
Federal Public Defender
818 Grand Boulevard
Suite 300
Kansas City, MO 64106
(816) 471-8282
Email: ray_conrad@fd.org
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Designation: Public Defender or Community Defender Appointment
Stephen C Moss
Federal Public Defender's Office
818 Grand Ave
Ste 300
Kansas City, MO 64106
816-471-8282
Fax: 816-471-8008
Email: steve_moss@fd.org
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Designation: Public Defender or Community Defender Appointment
Pending Counts
CONSPIRACY
(1)
SECURITIES FRAUD
(2)
AGGRAVATED CURRENCY STRUCTURING
(3)
MONEY LAUNDERING
(4)
WIRE FRAUD
(5-6)
Highest Offense Level (Opening)
Felony
https://ecf.mowd.uscourts.gov/cgi-bin/iquery.pl
Yes, it is his opinion and mine to, but that "opinion" is based on factual evidence that will be presented in court....Don't you get it...if this wasn't a scam, it would have been trading three years ago.
That is your opinion.
EOM.
GLTY.
That is good that "Reliable Sources",,, "cough", have informed you of such. The more documentaion the better. Time will tell.
Good Luck To You.
Maybe the IRS was not happy with this part;
Putting Assets on Petro’s Books
12. It was further part of the conspiracy that, in order to keep early investors placated and to attract new investors, HAWKINS, BROWN, HEURUNG and others attempted to swap additional Petro stock in order to claim that Petro had tangible assets.
22. It was further part of the conspiracy that, in the spring of 2010, MOORE drove from Atlanta to Kansas City to prepare tax returns for Petro America. HAWKINS and MOORE prepared
the returns together, working from Petro’s incomplete financial records and from information that HAWKINS provided orally to MOORE. Nonetheless, both HAWKINS and MOORE signed and filed the returns, which contained false, misleading, and incomplete information. They also provided copies to the U.S. Attorney’s office. HAWKINS paid MOORE for the work. Petro’s 2007 return showed $150,000 in assets and taxable income of $3,545. Petro’s 2008 return showed $81,101,654 in assets and a loss of $104,642. Petro’s 2009 return showed $284 billion in assets but taxable income of only $9,334. For the three years in total, MOORE and HAWKINS listed a loss of $91,763 in aggregated income totals for Petro. The returns fraudulently included income actually generated by Performance Packaging that was not distributed to Petro America.
REDDOG22, money stolen from people thinking they were investing in an oil and gold company with Billions of dollars in assets when all they were doing is funding a conman's lifestyle with assistance of others or bought PTRZ stock thinking it was the same thing. Reliable sources say that there is documentation of who received the over $302,000 given to friends and family and specifically all of the $217,859 given to the 21 defined "vendors and consultants".
Good luck.
Companies are tax revenue for the government, so there is no incentive for the govt to close down a company...I don't think they have it in for Petro...they are just enforcing the regulatory laws....Owen should have played by the rules, instead of doing what ever he wanted to do....then blame it on the government bodies...
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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
________________________________________________________________________________________________________________________________
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.
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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.
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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