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The following is an archived video story. The text content of that video story is available below for reference. The original video has been deleted and is no longer available.

Investment fraud leads to federal prison sentences

SHERMAN, Texas - From U.S. Attorney's Office

Four executives from Provident Royalties, Inc. have been sentenced in connection with a multi-million dollar oil and gas investment fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today

Brendan W. Coughlin, 46, of Dallas, pleaded guilty on Feb. 2, 2013 to conspiracy to commit mail fraud and was sentenced to 21 months in federal prison today by U.S. District Judge Marcia A. Crone.

Henry D. Harrison, 47, of Dallas, pleaded guilty on Feb. 2, 2013, to conspiracy to commit mail fraud and was sentenced to 21 months in federal prison today by Judge Crone.

Paul R. Melbye, 47, of Dallas, pleaded guilty on Nov. 11, 2012, to conspiracy to commit mail fraud and was sentenced to 18 months in federal prison today by Judge Crone.

W. Mark Miller, 59, of Plano, Texas, pleaded guilty on Feb. 12, 2013, to conspiracy to commit mail fraud and was sentenced to six months in federal prison to be followed by six months home confinement today by Judge Crone.

All four defendants were also ordered to pay restitution in the amount of $2.3 million.

According to court documents, Coughlin, Harrison, Melbye, and Joseph Blimline, 35, of Dallas, founded and controlled Provident, while Miller served as its Chief Financial Officer and later, as President. Provident successfully raised almost half a billion dollars from investors throughout the United States, much of which was lost to Blimline’s manipulation of investor capital prior to his departure from Provident in late 2008. From Jan. 1, 2009, to Feb. 3, 2009, even after discovering what Blimline had done, Coughlin, Harrison, and Melbye failed to disclose the dire state of the company to investors in order to take in an additional $2.3 million, while Miller, who knew that the crime had occurred, authorized lulling payments to investors to conceal the crime from discovery.

Blimline previously pleaded guilty to his role in the Provident scheme as well as his role in an earlier, similar scheme in Michigan, and is serving a twelve year prison sentence.

U.S. Attorney Bales cautioned potential investors, "Investment fraud is often accomplished through a glittering presentation that promises fast, extraordinarily high returns. Remember that if it looks too good to be true, it often is. While we will always hold responsible those that commit fraud, there is no substitute for a healthy dose of skepticism."

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.



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