Federal authorities charged a Texas man with fraud and obstruction of justice in an indictment unsealed Friday involving two investment companies that allegedly defrauded investors resulting in losses of about $900,000.
Stanley Jonathan Fortenberry, 50, of San Angelo, was charged with three counts of mail fraud, two counts of wire fraud and one count of obstructing an official proceeding. Fortenberry was arrested this morning and made his initial appearance in court this afternoon.
Here are the facts and circumstances surrounding this case, according to the indictment:
- From 2013 to 2014, Fortenberry ran Wattenberg Energy Partners, which raised funds for oil and gas drilling projects in northern Colorado.
- Fortenberry allegedly set up the company in his son’s name because Texas and Pennsylvania state securities regulators had previously ordered Fortenberry to not sell unregistered securities in oil drilling projects.
- Fortenberry used a network of salespeople to call and solicit individuals to invest in drilling projects.
- Rather than designate investors’ funds for drilling projects as promised, Fortenberry spent the vast majority of the funds on himself and the company’s fundraising operation.
- In order to make Wattenberg more appealing to investors, Fortenberry misled investors into believing that Wattenberg had substantive control over the drilling projects when, in reality, Wattenberg was merely a fundraising operation that passed along funds to other companies that actually had control.
- From 2010 to 2012, Fortenberry also allegedly ran a separate fraudulent scheme conducted through Premier Investment Fund.
- Through Premier, Fortenberry raised funds from investors for social media projects run by another company connected to the country music industry.
- Fortenberry misrepresented to investors the profitability of the company and how he would be compensated.
- The company earned no profits and Fortenberry spent approximately half of the funds raised on himself, according to the indictment.
In total, the indictment alleges that Fortenberry defrauded investors out of about $900,000 through both companies.
In October 2014, Fortenberry allegedly gave false and misleading testimony in an administrative proceeding before the U.S. Securities and Exchange Commission, which was investigating Fortenberry at the time for misusing funds that investors had entrusted to Premier.
The defendant is presumed innocent unless proven guilty.
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