SEC Files Charges in Oil Drilling Investment Scheme
David R. Greenlee, David A. Stewart Jr., and Richard 'Ric' P. Underwood were charged by the SEC and U.S. Attorney’s Office with orchestrating a $15 million securities fraud scheme by luring investors with false promises of 15–55% annual returns from fake oil drilling ventures in Kansas, Oklahoma, and Texas, while diverting nearly two-thirds of funds to pay themselves and salesmen, leading to civil penalties and criminal charges.
The SEC charged David R. Greenlee, David A. Stewart Jr., and Richard 'Ric' P. Underwood with violating federal antifraud securities laws in a $15 million scheme involving fraudulent oil drilling investments in Kansas, Oklahoma, and Texas. The defendants, who were not registered to sell securities, used fake identities and misleading brochures to promise investors annual returns of 15–55%, while diverting nearly 65% of investor funds to pay themselves, sales commissions, and advertising—leaving minimal money for actual oil production. The SEC seeks disgorgement of ill-gotten gains plus interest and penalties, as well as permanent injunctions, while the U.S. Attorney’s Office filed parallel criminal charges against all three.
David R. Greenlee and David A. Stewart Jr., both from Tennessee, along with Florida-based Richard 'Ric' P. Underwood, orchestrated a $15 million securities fraud scheme by falsely promoting oil drilling investments in Kansas, Oklahoma, and Texas as high-yield opportunities offering 15–55% annual returns for decades. The defendants, who were not registered to sell securities, used aliases like 'Dave Johnson' to conceal their criminal histories and employed deceptive brochures and radio ads to lure investors nationwide. Underwood played a key role by drafting fraudulent offering materials and managing a telemarketing boiler room in Fort Lauderdale that solicited investors through cold calls. Nearly two-thirds of the $15 million raised was diverted to pay the defendants, their sales teams, and advertising campaigns, with only minimal funds used to create the illusion of oil production at a few wells. The SEC alleges the scheme was designed to simulate operational activity to deceive investors who visited the sites in person. In parallel, the U.S. Attorney’s Office for the Southern District of Georgia filed criminal charges against all three, while the SEC seeks disgorgement of ill-gotten gains, interest, penalties, and permanent injunctions. The investigation, supported by the U.S. Secret Service, remains ongoing, and the SEC continues to warn investors to verify the registration status of investment sellers via investor.gov.
Exhibits & Attached Documents (2)
Extracted insights
- $15.00M $15 million $10M–$100M
- scheme_term boiler room sales team of telemarketers in florida
- agency Securities and Exchange Commission
- Securities and Exchange Commission charged Two Tennessee Men And An Accomplice In Fort Lauderdale
- David R. Greenlee And David A. Stewart Jr. orchestrated $15 Million Scheme
- Greenlee And Stewart diverted Nearly Two-Thirds Of The Money Raised From Investors
- Richard "Ric" P. Underwood helped Greenlee And Stewart Draft False Offering Brochures
- Richard "Ric" P. Underwood oversaw Boiler Room Sales Team Of Telemarketers In Florida
- U.S. Attorney’s Office For The Southern District Of Georgia announced Criminal Charges Against Greenlee, Stewart, And Underwood
- Securities and Exchange Commission seeks Disgorgement Of Ill-Gotten Gains Plus Interest And Penalties And Injunctions
The Securities and Exchange Commission today charged two Tennessee men and an accomplice in Fort Lauderdale with allegedly defrauding investors they lured by false promises of high returns from an oil drilling investment opportunity. According to the SEC’s complaint filed in federal court in Savannah, Georgia, David R. Greenlee and David A. Stewart Jr. orchestrated the $15 million scheme by recruiting and controlling a network of salesmen who offered and sold investors a stake in various companies purportedly using enhanced oil recovery techniques like fracking to extract and sell oil from wells in Kansas, Oklahoma, and Texas. Investors were allegedly promised profits of 15 to 55 percent per year for decades. The SEC alleges that Greenlee and Stewart weren’t registered to sell investments and used fake names like “Dave Johnson” when speaking to investors in order to hide their past criminal records, and they diverted nearly two-thirds of the money raised from investors to pay themselves and their salesmen as well as advertise for new investors. According to the SEC’s complaint, minimal funds were used for oil production at just a few of the wells in order to create the appearance of oil production and dupe investors who wanted to see activity in-person. The SEC’s complaint further alleges that Richard “Ric” P. Underwood helped Greenlee and Stewart draft false offering brochures, and he oversaw a boiler room sales team of telemarketers in Florida as they solicited investors nationwide. “As alleged in our complaint, misleading brochures and radio advertisements lured investors into believing they could strike it rich by investing in these oil drilling opportunities. Unbeknownst to the investors, most of their money was being used for other purposes,” said Walter Jospin, Director of the SEC’s Atlanta Regional Office. The SEC has previously alerted investors about the risks and possible fraudulent activity involved in private offerings of securities for oil-and-gas ventures. The SEC also encourages investors to check the backgrounds of people selling investments by using the SEC’s investor.gov website to quickly identify whether they are registered professionals and confirm their identity. In a parallel action, the U.S. Attorney’s Office for the Southern District of Georgia today announced criminal charges against Greenlee, Stewart, and Underwood. The SEC’s complaint charges Greenlee, Stewart, and Underwood with violations of the antifraud provisions of the federal securities laws. The SEC seeks the disgorgement of ill-gotten gains plus interest and penalties as well as injunctions. The SEC’s continuing investigation has been conducted by Brian M. Basinger with assistance from Lauren B. Poper, and the case is being supervised by Aaron W. Lipson and Stephen E. Donahue. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of Georgia and the U.S. Secret Service.
The Securities and Exchange Commission today charged two Tennessee men and an accomplice in Fort Lauderdale with allegedly defrauding investors they lured by false promises of high returns from an oil drilling investment opportunity. According to the SEC’s complaint filed in federal court in Savannah, Georgia, David R. Greenlee and David A. Stewart Jr. orchestrated the $15 million scheme by recruiting and controlling a network of salesmen who offered and sold investors a stake in various companies purportedly using enhanced oil recovery techniques like fracking to extract and sell oil from wells in Kansas, Oklahoma, and Texas. Investors were allegedly promised profits of 15 to 55 percent per year for decades. The SEC alleges that Greenlee and Stewart weren’t registered to sell investments and used fake names like “Dave Johnson” when speaking to investors in order to hide their past criminal records, and they diverted nearly two-thirds of the money raised from investors to pay themselves and their salesmen as well as advertise for new investors. According to the SEC’s complaint, minimal funds were used for oil production at just a few of the wells in order to create the appearance of oil production and dupe investors who wanted to see activity in-person. The SEC’s complaint further alleges that Richard “Ric” P. Underwood helped Greenlee and Stewart draft false offering brochures, and he oversaw a boiler room sales team of telemarketers in Florida as they solicited investors nationwide. “As alleged in our complaint, misleading brochures and radio advertisements lured investors into believing they could strike it rich by investing in these oil drilling opportunities. Unbeknownst to the investors, most of their money was being used for other purposes,” said Walter Jospin, Director of the SEC’s Atlanta Regional Office. The SEC has previously alerted investors about the risks and possible fraudulent activity involved in private offerings of securities for oil-and-gas ventures. The SEC also encourages investors to check the backgrounds of people selling investments by using the SEC’s investor.gov website to quickly identify whether they are registered professionals and confirm their identity. In a parallel action, the U.S. Attorney’s Office for the Southern District of Georgia today announced criminal charges against Greenlee, Stewart, and Underwood. The SEC’s complaint charges Greenlee, Stewart, and Underwood with violations of the antifraud provisions of the federal securities laws. The SEC seeks the disgorgement of ill-gotten gains plus interest and penalties as well as injunctions. The SEC’s continuing investigation has been conducted by Brian M. Basinger with assistance from Lauren B. Poper, and the case is being supervised by Aaron W. Lipson and Stephen E. Donahue. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of Georgia and the U.S. Secret Service.