A Fort Worth man pleaded guilty Wednesday in federal court to one count of wire fraud after conning 45 people using an oil and gas Ponzi scheme, the U.S. attorney’s office said.
Jeffrey Watts defrauded investors out of about $5.8 million from 2011 though 2013.
Watts told investors that his company, Blue Alpha Energy, invested in oil and gas wells in Texas that were owned and/or operated by Arrowhead Productions, according to the news release. Arrowhead is legitimate company in Fort Worth.
He used Blue Alpha Energy and a group of “related sham entities” to lead people to believe they were investing in oil and gas wells owned by Arrowhead, the news release stated.
“To further the scheme, Watts made monthly payments to investors in Blue Alpha Energy, using investor funds transferred between bank account of the sham entities he controlled,” the release stated.
In December 2013, several investors realized that “Watts never had investment agreements with Arrowhead Productions and, in fact, funneled the investor funds into the sham business entities he controlled.”
Watts is facing 20 years in prison, a $250,000 fine and restitution. His sentencing has been set for Dec. 9.
The case was part of a national effort by the Financial Fraud Enforcement Task Force created in 2009.