A former college professor from Huntington Beach was sentenced this week to eight years in prison and fined $329,900 for enticing hundreds of people into investing in bogus oil well projects, postal authorities said Tuesday.
Jason Wallace Smith, 51, was found guilty in December of mail fraud, wire fraud, money laundering, bankruptcy fraud and conspiracy.
Smith is a former assistant professor of archeology at Cal State Los Angeles and Cal State Northridge. He also is the son of former Idaho Atty. Gen. Graydon W. Smith.
From January, 1985 through early 1987, 180 investors nationwide lost nearly $2 million after investing in Smith’s Los Angeles-based company, Jason Smith Petroleum Corp. Authorities said Smith used at least $194,000 of the money to finance his own lavish lifestyle.
Smith reportedly drilled a dry oil well in Wyoming but claimed to investors that the well was producing 240 barrels of oil per day. He also severely exaggerated the amount of oil being produced in several other wells.
Smith also laundered money from investors through bank accounts under third-party names in Los Angeles, Wyoming and the Bahamas to avoid detection by the Securities and Exchange Commission and the U.S. Postal Service, authorities said.
“It’s a sorry day for investors who can’t even rely on the promises of a doctor of archeology and a state university professor,” said David H. Smith, who is in charge of the Postal Inspection Service’s Los Angeles division.
“There is an extremely high burden on investors to seek out their own facts and figures and not rely solely on the word of any single person, no matter how credible that person seems on the surface,” the postal inspector said.