Jeffrey Watts Pleads Guilty to Defrauding Clients in $5.8 million Oil and Gas Ponzi Scheme
Jeffrey Watts, an investment professional in Fort Worth, Texas, was charged with defrauding at least 45 of his investors of $5.8 million in an oil and gas Ponzi scheme.
The Peiffer Wolf law firm’s securities practice attorneys Jason Kane and Joe Peiffer are investigating the matter on behalf of investors.
Watts Misinformed and Defrauded Investors
Watts, the founder and principal of Blue Alpha Energy, partook in this scheme from late 2011 to December of 2013, as per the indictment. Watts informed his investors that they were investing in the oil and gas wells in Texas. He told them that the wells were owned and/or operated by a legitimate and unconnected company in Fort Worth called Arrowhead Production. Watts also showed them documentation that contained the signature of the actual president of Arrowhead Production.
Watts depicted his fake entities as legitimate, third party lenders or investors in his supposed oil and gas interests, as stated by the U.S. attorney. He also partook in the transferring of investors’ funds between their accounts and Blue Alpha Energy’s accounts. Watts misinformed his investors that they would be given monthly distributions according to their ownership percentage in Arrowhead Production’s oil and gas wells. In order to make his claims believable, he made monthly payments to Blue Alpha Energy investors, using investor money moved from the phony entities he controlled, as specified by prosecutors. In addition, Watts fooled his business partners and employees into trusting his fraudulent representations, which in turn made them disseminate printed investment information that transmitted his misrepresentations, as declared by the U.S. attorney.
Watts Admits to Committing Wire Fraud
In December of 2013, Watt’s scheme unraveled when the investors of Blue Alpha Energy discovered Watts never had investment agreements with Arrowhead Productions, according to the prosecutors. On July 8, 2014, Watts pled guilty to one count of wire fraud in federal court, according to the U.S. Attorney’s Office. The sentencing is scheduled to take place on December 9, 2014 and the charge may result in a sentence of a maximum of 20 years in prison and a $250,000 fine.
Investor Right Attorneys Investigating Watts’ Misconduct
The Peiffer Wolf attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting investors with the recovery of any losses they may have suffered in connection with Jeffrey Watts. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Wolf, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 585-310-5140.
Broker: Jeffrey Watts
Status: INVESTIGATED by Peiffer Wolf.
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