LOUISVILLE, Ky. (AP) — The CEO of a bankrupt southern Kentucky oil company has been charged with scamming investors into giving him money for three oil partnerships in Kentucky and Tennessee.
The charges against Anthony L. Young of Knob Lick, who runs Young Oil in Metcalfe County, are the latest in a long-running legal saga enveloping the businessman and his company.
The latest case charges Young with mail fraud and using the mail to employ deceptive devices in connection with the purchase and sale of a security. The charges stem from allegations that Young coerced an investor in North Carolina to send $30,000 in September 2008 to help offset the $750,000 cost of drilling the wells. Prosecutors say Young never invested the money in the wells.
Young ran Young Oil Corp. as it collapsed into bankruptcy in 2009, two months before Franklin Circuit Court Judge Thomas Wingate concluded that the CEO and his company committed fraud and violated the Kentucky Securities Act.
Young and the company owe the state a $20 million judgment. U.S. Bankruptcy Judge Joan Lloyd suspended attempts by the state to collect the judgment in November 2009 because of the pending bankruptcy case.
In the latest case, unsealed Wednesday in U.S. District Court in Bowling Green, Young is accused of soliciting $750,000 from investors for a trio of oil drilling partnerships — identified as Prospects 54, 55 and 56 — with three potential wells in each prospect.
Prosecutors say Young fraudulently told investors that $650,000 of the money covered the cost of drilling and the other $100,000 took care of organizational costs for the three wells at each of the prospects. Young also told investors he would cover any costs above $750,000, prosecutors said.
The drilling and organizational costs were "substantially less" than $750,000 and Young did not invest the majority of the money in the prospects, according to the indictment.
The indictment did not state where the proposed oil wells were located.