Lacrosse coach built trust, when he scammed Texas community in Ponzi scheme, Feds say

Using the trust he built up with his community as a teacher and lacrosse coach, a Texas man teamed up with his mother-in-law to con people out of more than $2.1 million, authorities said.

Together, they convinced more than 20 people to “invest” with them in what was later discovered to be a Ponzi scheme, according to a Sept. 14 news release from the U.S. Attorney’s Office for the Western District of Texas.

Now the 55-year-old former teacher from Midland has been sentenced to nine years in federal prison after being convicted of conspiracy to commit wire fraud and aiding and abetting wire fraud, records show. His defense attorney did not immediately respond to a request for comment from McClatchy News on September 14.

Authorities said he and his mother-in-law, a former geologist in the oil and gas industry, told people their “investments” were used to buy royalty interests in gas, oil and mineral projects in Texas and New Mexico.

“The royalty interests were reportedly purchased by several entities, including an entity called the National Royalty Group, or NRG,” officials said. “In fact, the National Royalty Group did not exist, and instead of buying royalty interests, (the duo) used the money to primarily pay for personal expenses, as well as to further the Ponzi scheme by returning some ‘distributions’ to earlier ‘investors.’

The victims included a couple who knew the man through their son, a lacrosse athlete, according to the federal indictment. They made their first “investment” of $20,000 in 2019, and “invested” about $77,500 over the course of the scheme. Authorities said they lost $45,000 after accounting for “distributions” they received.

Another victim included the man’s uncle, who was tricked out of $22,500, according to the indictment. He received three “distributions” worth about $3,047.

The man also convinced two retired teachers to “invest” a combined $40,000 between March 1, 2020 and October 13, 2020, authorities said. They received $2,020 in false distributions that appeared to be from the National Royalty Group.

People continued to invest with the man and his mother-in-law until at least December 21, 2020, authorities said.

The mother-in-law was sentenced to 5 years in prison earlier this year, records show.

In addition to the prison sentence, they were both sentenced to pay compensation to the victims of the fraud.

“The individuals who perpetrated this scheme displayed extreme greed and disregard for their victims, many of whom were friends, co-workers and even family members,” U.S. Attorney Jaime Esparza for the Western District of Texas said in the release. “Thus they destroyed the lives and livelihoods of those they claimed to care about.”