Utahns among Texans' investors

Don Latimer worked 40 years as a marketing executive and businessman, but now, much of his retirement savings could be gone.

"You work hard for that kind of money," the 79-year-old Springville man said.

Latimer and his wife are among several Utahns and a major local company that are among those who invested money in a Texas-based company that the federal government is investigating in connection with a nearly half-billion-dollar fraud scheme.

The Securities and Exchange Commission this week obtained an emergency asset freeze in a $485 million offering fraud and Ponzi scheme orchestrated by three Dallas businessmen through a company they owned and controlled, Provident Royalties LLC, the SEC said in a news release.

The agency alleges that Provident made a series of fraudulent securities offerings involving oil and gas assets through 21 affiliated entities to more than 7,700 investors throughout the United States from at least June 2006 through January 2009. The company chiefly solicited retail broker-dealers to find investors, with those retail broker-dealers selling Provident stock to investors nationwide, the release said.

In June, prior to the commission action, Provident filed for Chapter 11 bankruptcy reorganization in Dallas.

Sinclair Oil & Gas Co., an affiliate of Sinclair Oil Corp., headquartered in Salt Lake City, is the largest creditor in the case — listed in court documents as being owed more than $150 million.

The Latimers invested more than $250,000 in the company through their individual retirement accounts. He told the Deseret News that he was dismayed by the recent revelations surrounding the company.

"I am extremely upset this happened because we investigated the company and from all indications they had money enough to … sell their leases," he said.

"We're hoping it will still work out and that we won't lose everything (we invested)," Latimer said.

Lyle Warner of Sandy said he also was heavily invested in Provident and was taken aback when he found out about the fraud allegations leveled by the SEC.

"It scares the hell out of me," he said. "I got a half-million dollars in them."

According to the SEC's complaint filed in U.S. District Court for the Northern District of Texas, Provident falsely promised yearly returns of up to 18 percent and misrepresented to investors that 85 percent of the funds raised through the offerings would be used to purchase interests in oil and gas real estate, leases, mineral rights, and interests, exploration and development.