Stanley Jonathan Fortenberry of San Angelo, Texas, pleaded guilty on November 18, 2016 to an indictment charging him with obstruction of justice and other charges in connection with two investment companies he ran that allegedly defrauded investors out of approximately $900,000 over a four-year period, according to an SEC press release.
According to the indictment, from 2013 to 2014, Fortenberry ran Wattenberg Energy Partners, which raised funds for oil and gas drilling projects in northern Colorado. Fortenberry allegedly set up the company in his son’s name because Texas and Pennsylvania state securities regulators had previously ordered Fortenberry to not sell unregistered securities in oil drilling projects.
The indictment alleges that Fortenberry used a network of salespeople to call and solicit individuals to invest in drilling projects. Rather than designate investors’ funds for drilling projects as promised, the indictment alleges that Fortenberry spent the vast majority of the funds on himself and the company’s fundraising operation.
From 2010 to 2012, Fortenberry also allegedly ran a separate fraudulent scheme conducted through Premier Investment Fund. According to the indictment, through Premier, Fortenberry raised funds from investors for social media projects run by another company connected to the country music industry.
The indictment alleges that Fortenberry misrepresented to investors the profitability of the company and how he would be compensated. The company earned no profits and Fortenberry spent approximately half of the funds raised on himself, according to the indictment.
In total, the indictment alleges that Fortenberry defrauded investors out of approximately $900,000 through both companies.
In October 2014, Fortenberry allegedly gave false and misleading testimony in an administrative proceeding before the U.S. Securities and Exchange Commission (SEC), which was investigating Fortenberry at the time for misusing funds that investors had entrusted to Premier.
On March 2, 2015, an SEC administrative law judge imposed a cease-and-desist order and ordered Fortenberry to disgorge $146,500 plus prejudgment interest, pay a $900,000 civil money penalty, and be permanently barred from the securities industry. On April 7, 2015, the initial decision became final.
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