Corruption: Three execs guilty in multi-million-dollar oil and gas investment fraud

U.S. Attorney’s Office 
Eastern District of Texas

PLANO, TX—Three more executives from Provident Royalties, Inc. have pleaded guilty in connection with an investment fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales.

Brendan W. Coughlin, 46, of Dallas; Henry D. Harrison, 47, of Dallas; and W. Mark Miller, 59, of Plano, Texas, each acknowledged their roles in the multi-million-dollar oil and gas investment fraud scheme.

According to documents filed in court, Coughlin and Harrison founded and controlled Provident, and Miller served as its chief financial officer and later, as president. Between January 1, 2009 and February 3, 2009, Coughlin and Harrison conspired with others to defraud investors throughout the United States of $2.3 million. Specifically, Coughlin, Harrison, and other individuals made materially false representations and failed to disclose material facts to their investors in order to induce the investors into providing payments to Provident. Among these false representations were statements that funds invested would be used only for the project for which those funds were raised; among the material facts omitted from disclosure was that funds from investors in later oil and gas projects were being used to pay individuals who invested in earlier oil and projects. Miller knew that the crime had occurred but failed to report it to the authorities and instead took affirmative action—authorizing the lulling payments to investors—to conceal the crime from discovery.

Coughlin, Harrison, and Miller join two other Provident principals who have been held accountable for their crimes. Joseph Blimline, 35, pleaded guilty in connection with the scheme and was sentenced to 20 years in federal prison. Provident CEO/founder Paul R. Melbye, 47, pleaded guilty in connection with the scheme and faces up to five years in federal prison.

Coughlin and Harrison face up to five years in federal prison for their roles in the conspiracy. Miller faces up to three years in federal prison.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.