31 Mar SEC Alleges Bret L. Boteler Committed Securities Fraud
Bret L. Boteler, the president of EnerMax, Inc., raised $17.26 million through the fraudulent offer and sale of securities to over 250 investors in more than 40 states without registering any offering, according to a complaint filed by the Securities and Exchange Commission (SEC).
Boteler used EnerMax’s website and EnerMax’s sales force to “cold call” hundreds of prospective investors to offer and sell securities, according to the complaint. The securities, in the form of investment contracts, represented interests in what were essentially 16 limited partnerships styled as “joint ventures” and the ventures were formed to drill nine oil-and-gas wells and operate one salt water disposal well in Yoakum County and Runnels County, Texas, according to the SEC.
Boteler, as the president of EnerMax, which was the managing venturer for the 16 ventures, controlled the operations of each venture and the flow of information relevant to their operations, according to the complaint. Few, if any, of the venture investors had experience with oil-and-gas exploration or operations. The investors lacked any relationship with each other or with Enermax and had no meaningful access to information necessary to govern the ventures’ affairs, according to the SEC.
The offering materials provided to investors failed to disclose information regarding EnerMax’s financial obligations and its ability to meet such obligations, and its misapplication of the offering proceeds, including for Boteler’s personal benefit, according to the SEC.
Despite the joint ventures’ poor operation performances, Boteler personally benefited from the comingling and payment priorities that he directed, according to the complaint. Boteler received a total of $432,000 in salary from the EnerMax, Inc. account between 2008 and 2011 and also received $552,000 from the EnerMax operating account, according to the SEC. Boteler also took an additional $230,000 for unspecified expenses and $65,000 for his children’s private school tuition from the EnerMax operating account and characterized both as loans in EnerMax’s books which were never repaid, according to the complaint.
Boteler also used $253,000 of comingled investor funds in an attempt to secure funds from what appears to be a company operating a fraudulent advance-fee loan scheme, according to the SEC. Boteler also invested $504,000 of comingled investor funds in units of an internet services company that managed EnerMax’s website and internet communications, according to the complaint. Boteler also directed other improper expenditures from the EnerMax operating account, including a $12,000 purchase of gold coins and a $191,000 investment in a now-failed company selling medicinal water as a cancer cure, according to the SEC.
EnerMax has now ceased operations and ended its management of the joint ventures, without investors realizing any significant return of their investment, according to the complaint.
The Peiffer Wolf securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting investors with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Wolf, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 585-310-5140.
