Wednesday, May 21, 2008

Weatherford cattleman pleads guilty to mail fraud

By Pegasus News wire

Oscar Black, 58, of Weatherford, who owned and operated OB Cattle, pled guilty in federal court in Dallas to one count of mail fraud, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. Black faces a statutory maximum sentence of 20 years in prison, a $250,000 fine and restitution. He is scheduled to be sentenced by U.S. District Judge Sam A. Lindsay on September 2.

According to documents filed in Court, Black offered investment opportunities to his acquaintances and guaranteed investors a 12% annual rate of return. Initially, Black deposited investors’ money into a bank account, but he eventually discovered that he couldn’t deliver the guaranteed rate of return without placing investors’ money in riskier ventures.

Black began using investors’ money to pay expenses and provide capital for OB Cattle. Initially, he was able to meet his obligations to investors with profits from OB Cattle, but eventually OB Cattle began losing money and he wasn’t able to satisfy his financial obligations to investors. He knew if he advised his investors that they were losing money, they wouldn’t invest any more money with him and would withdraw their funds. So, to discourage them, Black falsely represented to them that their investments had appreciated, when in fact, he had used their money to pay expenses for his depreciating cattle business, OB Cattle. To further his scheme, Black even fraudulently mailed investors fictitious monthly account statements that falsely represented that their investments were appreciating. All of Black’s false promises, representations and omissions were intended to deceive investors so that he could keep their money and to use it to pay his business expenses.

During the course of his scheme, Black made fraudulent material misrepresentations to First National Bank of Weatherford and Wells Fargo Bank. As a result, First National Bank Weatherford suffered approximately $590,016.03 in losses and Wells Fargo Bank suffered approximately $3,000,000 in losses. Black’s investors lost a total of approximately $3,137,230.78.

U.S. Attorney Roper praised the investigative efforts of the Federal Bureau of Investigation. Assistant U.S. Attorney Jay S. Weimer is prosecuting the case.

Source: Department of Justice

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