LAS VEGAS (KSNV MyNews3.com) — In this Rip-Off Alert from Kentucky, the con artists knew exactly how to outsmart their victims to the tune of $36 million.
Gary Milby pitched his company — Mid-America Oil and Gas — to potential investors. He provided a detailed prospectus, as well as what seemed like a strong argument on why investors should trust him.
“I’ve been very blessed. The good Lord has taken care of me well. I make a lot of money, and have a lot of fun,” he said. “We guarantee production. These wells that I’m offering you folks today are going to last longer than I’m going to live.”
Lawyer Robert Buchner had invested in similar projects with other companies, and invested with Milby.
“He basically guaranteed the wells would be productive and investors would make money,” Buechner said.
Buechner was intrigued and did his due diligence, including visiting the oil wells to see them first-hand. He witnessed oil gushing out of the wells and was impressed.
Milby “would say, ‘Oh my gosh! This is going to be 60 barrels a day,’ ” Buechner said. “ ‘This looks like a real winner … 90 barrels a day.’ ”
The truth is it was all a show.
“What we find is that they pumped that oil in and staged it for the investors to make an impression on them,” said U.S. Postal Inspector Robert Bottoms. “Postal inspectors say the presentations and the demonstration at the oil wells were all part of a scam. It’s another tactic they used to try and make people make a decision quickly and it plays on the investors’ emotions.”
Milby, along with attorney Brian Coffman, lured more than 260 victims into this scam. Total losses totaled more than $36 million.
“Brian Coffman was the wizard in ‘The Wizard of Oz’ movie; you pull back the curtain, and he was the one always pulling the strings,” Bottoms said.
Inspectors found Coffman was depositing investors’ funds into accounts he and his family controlled. The money bought condos and luxury items.
“He bought a yacht that was named For Your Eyes Only – this yacht was purchased with investors funds and valued at $1.5 million,” Bottoms said.
The scam began to unravel when investors starting asking questions about their statements.
“The big problem was we were not getting the money we were promised,” Buechner said.
Buechner says he did everything he could to research the investment. The problem was the con artists in this case outsmarted the victims.
“This isn’t a case of inadequate due diligence done,” Buechner said. “The due diligence was flawed because you didn’t get the right answers. I don’t know how you get right answers, when you ask the right questions when people purposely give you the wrong answers.”
Coffman and Milby were charged with eight counts of mail fraud and nine counts of wire fraud. Milby was sentenced to 20 years in prison, and Coffman received 25.