Irvine Man Admits Role in $5 Million Oil Fraud

A 72-year-old Irvine man has admitted to being one of the masterminds behind a scheme, tied to oil well investments, that bilked more than 200 people out of a total of $5 million, the Orange County district attorney’s office said Thursday.

Sidney Binder, who owns several oil wells in Texas and Oklahoma, pleaded guilty to selling unregistered securities. He faces up to two years in prison when he is sentenced on Aug. 27 in Orange County Superior Court, according to Deputy Dist. Atty. JimmieHarris.

Binder, who operated a Newport Beach tax service, convinced many of his clients that they should invest in oil wells to shelter their money from taxes. Many clients invested in oil well leases held by the Cal-Tex Operating Co., which Binder had helped found.

Some of the victims, many of whom were elderly, invested more than $100,000 in oil wells that didn’t exist or wells that did not produce enough oil to cover their investment, Harris said.

A co-defendant, Weldon Roberts of Texas, has been charged with 13 counts of selling unregistered securities. Roberts, 59, is scheduled to appear in court on July 16.

Binder had previously served two years in federal prison and five years probation after being convicted of 15 counts of mail fraud by a jury in Los Angeles in 1985. The mail fraud charges stemmed from various real estate and investment deals that Binder put together.

At that time, Binder was a partner in five firms, known as Questar Cos., that had become defunct.

He and his partners were charged with defrauding investors, mostly from Orange County, of about $1 million by making false statements when they sold undeveloped land in the Antelope Valley and San Bernardino County.