Dallas man guilty in oil & gas scam

SHERMAN, Texas, Aug. 31 (UPI) -- A Dallas man pleaded guilty Tuesday to his role in an oil-and-gas investment pyramid scam that ripped off 7,700 people for nearly a half billion dollars.

The U.S. attorney's office said in a release Joseph Blimline, 35, pleaded guilty to an information charging him with conspiring to defraud the investors from across the United States out of more than $485 million.

Blimline also pleaded guilty to defrauding investors in a second oil-and-gas scheme in Michigan that involved more than $50 million obtained from investors.

Prosecutors said beginning in September 2006, Blimline and others involved in Provident Royalties made false representations and failed to disclose other material facts to their investors, to get them to invest with Provident. The investors weren't told Blimline had received millions of dollars of unsecured loans, had been previously charged with securities fraud violations by the state of Michigan and that funds from investors in one oil-and-gas project were being used to pay individuals who invested in previous oil and projects.

In the second pyramid scheme, authorities said between November 2003 and December 2005, Blimline and others falsely promised inflated rates of return to obtain payments from investors, which they then used to make payments to previous investors.

Blimline faces up to 20 years in federal prison on each of the two conspiracy charges. No date was set for sentencing.