Press Release: SEC Sues Oil and Gas Promoters, Issues Investor Alert; 2006-149; Sept. 5, 2006
The SEC charged Ivan Dearaujo and Wesley Harbison with defrauding at least 70 investors of $2.2 million through false oil and gas investment schemes via PetroSite Assets, Inc., and an additional $250,000 via fraudulent stock sales in the inactive Masset, Inc., misrepresenting ownership, production, and financial prospects, with Dearaujo diverting funds for personal use and Harbison acting as an unregistered broker, leading the SEC to seek injunctions, disgorgement, penalties, and a receiver to recover assets.
The SEC charged Ivan Dearaujo and Wesley Harbison with securities fraud for raising $2.2 million from at least 70 investors by falsely claiming ownership of oil and gas wells and overstating production forecasts through PetroSite Assets, Inc., while also defrauding $250,000 via deceptive sales of stock in the inactive jewelry company Masset, Inc. Dearaujo misappropriated both initial investor funds and ongoing well revenues for personal use, while Harbison knowingly participated in the misrepresentations and acted as an unregistered securities broker, earning commissions on the fraudulent sales. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties, penny stock bars, and the appointment of a receiver to preserve and recover assets for victims.
The SEC filed fraud charges against Ivan Dearaujo and Wesley Harbison for orchestrating a scheme that defrauded at least 70 investors of $2.2 million between August 2002 and July 2005 through the sale of participation interests in non-existent or misrepresented oil and gas wells via PetroSite Assets, Inc. Dearaujo, the principal of PetroSite, falsely claimed ownership of wells, exaggerated production projections, and diverted both initial investor capital and subsequent revenue for personal use, while Harbison, a salesperson, knowingly participated in the deception and earned commissions without being registered as a broker. In a separate but related fraud, the pair raised an additional $250,000 between June and December 2005 by falsely promoting stock in Masset, Inc., an inactive jewelry business, misrepresenting its financial stability and future value. The SEC alleges Dearaujo’s conduct included ongoing misappropriation of funds, not just initial fraud, and that Harbison’s role extended beyond sales to active complicity in the misrepresentations. Dearaujo is currently incarcerated in California on unrelated charges, while Harbison resides in Oregon. The SEC is seeking permanent injunctions, disgorgement of all ill-gotten gains with prejudgment interest, civil monetary penalties, penny stock bars against both defendants, and the appointment of a receiver to take control of PetroSite’s and Masset’s assets to preserve them for investor recovery. The Commission also issued an investor alert to warn the public about oil and gas scams exploiting fears of rising energy prices, emphasizing the complexity and speculative nature of such investments that unscrupulous promoters exploit.
Extracted insights
- $2.20M $2.2 million $1M–$10M
- $250K $250,000 $100K–$1M
- company $250,000 through sales of stock in masset, inc.
- company appointment of receiver for petrosite assets, inc. and masset, inc.
- location California
- person fraud charges
- person ivan dearaujo
- person masset stock fraud
- location oregon
- company petrosite assets, inc.
- agency registration with sec
- agency Securities and Exchange Commission
- SEC filed fraud charges against Ivan Dearaujo and Wesley A. Harbison, Jr.
- Ivan Dearaujo and Wesley A. Harbison, Jr. fraudulently raised $2.2 million
- Ivan Dearaujo is principal of PetroSite Assets, Inc.
- Wesley A. Harbison, Jr. is salesperson for PetroSite Assets, Inc.
- Ivan Dearaujo and Wesley A. Harbison, Jr. sold participation interests in future production revenue of oil and gas wells
- Ivan Dearaujo and Wesley A. Harbison, Jr. misrepresented PetroSite's ownership of wells and well production
- Ivan Dearaujo and Wesley A. Harbison, Jr. defrauded at least 70 investors nationwide
- Ivan Dearaujo and Wesley A. Harbison, Jr. fraudulently raised $250,000 through sales of stock in Masset, Inc.
- Ivan Dearaujo and Wesley A. Harbison, Jr. misrepresented Masset's business prospects and financial stability
- SEC is seeking permanent injunction and disgorgement against defendants
- SEC is seeking appointment of receiver for PetroSite Assets, Inc. and Masset, Inc.
- Wesley A. Harbison, Jr. acted as securities broker without registration with SEC
- Ivan Dearaujo is currently incarcerated in California
- Wesley A. Harbison, Jr. is resident of Oregon
- Fraud charges occurred between August 2002 and July 2005
- Masset stock fraud occurred between June and December 2005
SEC Sues Oil and Gas Promoters, Issues Investor Alert Commission Seeks Return of Ill-Gotten Gains and Appointment of Receiver FOR IMMEDIATE RELEASE 2006-149 Washington, D.C., Sept. 5, 2006 - The Securities and Exchange Commission today filed fraud charges against two securities promoters who fraudulently raised $2.2 million through sales of oil and leases to at least 70 investors nationwide. In announcing the charges, the SEC also issued an investor alert available at http://www.sec.gov/investor/pubs/oilgasscams.htm warning investors to beware of solicitations that prey on fears of higher oil and gas prices. The Commission alleges that between August 2002 and July 2005, Ivan Dearaujo, the principal of California-based PetroSite Assets, Inc., and the company's salesperson, Wesley A. Harbison, Jr., sold participation interests in the future production revenue of oil and gas wells. Dearaujo and Harbison misrepresented PetroSite's ownership of wells and overstated the anticipated well production, according to the Commissions complaint, and kept a yet-undetermined amount of the money for themselves. "Rising fuel prices make investors across the nation particularly susceptible to oil and gas scams," said Katherine Addleman, Associate District Administrator for Enforcement in the Commission's Fort Worth Office. "Investors are led to believe that it will be easy to profit from an oil and gas venture. However, oil and gas investments are highly speculative and complex and many unscrupulous individuals use that complexity to enrich themselves with the investors' funds." Rose Romero, District Administrator of the Fort Worth Office, said, "The actions taken today by the Commission, including seeking a receiver to assume control of the companies and the oil and gas interests, not only call for sanctions against those who victimized investors but also will help to redress the harm to these investors. In addition, our actions should serve as a warning to investors of the existence of this threat in connection with oil and gas offerings." The Commission alleges that Dearaujo defrauded the PetroSite investors at the time of the initial investment by misappropriating a substantial portion of their funds, instead of investing the money in the wells. The Commission further alleges that Dearaujo defrauded the PetroSite investors as the business progressed by diverting for his own benefit much of the revenue generated by the wells. Harbison, according to the complaint, was paid a commission on his sales of the PetroSite participation interests, and participated knowingly in Dearaujo's misrepresentation of those interests. The Commission also filed fraud charges Dearaujo and Harbison for fraudulently raising $250,000 between June and December, 2005, through sales of stock in an inactive jewelry business, Masset, Inc., another California-based issuer. The Commission alleges that Dearaujo and Harbison defrauded the Masset investors by misrepresenting Masset's business prospects and financial stability and by exaggerating, without basis, the likely future value of Masset stock. In its complaint, the Commission charges PetroSite, Masset, Dearujo and Harbison with violations of the antifraud provisions of the securities laws. The Commission is also charging Harbison with acting as a securities broker without having been registered with the Commission. The Commission is seeking against each of the defendants a permanent injunction, disgorgement plus prejudgment interest and a civil money penalty, and penny stock bars against Dearaujo and Harbison. The Commission is also seeking against each of the defendants orders requiring an accounting and prohibiting the destruction of records, and, with respect to PetroSite and Masset, the appointment of a receiver to marshal and conserve PetroSite's and Masset's assets for the benefit of the investors. Deauaju is currently incarcerated in California on unrelated charges. Harbison is a resident of Oregon. # # # For further information, contact: Kit Addleman (817) 978-6425 Rose Romero (817) 900-2623 Jeff Cohen (817) 978-6480 SEC Fort Worth District Office Additional materials: Litigation Release 19820 http://www.sec.gov/news/press/2006/2006-149.htm Home | Previous Page Modified: 09/05/2006
SEC Sues Oil and Gas Promoters, Issues Investor Alert Commission Seeks Return of Ill-Gotten Gains and Appointment of Receiver FOR IMMEDIATE RELEASE 2006-149 Washington, D.C., Sept. 5, 2006 - The Securities and Exchange Commission today filed fraud charges against two securities promoters who fraudulently raised $2.2 million through sales of oil and leases to at least 70 investors nationwide. In announcing the charges, the SEC also issued an investor alert available at http://www.sec.gov/investor/pubs/oilgasscams.htm warning investors to beware of solicitations that prey on fears of higher oil and gas prices. The Commission alleges that between August 2002 and July 2005, Ivan Dearaujo, the principal of California-based PetroSite Assets, Inc., and the company's salesperson, Wesley A. Harbison, Jr., sold participation interests in the future production revenue of oil and gas wells. Dearaujo and Harbison misrepresented PetroSite's ownership of wells and overstated the anticipated well production, according to the Commissions complaint, and kept a yet-undetermined amount of the money for themselves. "Rising fuel prices make investors across the nation particularly susceptible to oil and gas scams," said Katherine Addleman, Associate District Administrator for Enforcement in the Commission's Fort Worth Office. "Investors are led to believe that it will be easy to profit from an oil and gas venture. However, oil and gas investments are highly speculative and complex and many unscrupulous individuals use that complexity to enrich themselves with the investors' funds." Rose Romero, District Administrator of the Fort Worth Office, said, "The actions taken today by the Commission, including seeking a receiver to assume control of the companies and the oil and gas interests, not only call for sanctions against those who victimized investors but also will help to redress the harm to these investors. In addition, our actions should serve as a warning to investors of the existence of this threat in connection with oil and gas offerings." The Commission alleges that Dearaujo defrauded the PetroSite investors at the time of the initial investment by misappropriating a substantial portion of their funds, instead of investing the money in the wells. The Commission further alleges that Dearaujo defrauded the PetroSite investors as the business progressed by diverting for his own benefit much of the revenue generated by the wells. Harbison, according to the complaint, was paid a commission on his sales of the PetroSite participation interests, and participated knowingly in Dearaujo's misrepresentation of those interests. The Commission also filed fraud charges Dearaujo and Harbison for fraudulently raising $250,000 between June and December, 2005, through sales of stock in an inactive jewelry business, Masset, Inc., another California-based issuer. The Commission alleges that Dearaujo and Harbison defrauded the Masset investors by misrepresenting Masset's business prospects and financial stability and by exaggerating, without basis, the likely future value of Masset stock. In its complaint, the Commission charges PetroSite, Masset, Dearujo and Harbison with violations of the antifraud provisions of the securities laws. The Commission is also charging Harbison with acting as a securities broker without having been registered with the Commission. The Commission is seeking against each of the defendants a permanent injunction, disgorgement plus prejudgment interest and a civil money penalty, and penny stock bars against Dearaujo and Harbison. The Commission is also seeking against each of the defendants orders requiring an accounting and prohibiting the destruction of records, and, with respect to PetroSite and Masset, the appointment of a receiver to marshal and conserve PetroSite's and Masset's assets for the benefit of the investors. Deauaju is currently incarcerated in California on unrelated charges. Harbison is a resident of Oregon. # # # For further information, contact: Kit Addleman (817) 978-6425 Rose Romero (817) 900-2623 Jeff Cohen (817) 978-6480 SEC Fort Worth District Office Additional materials: Litigation Release 19820 http://www.sec.gov/news/press/2006/2006-149.htm Home | Previous Page Modified: 09/05/2006