Scams
An Oil-Well Scam Drained Our Savings
Peggy and Sam Niblett were victims of a Ponzi scheme that cost hundreds of investors more than $65 million. -- As told to Jessica Anderson
From Kiplinger's Personal Finance magazine, June 2009
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| The Nibletts mortgaged and paid off their potato farm three times, then lost the sale proceeds to a criminal. |
Why did you get involved in the deal? Around the time we were getting ready to sell our farm, we got a phone call pitching a company that invested in developing oil and gas wells. The projects promised monthly returns, which we thought would help with our medical expenses. Peggy had been diagnosed with leukemia a few years earlier.
How did the company persuade you it was legitimate? They gave us a list of other people who were taking part. We called them, and they all said it was wonderful. And the company appeared very professional in its presentations.
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How much money did you invest? Being conservative New Englanders, we got in slowly. Our first investment was $15,000, in a small project in 1997. We continued to invest in larger and larger projects over the next seven years. All told, we invested $593,000 and lost more than $332,000.
When did you realize something was wrong? We were in Texas awaiting a stem-cell transplant for Peggy in 2005 when a check the company sent us bounced. The company, which was headed by a man named Ulric Sweesy, sent us a good check when we called them; but the next check bounced as well, and no more checks ever arrived.
Have you seen any justice? We were finally connected to the Texas State Securities Board and helped them build a case against Sweesy. He was eventually arrested in Las Vegas and sentenced in 2008 to 20 years in prison for committing fraud. He was a thief, pure and simple. Besides the emotional toll it took on us, we felt guilty because Sam got his mother and cousin to invest. They lost nearly $200,000.
Could you have done anything differently? We thought we were betting on gas and oil prices, which we were convinced would climb. What we were really betting on was this man's character. We tried to prepare. We did the best we could.
How are you doing financially? We're very grateful to have terrific insurance, which covers Peggy's cancer treatments. So we've been able to keep our heads above water.
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Reader Comments (6)
Posted by: Ken Perkins at 05/25/2009 01:23:41 PM
My parents were also victims of the oil-well Ponzi scheme perpetrated by Sweesy & his cohorts. Like other victims of this scam they were promised a low risk oil & gas investment with guaranteed returns and tax benefits. What they got was a Christmas ham, a small vial of crude oil from the non-existant oil well, and a total loss of their investment. My parents had recently sold their house when my father agreed to purchase the oil & gas investment that was part of the Sweesy con scheme. Sadly, he passed away shortly after agreeing to this purchase and my mother was then immediately pressured to complete the purchase. Within months the Ponzi scheme shut down. What is often missed in the reporting of these con schemes is the secondary salespeople who make the sale. It is here that the real damage is done to those who are vulnerable. Sweesy's conviction puts an end to his ability to generate another con scheme but the rest of his con scheme has so far escaped the justice system unscathed.
Posted by: Tony Brown at 09/23/2009 10:34:12 PM
I don't know If I said it already but ...Excellent site, keep up the good work. I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say I'm glad I found you... Thanks, :) A definite great read..Tony Brown
Posted by: Wendy Shiflett at 10/30/2009 01:05:16 PM
...Justice seems slow, but all of the investors hope to see justice done very soon. These men prey on innocent people and seem to have no conscience.
Posted by: Dave at 01/22/2010 10:34:37 PM
I was also of victim of Sweesy and his con men. I lost approximately $100,000 which was primarily meant to be my three children's college education money. Now that my children are college age this loss has been very difficult. The amazing thing is that I thought I was being very dilligent and conservative when I decided to invest. Oil and gas prices were low and hadn't yet started to rise, so I reasoned it would be a good time to invest in the sector. I talked with the Texas Railroad Commission, which is the primary regulating body for oil and gas in the state of Texas, and they had nothing but good reports on Prairie Resources, which was one of Sweesy's companies. I personally talked with five referrals that Prairie gave to me. They were all very satisfied. One of the referrals was a petroleum geologists for a major oil company. To this day I believe these were all real investors that were getting duped early on by Sweesy. They were receiving regular checks in the mail and every well was successful, so it was very easy for them to be upbeat regarding the credibility of Prairie Resources. The oil and gas reports and survey maps they sent me were very detailed and professional. They sent consistently regular updates...everything you would expect from a well run company. It's difficult to understand why people who have enough smarts and savvy to make a lot of money legitimately elect to hurt...people with dishonest schemes. But, as one who has been conned, I advise all to do your homework to the extreme before investing money with anyone. I've learned the hard way that there are many slick and sophisticated con men who get there jollies from ripping people off ...and it's incredible how convincing they can be. Remember all those age old adages before parting with your money: 1) If it sounds too good to be true then it is probably a con; 2) diversify, don't be tempted to get rich in one roll of the dice, the diversified tortoise is more likely to have the more secure fulfilling life; 3) don't be in a hurry, do extreme due dilligence before investing. The con men always want to hurry your decision, making you think that if you don't act immediately your once in lifetime chance will be gone tomorrow....
Posted by: KJ at 01/27/2010 11:00:49 PM
Did Sweesy or his company ever buy any oil and gas assets are was it a complete ponzi? In some ponzi situations, investors have remedies that include takeover of oil and gas leases.
Posted by: Wendy at 04/13/2010 06:46:39 PM
Dave - do you remember the name of the geologist you spoke with as a referral for Sweesy? I'm very curious to find out who that may have been...Let's continue to be diligent and expose these con men for who they are. Sweesy will not be out of prison for a very long time...