Texas Securities Fraud: Investors Bilked $68M Dallas Ponzi Scam Hoping To Recover Funds Via Rare Guitar Auction

One year after The Rand Family pled guilty to bilking over 200 investors in $68M Dallas Ponzi scam, a number of their expensive instruments are going up for auction. The money from the sales will go towards paying back their victims.

The Rand Family, who owned oil and gas owned Aspen Exploration, scammed investors into financing the operation and drilling of a number of Texas oil wells. At least a 40% return was promised. However, not all of the investors’ monies went to drilling oil. Instead, US Postal investigators discovered that the family was using some of the funds to pay for their expensive lifestyle, which included private jets, yachts, country club membership, and the purchase of real estate, jewelry, musical instruments, and an original Picasso.

Their company, Aspen, sold net revenue interests and working interests in a number of wells in the Rancho Blanco Corporation State Gas Unit in Texas. Prosecutors accused the Rands of making false representations, such as telling them that their money, which would only be commingled when necessary, would go toward testing, drilling, and completion of a well and that they would managerial rights. Instead, the money was moved out of Aspen’s bank accounts as the defendants spent it on personal expenses and to drill and pay for the operation of other wells.

The Rands’ guilty plea agreements for their Texas securities fraud:

William Anthony “Tony” Rand: One count of securities fraud, one count of conspiracy to commit mail fraud.

Greg Rand: Three counts of securities fraud, one county of conspiracy to commit mail fraud.

Bill Rand: Three counts of securities fraud
Mark Rand: Fraud

(Joel Peterson: One count of securities fraud, one count of conspiracy to commit mail fraud. Peterson worked at Aspen in sales.)

Prosecutors claim that Aspen neglected to tell investors that Tony Rand, who was the financial manager of the company, had served time behind bars for securities fraud in the past.

In a separate oil and gas scam, yet another son, Wayne Anthony Rand, pleaded guilty to theft. In that financial scheme, $8M was raised from victims for Black Lake Energy Inc./Rock Wall Oil Co. Also, last month, a fifth son, Jeff Rand, was sentenced to 57 years behind bars for defrauding investors of $7.9 million for another oil and gas scheme.

The auction of the Rand Family’s instruments is scheduled for this weekend. Among the pieces being offered are 1959 Gibson Les Paul Sunburst Left-handed guitar and a 1960 Les Paul, also left-handed, (Only two others were ever made. One is lost and the other belongs to singer Paul McCartney. Also up for offers are two other left handed guitars: a 1965 Strat Sunburst and a 1959 Fender Stratocaster Hardtail.

Rare Guitars Seized In Dallas Ponzi Scheme To Go Up For Auction, Forbes, October 22, 2012

Family members plead guilty in oil and gas scam, Dallas News, January 26, 2011

JEFF RAND SENTENCED TO 57 MONTHS IN PRISON FOR DEFRAUDING INVESTORS OF $7.9 MILLION, US Department of Justice, August 27, 2012

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Texas Securities Fraud: Investor Sues Behringer Harvard REIT I, Stockbroker Fraud Blog, September 26, 2012

Institutional Investment Fraud Roundup: Ex-Analyst Guilty in $61.8M Insider Trading Scheme, SLUSA Precludes Investor Class Action Over Hedge Funds that Failed After Madoff Ponzi, & Dark Pool Operator Settles Subscriber Info. Breach Charges, Institutional Investor Securities Blog, October 18, 2012