FORT WORTH, Texas — An oil and gas fraudster was sentenced to more than 17 years in federal prison for running a multi-million dollar Ponzi-type scheme, according to the U.S. Attorney for the Northern District of Texas Leigha Simonton.
Billy Marcum Jr., 67, of Fort Worth, pleaded guilty in December 2022 to wire fraud.
On Thursday, June 22, he was sentenced to 17 and a half years (210 months) in prison by U.S. District Judge Mark Pittman, who also ordered him to pay more than $16 million in restitution.
In plea papers, Marcum – the owner of a number of oil and gas companies, including Navarro Minerals, Caddo I, Bluecreek Operating, Fullspike Energy, Viejo Services, and Viejo Exploration – said he solicited money from investors, according to the U.S. Attorney's Office.
Marcum told them their funds would be used to purchase oil and gas leases and to pay for well oil repairs and returns would be paid out of profits from the ensuing oil and gas sales.
Instead of purchasing the leases, Marcum used new investors’ money to fund earlier investors’ returns, lulling them into believing their investments were solid and that they should continue investing with him, the U.S. Attorney's Office said. Marcum also used some of the investment money to pay personal expenses.
In furtherance of the scheme, Marcum fabricated reports about oil production and sales and sent them to investors, the U.S. Attorney's Office said. The false run statements noted purported lease name and number, the gross volume of product taken, sales value, taxes paid, dates, and net amount to be paid to the operator.
Marcum also allegedly recorded false lease assignments related to his scheme in counties throughout Texas to disguise his crime.
Around September 2018, the U.S. Attorney's Office said Marcum realized he lacked sufficient revenues and could no longer raise sufficient funds to pay existing investors. He conspired with a man named Jay Taylor to solicit investor funds on behalf of several of his companies.
Marcum knowingly supplied false information to Taylor, who used the information to successfully solicit additional funds, according to the U.S. Attorney's Office.
In April 2022, Marcum admitted to FBI agents that he concocted false run statements about oil and gas sales and sent them directly to some investors and indirectly, through Taylor, to others in order to entice investments.
Marcum also admitted that he used new investor funds to pay off other investors and represented to them that the returns were from oil sales.
At sentencing, prosecutors said Marcum defrauded over 150 victims, collecting nearly $30 million in investor funds and inflicting over $16 million in losses.
Taylor also pleaded guilty to wire fraud and was sentenced in April to eight years in federal prison.
The Federal Bureau of Investigation’s Dallas Field Office – Fort Worth Resident Office conducted the investigation. Assistant U.S. Attorneys Nancy Larson, John de la Garza, and Beverly Chapman prosecuted the case.
