Skip to Content

More Warnings About Oil and Gas Investment Scams

January 30, 2017 Blog

Oil and gas investment scams continue to pose a significant risk for individual investors. These scams, which often target elderly investors and individuals with little experience investing (and usually no experience investing in speculative oil and gas ventures), are commonly designed to lure investors into building their investments gradually. Then, after they have invested large sums – in some cases their entire life’s savings – investors suddenly find that their accounts are drained and they are unable to get their brokers on the phone.

Red Flags of Oil and Gas Investment Fraud

An interview from Kiplinger tells the story of one elderly couple who lost more than $300,000 in an oil and gas investment fraud scheme that netted more than $65 million. The husband’s words show that, in retrospect, the scam showed many of the classic signs of investment fraud:

“[W]e got a phone call pitching a company that invested in developing oil and gas wells. The projects promised monthly returns. . .”

Unsolicited phone calls and promises of regular, guaranteed returns should both be red flags for potential investors. Legitimate investment brokers do not cold-call potential clients, and in the oil and gas market (or any other investment market) there is no such thing as a guaranteed investment.

“They gave us a list of other people who were taking part . . . and they all said it was wonderful. And the company appeared very professional in its presentations.”

Since they are pitching fraudulent investments, scam artists need to try to appear as legitimate as possible. To do this, they will often set up professional-looking websites and send well-crafted mailings, and they may even provide “references” for satisfied clients. These references may be victims who are still in the process of growing their investments before losing everything, or they may be individuals who are part of the scam.

“[W]e got in slowly. Our first investment was $15,000 . . . [but we] continued to invest in larger and larger projects over the next seven years. All told, we invested $593,000 . . .”

Scam artists know that investors are more comfortable starting slowly, and they know that initial returns will spur additional investments. As a result, many oil and gas scams will pay “returns” to investors for years as they invest more and more, before eventually taking everything.

“We thought we were betting on gas and oil prices, which we were convinced would climb . . . We tried to prepare. We did the best we could.”

Even individuals who are diligent about doing their research can fall victim to oil and gas investment fraud scams. Unfortunately, many scam artists are very good at what they do, and technology is making it easier for them to reach new targets in ways that make them look like legitimate brokers. Investors approached about oil and gas investment opportunities should exercise extreme caution, and they should seek legal counsel at the first sign of a potential fraud.

Learn more about protecting yourself against oil and gas investment fraud:

Speak with an Investment Fraud Attorney at Zamansky LLC

If you have concerns about a potential oil and gas investment scam, you can contact Zamansky LLC to speak directly with one of our experienced investment fraud attorneys. To schedule a free and confidential consultation, call (212) 742-1414 or inquire online now.

Client Reviews

“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
View More