Two Sold Fraudulent Energy Leases, SEC Says

The Securities and Exchange Commission alleged Tuesday that two securities promoters fraudulently raised $2.2 million from the sale of oil and natural gas leases to at least 70 investors in Texas and other states.

The SEC filed a lawsuit in federal district court in Dallas against Ivan Dearaujo of PetroSite Assets Inc. of Irvine and the company’s salesman, Wesley A. Harbison Jr. The suit also named a jewelry company that Dearaujo owned.

The agency said that only about one-third of investors’ money was spent on oil and gas interests and that Dearaujo diverted “a significant portion” for his own use. The SEC said the men also raised $250,000 for the jewelry company, which lost its California charter in 2004 for failing to pay franchise taxes.

Kristin Cano, a lawyer for the two men and their companies, said she had been negotiating with the SEC for several months before the civil charges were filed Tuesday.

“Everybody is interested in settling this with the SEC, and the company has assets to do it,” Cano said.

Dearaujo, 45, is a Brazilian citizen who continued to operate the companies even while serving prison time in California from January to May for violating parole on a drug conviction, said Katherine Addleman of the SEC’s Fort Worth office.

Dearaujo is being held by immigration authorities in California and will probably be deported, Cano said.

Harbison, 54, of La Pine, Ore., was also charged with being an unlicensed securities broker.

The commission said about 70 investors bought the leases, including at least 14 in California and 12 in Texas. Most lost less than $40,000, according to an SEC document.