A 35 year old Dallas man pleaded guilty on Tuesday to his part in a $485 million oil-and-gas scheme fraud where he duped 7,700 investors throughout U.S.

Joseph Blimline was also found guilty for a second oil-and-gas scheme fraud in state of Michigan that robbed investors $50 million. The second fraud took place between 2003 – 2005, and beginning 2006 Blimline and others involved at Provident Royalties ran a Ponzi scheme on what was the largest oil-and-gas investment scheme in North Dallas.

Blimline and others involved at Provident Royalties made false representations and failed to tell to investors about the Ponzi scheme and Blimline’s past issues with securities regulators and other material issues. The money from the Ponzi scheme was used to pay back money to investors from a previous scheme

In July 2009, the Securities and Exchange Commission filed lawsuit against Provident Royalties, company that was at the core of the scheme for alleged diversion of the funds received from investors to pay back for previous investors in a Ponzi scheme.

U.S. Attorney Bales spoke of the nature of the fraud, “Investment fraud is, at its core, a betrayal of trust by one person to another. We will be relentless in our pursuit of those individuals responsible for abusing the trust of others in order to obtain criminal profits.”

Blimline faces up to 20 years in Federal Prison although no date has been set for sentencing.

Source: US Department of Justice