Fraud Charged in ‘Boiler Room’ Oil Lease Sales

The operators of a defunct Laguna Hills “boiler room” that sold Alaskan oil leases by telephone have been arrested on felony securities fraud charges filed by officials in Kansas.

One of the men, Jesse B. Sperling, 47, of Laguna Hills, has previous felony convictions for mail fraud and for robbing the Tustin branch of Bank of America by threatening to detonate a bomb, according to authorities in Kansas.

Sperling started his own oil lease sales operation, authorities said, after working at a Newport Beach telemarketing operation whose owner committed suicide last year, shortly after Kansas officials charged him with six felony counts of fraud.

Although both operations were based in Orange County, they were subject to the laws of the state in which they solicited sales. Both targeted customers throughout the Midwest, and Kansas has aggressively prosecuted fraud by telephone boiler-room operators.

Sperling and his former partner, Terrence D. Gordon, 44, of North Hollywood, were arrested Friday and are being held without bail--Sperling at Orange County Jail and Gordon at Los Angeles County Jail--pending extradition to Kansas.

Sheriff’s deputies in both counties said the two were arrested on warrants issued by Gov. George Deukmejian’s office on behalf of the Kansas Securities Commission, which filed the charges.

While the warrants charge the two with bilking an investor out of $6,400.

The Kansas Securities Commission alleges that their now-defunct partnership, American Oil & Gas Co., received about $100,000 from four Kansas investors from May 1, 1984, to Jan. 31, 1986.

The commission is continuing to investigate other investors’ claims against Sperling and Gordon, as well as fraud claims against a number of other boiler room operations in Southern California, according to Larry Cook, the commission’s director of enforcement.

“Most of these telephone solicitors are in Southern California, though we’ve noticed that a few are moving into Nevada in the Las Vegas area,” Cook said Wednesday.

An investigator for a special boiler room task force with headquarters in Los Angeles said recently there are about 150 telephone sales operations in Southern California, most of them in Orange County, that are being monitored for possible illegal activities.

Sperling and Gordon, if convicted, each face a maximum sentence of three years in prison and a $5,000 fine on the single fraud count filed against them.

Cook said prosecutors in Kansas will also invoke the state’s habitual-criminal law against Sperling, which would subject him to a maximum of nine years in prison.

Sperling was convicted in 1976 of mail fraud and in 1979 of bank robbery, Cook said.

Earlier Investigation

Neither Sperling’s nor Gordon’s lawyer could be reached for comment.

Before opening American Oil & Gas Co., Cook said, Sperling worked for John Carl Parsons at Citizens Oil and Gas Co. in Newport Beach.

Sperling left Citizens in the spring of 1984 as Kansas officials began to investigate Parsons, Cook said.

Parsons, himself a twice-convicted felon, eventually was charged by Kansas officials with six felony counts of securities fraud in connection with the Citizens case. He was awaiting trial in August, 1986, when he and his wife, Ella, committed suicide by locking themselves in the garage of their Irvine home and breathing carbon monoxide from their automobile’s exhaust.

Cook said that American Oil’s operation was essentially the same as that of Citizens, which was grossing about $150,000 a week at the time of Parsons’ arrest.

American sold oil leases on federally owned Alaskan land for up to $10 an acre, Cook said, without telling customers that the Bureau of Land Management was offering the same leases for $1 an acre.

The company’s owners and its five salesmen also failed to tell customers that the leases had to be renewed each year for 10 years, he said.

The charges against Sperling and Gordon, according to Kansas officials, stem from their dealings with an investor in Johnson County, Kansas, near Kansas City.

Telephone Pitches Described

The investor, whom Cook would not name, paid $6,400 for a lease on 640 acres, and American Oil forwarded $640 to the Bureau of Land Management to obtain the lease.

In telephone pitches by both Sperling and Gordon, Cook said, the investor was told that the price was the “going rate” for a lease; that major oil companies would be testing for oil and gas on the property within six months; that major wells were producing oil nearby and that the investor would get about 10 times his investment back in royalties.

Sperling and Gordon also told the investor that they had geologists on staff and at the Alaska sites doing reviews and that the company was offering only land that had the potential to contain oil or gas, Cook said.

But all of those statements were false, Cook said.

American closed in January, 1986, barely a month after Kansas Securities Commission investigators filed subpoenas for company records, Cook said.

After a nine-month investigation, the commission filed criminal charges against Sperling and Gordon and obtained the warrant from Deukmejian’s office, a time-consuming and little-used route to seek extradition, according to Southland police officials. Obtaining the warrant took more than a year.