Open Accessibility Menu

Dallas Businessman Sentenced to Prison Over Oil and Gas Ponzi Scheme

David P. Meyer

Alan Todd May, founder and president of Prosper Oil & Gas, Inc., was sentenced to 20 years in prison earlier this month for defrauding more than 170 investors out of approximately $7 million in an oil and gas Ponzi scheme.

According to court documents, from July 2008 to March 2010, May purposely made false and misleading statements to potential investors in order to fraudulently obtain millions of dollars in investments that he said would go toward the purchase of royalty interests in oil and gas leases. May’s company purportedly owned and operated oil and gas leases in various states across the country, including Texas, Oklahoma, Colorado and Arkansas.

May told investors the royalties would yield annual returns of more than 25 percent. According to the DOJ, however, May’s claims were patently false. In reality, he was selling mineral interests his company didn’t own, “wildly overstating the production revenue for Prosper’s leases,” and making Ponzi-style payments to earlier investors in order to perpetuate the scheme.

In his plea, May admitted that he used investor funds for his personal purposes and to make payments to various family members. He pled guilty to one count of mail fraud in connection to the investment fraud scheme in Dec. 2010, six months after he was arrested in San Francisco on related federal. May has been in federal custody since his arrest.