Adapted from the article: Investors say oilman swindled them out of millions, then turned up on MTV's 'Sweet 16'.
Not long after entrusting millions to a Kentucky oilman, the investors started asking questions: Where was the oil? Where was their money? And where was the oilman?
They think they got at least some answers when they turned on an episode of "My Super Sweet 16," an MTV reality show about spoiled rich kids and their outrageously opulent birthday parties.
To their astonishment, the investors saw oilman Gary Milby on television giving his daughter a private helicopter ride, a new $35,000 BMW and a shopping spree.
The cameras followed Milby to his oil fields where his daughter, Ariel, exclaimed, "I love oil! Oil means shoes and cars and purses!" Pointing to one of the drills, Milby told his daughter, "This one here will make over 20 barrels a day."
About 60 investors who say they heard similar promises from Milby are suing him in federal court, accusing Milby of defrauding them out of at least $4.5 million.
All told, Milby raised $20 million to $25 million from investors over nearly two years, the investors' lawyer estimates -- even though officials in several states had demanded Milby stop selling securities in his Tennessee oil and gas companies. It appears no criminal charges have been filed against him.
Milby, 53, has become hard to find, which is why his investors and state regulators were so shocked in February to see him on "My Super Sweet 16."
One investor, the Rev. Joseph Wheat, a 68-year-old minister at the First Apostolic Church in Bastrop, La., said he gave Milby $58,500 after seeing the oil fields. When Wheat visited the Kentucky oil fields about 70 miles east of Bowling Green, one well began to shoot black oil in the air. Wheat said he now suspects the gusher was staged. He said he believes the wells -- and Milby's promises -- were empty.
What Milby never told investors, the lawsuits claim, is that regulatory agencies in five states have ordered him and his companies to stop advertising and selling the securities. Also, Texas barred him from owning oil wells for seven years after safety violations were found at his wells.
In September, the Arizona Corporation Commission ordered Milby to pay a $1 million penalty for selling securities despite a cease-and-desist order. He never showed for a hearing and has yet to pay a penny, said Heather Murphy, commission spokeswoman.
Some pictures from Ariel's party (photo credit: MTV.com):
Ariel and dad, Gary
Father and daughter
dance at party
After carriage ride
After helicopter arrival
Gary Milby
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