Never graduated high school. Pled no contest to a second-degree felony, aggravated assault with a deadly weapon. Never had a supervisory role. No significant oil and gas experience, other than sales. Sound like someone you’d find living paycheck to paycheck, right? Or, maybe this is a person who pulled himself up by his bootstraps and became a huge success. Who is this person? Emilio (Mike) Barrera. Mr. Barrera is not only in hot water with the SEC for oil and gas investment fraud, but also is a named defendant in one of our civil investment fraud cases. SEC Complaint
With a criminal background and no significant investment experience, how did Mr. Barrera get 70 investors from 15 states to turn over $7 million for oil and gas investment funds in under two years? He partnered with Dallas radio host, Mark Plummer (and his company Richmond Engineering). Plummer’s radio show attracted investors who he referred to as Barrera. Barrera, operating under Petroleum Resources of Texas, with a few sales employees, parlayed those warm leads into cash, $7 million in cash. SEC News Release
Unfortunately for investors, Plummer and Barrera were running another oil and gas Ponzi investment scheme. You have to hand it to these oil and gas investment fraudsters, they know how to swindle people. People often don’t report Ponzi schemes, as they are embarrassed after falling for the con. It’s really a shame, as even wealthy, sophisticated investors, get caught in the web of investment fraud.
In the case of Barrera and Plummer, their victims primarily listened to the investment advice from Plummer on his show. They liked what they heard and called in to seek oil and gas investment opportunities. Plummer handed the leads to Barrera and friends, and soon the investors were hooked. How? The usual way. Lies.
The Lies
Barrera and Plummer put on a great show. Some might say they exaggerated their resumes, while leaving out pertinent facts. Frankly, they lied about their success and experience. Then they failed to disclose their relationship, failed to register the investments, and failed to disclose their past indiscretions. The two were silent regarding Barrera’s felony charge, just like they were silent about FINRA barring Plummer in 2017 from associating with them and fined him $75,000 for “misusing investor funds and providing false and misleading testimony.” Likewise, they did not mention one of Plummer’s other companies, Texas E&P Operating, Inc., was in bankruptcy. And, of course, they lied on the marketing material, claiming expertise, geological and engineering employees that were non-existent, and boasting of preliminary work they had not performed. SEC Complaint
Misuse of Funds
As it turns out both Barrera and Plummer took millions for their personal benefit. Barrera used investor funds to “pay his bail bonds, pay personal bills and expenses, fund various shopping sprees, pay undisclosed commissions, and payback earlier investors who requested refunds.” SEC Complaint Barrera’s Company, Petroleum Resources, diverted $2.4 million to Mark Plumber’s company, Richmond Engineering. In turn, Mr. Plumber turned investor money into his own piggy bank, spending money on “club memberships, student loans, personal credit card debt, car and mortgage payments, legal fees, and other improper purposes. .. .” SEC Complaint
Barrera had worked as a salesman for Plummer. The new scheme made Barrera’s company the front, while Plummer really ran things. Plummer trained the salespeople, helped prepare the offering documents, and drafted investor updates.
A little investigative work might have spared investors.
- Joint venture. The documents some investors signed claimed the investment was a joint venture and not a securities investment. But none of the qualities of a joint venture were actually present.
- Criminal records. Barrera and Plumber both had criminal records that a database search should have revealed.
- Civil court filings. A search of civil court filings should have revealed Plummer’s bankruptcy, assuming investors knew they were in bed with Plummer.
- Company records. A search of public records might have disclosed that Barrera’s company, Petroleum Resources, didn’t employ enough people to include the engineers and geologists mentioned in the marketing material.
When exploring financial investment opportunities in securities, oil and gas, real estate, or cryptocurrency, do your research. Check the history of the people in the deal, as well as any past or pending lawsuits. Read all documents before signing. Take steps to verify marketing data presented to you.
Contact An Investment Fraud Attorney
We hope all your real estate, cryptocurrency, and oil and gas investments are safe and profitable. But if you find yourself searching for an experienced investment fraud attorney or a commercial litigation lawyer, we are here to help.