The U.S. Securities and Exchange Commission has charged Dallas-based Americrude and two of its executives with defrauding 17 investors out of $950,000 in an oil and gas offering scheme.
The SEC claims that 30-year-old Shezad Akbar of Carrollton and 30-year-old Daniel Waite of Garland lied to potential investors about their history of success in drilling wells and their operations.
In a 17-page lawsuit filed in federal court in Dallas, the SEC states that Akbar, who owned Americrude, and Waite, who the SEC describes as the company’s “titular president,” created a boiler room of sales employees who cold called potential investors.
“Americrude, Akbar and Waite generally solicited investors from multiple states and lured them to invest in the fraudulent Americrude enterprise using a combination of high-pressure and deceptive sales pitches and false and misleading offering materials,” the federal complaint states.
“During closing calls, Akbar further misled investors by lying about Americrude’s prior performance and track record, the potential reserves associated with Americrude’s purported prospects, the expected production on the various prospects and, by virtue of that production, the expected returns investors would earn by investing with Americrude,” the federal agency states in his complaint.
The SEC charges that Akbar falsely told potential investors that his name was Tony Ackerman in order to hide his true identity and to cover up prior criminal arrests.
“Cold calls and high-pressure sales tactics are commonly used in offering frauds,” Shamoil Shipchandler, the regional director of the SEC’s Fort Worth operation, said in a written statement. “Investors should always use caution and never be induced to abandon their common sense.”
Efforts to reach Akbar were unsuccessful, as a person answering his cell phone said he is currently incarcerated in the Denton County Jail. Criminal court records show that Shezad Akbar was arrested on Feb. 22 for possession of a controlled substance and is being held on those charges.
The SEC’s lawsuit claims that Americrude brochures claim that the company drilled 515 wells in Oklahoma, had a 98.7 percent success rate and was one of the top 10 operators in Oklahoma for production and active wells.
“All of these representations were false,” the SEC states. “Americrude had never drilled any wells, conducted any oil and gas operations in Oklahoma and been an operator on any wells.”
Akbar told investors in recorded phone calls that Americrude paid out $421 million in revenue to investors during a seven year time period.
“That was a lie, as Americrude had not paid out any money to investors at the time,” the SEC charges.
In the end, Americrude investors were paid $2,500 – or less than one-fourth of one percent of the money they put into the company, according to court records.
Waite, according to federal court documents, has settled his case with the SEC by agreeing to pay disgorgement of ill-gotten gains totaling $32,409.52, prejudgment interest of $1,763.30, and a penalty of $100,000.
The SEC’s investigation was conducted by Christopher Reynolds and Melvin Warren and supervised by Scott F. Mascianica and David Reece. The SEC’s litigation against Americrude and Akbar will be led by Matthew Gulde.