SEC accuses three Texans of scamming investors in $91 million Ponzi scheme

Three individuals from the Dallas-Fort Worth area, specifically Kenneth W. Alexander II, Robert D. Welsh, and Trudy L. Welsh, have been charged by the Securities and Exchange Commission. The charges, announced recently, accuse the trio of engaging in a fraudulent oil and gas offering scheme.

According to the SEC, Alexander, Robert Welsh, and Trudy Welsh allegedly defrauded investors by making false statements and misleading claims. The defendants reportedly lied about the use of investor funds, claiming they would be used to drill and complete oil and gas wells. Instead, the SEC claims that the funds were misappropriated for personal use and to make Ponzi-like payments to earlier investors.

The complaint filed by the SEC accuses Alexander, Robert Welsh, and Trudy Welsh of violating antifraud provisions of federal securities laws. The complaint also alleges that Trudy Welsh acted as an unregistered broker-dealer, further violating securities regulations.

The charges stem from an oil and gas offering known as the “Tyche Energy Program.” The SEC alleges that investors were promised high returns on their investments, with claims that the program would generate significant profits. However, the SEC argues that these promises were false, and investors were ultimately defrauded.

In a parallel action, the U.S. Attorney’s Office for the Northern District of Texas has also filed criminal charges against Alexander, Robert Welsh, and Trudy Welsh. The criminal charges include conspiracy to commit mail and wire fraud, as well as substantive counts of mail fraud and wire fraud.

In response to the charges, Alexander, Robert Welsh, and Trudy Welsh have agreed to settle the SEC’s charges without admitting or denying the allegations. The settlement includes permanent injunctions against future violations of securities laws, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.

The SEC’s enforcement actions in cases like this serve to protect investors and maintain the integrity of the securities markets. By holding individuals accountable for fraudulent behavior, the SEC aims to deter others from engaging in similar misconduct.

Investors are encouraged to conduct thorough due diligence and research before investing in any opportunity, particularly in the oil and gas sector where scams and fraudulent schemes are not uncommon. By being cautious and skeptical of promises that seem too good to be true, investors can help protect themselves from falling victim to financial fraud.