Dallas radio host accused of SEC fraud over using oil and gas funds for club memberships and loans


A licensed petroleum engineer in Dallas used a radio show to lure investors into a fraudulent oil and gas investment opportunity, according to a complaint filed by the United States Securities and Exchange Commission this week.

Mark Plummer touted the benefits of oil and gas investments on his radio show, “Smart Oil and Gas,” on KRLD, and encouraged listeners to call for more information. When they did, they were routed to Petroleum Resources of Texas, a company that secretly worked with Plummer, according to the complaint.

He encouraged people to invest with Petroleum Resources of Texas without revealing that it was owned by its former seller, Mike Barrera, and that he was involved, according to the complaint filed Thursday.

Barrera was also not a registered broker, but he did solicit and sell securities, according to the complaint.

The company raised more than $ 7 million from more than 70 investors from 2018 to 2020 for two oil and gas well projects, according to the complaint. The money was diverted to Plummer through his latest company, Richmond Engineering Inc., he said.

According to the complaint, Plummer then used the funds to pay for club memberships, student loans, personal credit card debt, and car and mortgage payments.

Barrera, his business partner, has also used funds inappropriately, he said.

“Barrera has embezzled and embezzled investor funds, especially to pay for his lavish lifestyle,” the complaint reads.

Barrera also told investors his company will run well projects when Plummer actually does, according to the complaint. Three other people – Todd Prince, George Rauch and Todd Stuart Breitling – are also listed in the complaint as having participated in the fraud.

Plummer’s attorney, Kit Addleman, a partner in Haynes and Boone’s Dallas and Fort Worth offices, did not immediately return a request for comment. Barrera does not have a lawyer.

Plummer started the new company because his former company, Texas E&P Partners Inc., was accused of embezzling investor funds in a similar fashion, according to charges filed by the SEC in June 2019.

Texas E&P raised $ 6.1 million from 2015 to 2017, and Plummer spent nearly $ 400,000 on personal use or improper business expenses, including entertainment, travel, retail and business expenses. income taxes, according to the charges.

He agreed to pay more than $ 500,000 to settle the charges, according to the SEC.

Barrera was indicted in June 2014 with a second degree felony of aggravated assault with a deadly weapon and then pleaded nolo pretendere, meaning he suffered the consequences of a guilty plea without admitting his guilt, according to the SEC complaint.

With repeat offenders, questions arise as to whether the punishment is severe enough. But the SEC is a civil investigative agency that is limited in what it can do, including not being able to put people in jail, SEC regional director David Peavler said. And for some, no punishment will deter them, he said.

“Some people are criminals with the mentality of taking people’s money,” he said.

Barrera’s company has stopped asking for the money, so the SEC is not seeking a temporary restraining order, Peavler said. Instead, he will ask that the defendants no longer be allowed to offer oil and gas titles.

Recoveries – if applicable – for investors are impossible to predict, Peavler said. In cases like these, the “bad guys” often spend the money on personal expenses and by the time the SEC is involved, there isn’t much left to give back to the victims, he said.

“Bad guys are good at spending money. They are fraudsters. They don’t put money into a 401 (k) or a mutual fund, ”he said.

While it is possible to seize property to recover some of the money for investors who have been defrauded, the problem is finding something of value to seize, Peavler said. Scammers often buy expensive homes that are mostly mortgaged and rent expensive cars, he said.

When the SEC gets involved, it finds that someone else is entitled to these assets, such as a car leasing or mortgage company.

In the oil and gas business, scammers often work on a bad well that has little or no potential, so it also can’t be sold for much, he said.

Avoiding fraudulent investment opportunities can be as simple as checking whether the company is registered with the SEC, Peavler said.

“Scammers rely on people who don’t do their homework,” he said. “The more research done in advance, the less likely someone is to give their money to a stranger for a scam.”

Unfortunately, there will always be bad actors, so people have to learn to do their own research, Peavler said.

“I wish I could say that someday, somewhere, these types of cases will go away, but they won’t,” he said.

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