By Jennifer Loren, The News On 6
TULSA, OK -- Wall Street fraud hits Tulsa in a $41 million fraud indictment. Five men are accused of a pump and dump scheme, including one Tulsa attorney and one Tulsa businessman. Investigators say the men tricked hundreds, possibly thousands of investors, into buying their stocks and then left them high and dry.
"It's built on greed and avarice and ripped off legitimate investors nationwide and the defendants in this case reaped over $41 million in illegal profits," said U.S. Attorney David O'Meilia.
U.S. Attorney David O'Meilia and a handful of federal investigators presented the results of an investigation that's been ongoing for several years.
They say five men were indicted as a result including two Tulsa men who were arrested Tuesday: attorney George David Gordon and businessman Richard (Rick) Clark.
"This scheme is known as a pump and dump scheme. They manipulated publicly traded companies," said U.S. Attorney David O'Meilia.
On a very basic level, they say the defendants bought stocks in their publicly traded companies, inflated the price and value of them and then marketed that stock to other investors as an up and coming market.
They say they did this through a series of hyped up e-mails and faxes.
"The e-mail blasts that I spoke of and the fax blasts went out nationwide to investors," said U.S. Attorney David O'Meilia.
People invested their money and then, when the stock reached an artificially high level, the people who started the scheme sold their stock at that inflated price, making millions of dollars. Of course, all of the other investors were left with a pile of worthless stocks.
"When you've got investors that are putting their personal hard earned cash and savings into what they believe is a legitimate stock and it turns out that there was scheme behind it that cost them money and cost them that then certainly that is serious to every one of those persons," said U.S. Attorney David O'Meilia.
Two of the companies that were used in the scheme are Tulsa companies: Deep Rock Oil and Gas and Global Beverage Solutions.
The U.S. attorney would not say if all of the companies involved were actually aware of the scheme.
Also, there is a related case. In July of last year, a man named Mark B. Lindberg pleaded guilty to the same scheme. Investigators say that case is directly related to this one.