Springs oil and gas investment promoters charged with fraud

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Colorado Securities Commissioner Fred Joseph filed a fraud complaint today in Denver District Court against four businesses, saying their investment marketing tactics violated the Colorado Securities Act.

The companies, HEI Resources, Heartland Energy Development Corp., Bedrock Energy Development and Gulf Coast Western, along with a number of associates and attorneys named in the complaint, are accused of perpetrating a long-running scheme to defraud investors by offering the sale of unregistered securities in the form of interests in oil and gas drilling operations.

The complaint says HEI’s founder and CEO Reed Cagle and associate Joe Kinlaw orchestrated the scheme by directing sales agents to make misleading and unsubstantiated statements about prospects for successful investment returns and the previous track records, all the while minimizing or dismissing the risk associated with drilling each well.

It is also alleged that HEI Resources and Gulf Coast Western operate “boiler rooms” in Colorado Springs, and Heartland Energy Development Corporation and Bedrock Energy Development operate “boiler rooms” in Englewood and Greenwood Village.

Boiler rooms typically feature numerous salesmen, each making hundreds of cold-calls per day to unsuspecting individuals, using scripted sales pitches and high pressure tactics to push investment opportunities.

2 Responses to Springs oil and gas investment promoters charged with fraud

  1. wonder if this story is put out across the country for others to see in the cities these thiefs are targeting?

    Concern Citizen
    July 24, 2009 at 2:20 pm

  2. We must be living in some crazy society now. Anyone who ever signs any contract regarding oil and gas knows there is risk involved. Also those documents must be notarized before entering a contract, the state is just again trying to steal money from companies who are making money. by the way, if these people have the money to invest, they can make their own educated decision, they don’t need some official from the state making $50,000 a year to tell them how to invest their money

    February 26, 2010 at 1:35 pm