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May 14, 09

NEWS / Dallas/Collin County Family Indicted in Oil and Gas Securities Fraud Scheme William Anthony Rand Arr


DALLASóWilliam Anthony Rand, and his three sons, Gregory Keith Rand, William Nicholas Rand, and Mark Albert Rand, along with Joel William Peterson, have been indicted by a federal grand jury in Dallas on various offenses related to their operation of an oil and gas investment fraud scheme, announced Acting U.S. Attorney James T. Jacks of the Northern District of Texas.

William Anthony Rand, a/k/a Tony Rand, 67, was arrested this morning by FBI agents at his home in Plano, Texas. He will appear this afternoon before U.S. Magistrate Judge Paul D. Stickney at 3:00 p.m. for his initial appearance. Gregory Keith Rand, a/k/a Greg Rand, 44, of Dallas; William Nicholas Rand, a/k/a Bill Rand, 39, of Dallas; Mark Albert Rand, a/k/a Mark Rand, 45, of Plano, Texas; and Joel William Petersen, 52, of Frisco, Texas, are expected to surrender to federal authorities on Tuesday, May 12, 2009, and will appear that day before U.S. Magistrate Judge Jeff Kaplan for their initial appearance. The indictment was returned earlier this week and unsealed this morning.

Tony Rand, Greg Rand, Bill Rand, Mark Rand and Joel Petersen are each charged with one count of conspiracy to commit securities fraud, mail fraud and wire fraud; one count of securities fraud; nine counts of mail fraud; one count of mail fraud and aiding and abetting; thirteen counts of wire fraud; and eight counts of money laundering. In addition, Gregory Keith Rand, William Nicholas Rand, and Mark Albert Rand are each charged with engaging in illegal monetary transactions.

According to the indictment, the defendants attempted to raise approximately $56 million from investors.

Greg, Bill, and Mark Rand are officers and directors of Aspen Exploration, Inc., which operated from its office at 2901 Dallas Parkway, Suite 380, in Plano, Texas. Their father, Tony Rand, was the chief financial officer and bookkeeper for Aspen, and Joe Petersen was a vice president and salesman for Aspen. Aspen Exploration was the managing partner of oil and gas well programs offered and sold to investors throughout the U.S. and elsewhere.

The indictment alleges that beginning in December 2005, these five defendants conspired together, and with others, to commit securities fraud, mail fraud, and wire fraud by making false representations to induce investors to buy investment contracts and interests in oil, gas, or other mineral rights in the Aspen Exploration, Inc. - Rancho Blanco State #6 Joint Venture (RB6) and the Rancho Blanco State #7 Joint Venture (RB7) investment programs. The defendants misapplied and converted investor funds from their intended purpose of drilling the wells, to the defendantsí own use, and the use of others, including purchasing real and personal property, financing personal expenditures, and financing drilling, completion, and operation of unrelated wells.

According to the indictment, as part of their scheme, the defendants represented to investors that their invested funds would be used to drill, test, and complete the RB6 and RB7 wells and that Aspen would drill, test, and complete RB7 at no additional cost to investors. The indictment alleges that Aspen was insolvent and relied upon investor funds to operate. Aspen had also failed to pay similar costs for other wells previously sold to investors. The RB7 well has yet to be drilled. The RB6 well is the subject of vendor liens and litigation. Aspen is currently in involuntary bankruptcy in the Southern District of Texas.

Aspen had represented to investors that it would not commingle investor funds with other funds; however, Aspen had commingled and diverted funds from investors in prior investment programs. Vendors had also filed liens and litigation against Aspen and wells they previously sold to investors, yet Aspen represented to investors that it was not the subject of any material legal proceedings and that none were anticipated. Aspen failed to advise investors that it had been forced into involuntary bankruptcy in 2004.

According to the indictment, Greg Rand, Bill Rand, and Mark Rand had significant personal tax liabilities. In fact, there is a motion for summary judgment pending, in case number 3:08cv795B, filed in the Northern District of Texas, seeking to recover an approximate $7 million tax liability from Gregory Keith Rand.

In addition, the defendants failed to disclose that Aspenís chief financial officer, Tony Rand, had been convicted in the Eastern District of Arkansas of bank fraud, money laundering, and interstate transportation of securities by fraud, and had served nearly seven years in federal prison for those convictions.

Regarding the money laundering, the defendants allegedly conducted financial transactions, involving at least $1.3 million, that were designed to conceal and disguise the true, unlawful, nature of the funds. More than $300,000 for instance, was transferred to Golf Pipe & Supply Co., Inc., a company formed in 2006 by defendants Greg Rand, Bill Rand, and Joel Petersen.

An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. However, if convicted, the conspiracy count and the securities fraud count each carry a maximum statutory sentence of five years in prison and a $250,000 fine, per count. The mail fraud and wire fraud counts each carry a maximum statutory sentence of 20 years in prison and a $250,000 fine. Nine of the mail fraud counts, which allege that the defendants victimized ten or more persons over the age of 55, carry an enhanced penalty, which, upon conviction, requires an additional mandatory 10 years in prison. The money laundering count carries a maximum statutory sentence of 20 years in prison and a $500,000 fine. Engaging in illegal monetary transactions carries a maximum statutory sentence of 10 years in prison and a $250,000 fine per count. Restitution could be ordered. If convicted on all counts, each defendant faces a statutory maximum of hundreds of years imprisonment, millions of dollars in fines, and restitution to the victims of their crimes.

The indictment also includes a forfeiture allegation which would require the defendants, upon conviction, to forfeit property derived from the proceeds traceable to their offenses, including cash, a 2006 Sunseek Predator yacht, a residence in Dallas, and several vehicles.

In acknowledging and praising the efforts of the Securities Fraud Task Force, acting U.S. Attorney Jacks recognized the collaborative efforts of the Texas State Securities Board, the U.S. Postal Inspection Service, and the FBI. Assistant U.S. Attorney Christopher Stokes and Special Assistant U.S. Attorney Rhonda Rogers are the prosecuting attorneys.

 




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AnnaMaria Realbuto
Thank you for all your assistance and efficiency...
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Kateryna Melnychenko
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