BILLINGS, Mont. (AP) — Six California residents are being held on fraud and conspiracy charges for an alleged scam in which investors were promised a stake in a fictitious oil and gas project on Montana's Fort Peck Indian Reservation, authorities said Tuesday.
The first of the suspects, Mike Campa of Yorba Linda, Calif., made an initial appearance Tuesday in Great Falls before U.S. Magistrate Judge Keith Strong.
Campa did not enter a plea and said he plans to hire his own attorney, said Assistant U.S. Attorney Carl Rostad. Campa is currently detained.
An affidavit submitted by an FBI agent in the case shows that beginning in 2009, dozens of people across the country invested about $673,000 into a drilling project being promoted by the defendants.
Potential investors contacted by email and telephone were promised lucrative returns: Their initial investments were to be repaid within six months and then regular monthly checks would begin flowing thereafter.
To make the story more believable, the defendants presented a copy of a 2006 letter from the federal Bureau of Indian Affairs approving three oil and gas leases on land owned by a Fort Peck tribal member. The northeastern Montana reservation sits atop the Bakken oil patch, one of the richest oil producing regions in the U.S.
But those federal leases had been canceled for non-payment in 2007, court documents show. And authorities said the two companies created by the defendants — Domestic Energy Solutions and U.S. Oil and Gas LLC — never really pursued the oil and gas project, which was also said to include a refinery, pipelines and other infrastructure.
"Neither company has ever made any meaningful efforts to spend the money on development of oil and gas ventures at Fort Peck or anywhere else," FBI agent David Burns in Glasgow wrote in his affidavit.
The six defendants were arrested by authorities Aug. 24 in California, documents show.
Three of them — Suzette Gal and sons Andras and Krisztian Zoltan Geoge Gal — were released on bond pending Sept. 11 court appearances in Montana, Rostad said. The other defendants are Steven William Carpenter, who is currently detained awaiting a hearing in California, and Dana Yvonne Kent, who was detained and being transferred to Montana Tuesday.
Indictments have not yet been filed in the case. "We anticipate formal charges will be forthcoming," Rostad said. Rostad declined to discuss further details in the case.
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