Government: Bedford Man Raised $17M in Oil Scheme

Lawsuit claims he spent money on children’s tuition, gold coins, cancer cure

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    Bret L. Boteler, president and founder of EnerMax Inc.

    A Bedford man raised $17 million from 260 people in 40 states in a fraudulent oil-and-gas drilling scheme, the government says in a lawsuit.

    Bret L. Boteler, president and founder of EnerMax Inc., used the money to enrich himself, buy gold coins and invest in a company marketing medicinal water as a cancer cure, according to the lawsuit by the U.S. Securities and Exchange Commission.

    Boteler, 48, portrayed EnerMax as "an innovative, technologically sophisticated company," the SEC said. "These representations were materially false and misleading."

    In fact, Enermax, which had an office in Hurst, did not have any crews or equipment itself and improperly sold unregistered securities to uninformed investors who lost most of their money, the lawsuit alleges.

    The SEC, a federal agency that regulates sales of securities, filed the lawsuit in U.S. District Court in Fort Worth last week.

    In a short phone conversation on Monday, Boteler disputed the charges against him.

    He said the SEC lawsuit was "sloppy, dishonest and assaults my integrity."

    Boteler specifically took issue with the SEC calling him "inexperienced" and said he has spent "countless hours" at oil rigs in an RV that is parked in his driveway.

    He agreed to a more detailed interview on Tuesday but later reneged and declined to comment further.

    Money Trail Detailed

    Between 2008 and 2011, Boteler paid himself $984,000 from Enermax funds, the SEC claims.

    He took an extra $230,000 for "unspecified expenses" and $65,000 for his children's private school tuition -- payments that he characterized as loans but never repaid, the SEC said.

    The lawsuit also claims Boteler used:

    • $253,000 of investors' money to give to a company apparently operating a fraudulent advance-fee loan scheme.
    • $504,000 to invest in a company that managed EnerMax's website.
    • $12,000 to buy gold coins, which he later sold for $7,000.
    • $191,000 to invest in a "now-failed company selling medicinal water as a cancer cure."

    SEC: Holes Mostly Unproductive

    While some wells EnerMax drilled did produce small amounts of oil, the SEC lawsuit claims they made little money and investors were never informed they were high-risk.

    In one case, the lawsuit said, EnerMax touted the success of the Permian Basin in its fundraising pitches but failed to tell investors that they were drilling as much as one mile below the formations where other companies commonly drilled.

    "Drilling to those depths was far more speculative and costly, which greatly increased the risks," the SEC said.

    Financial History

    Public records show Boteler has a history of financial and legal difficulties.

    In 1996, he declared personal bankruptcy.

    The IRS filed liens on his Bedford home for the tax years 1996, 1997, 1998 and 1999, but later filed a court document saying those debts had been paid.

    In 2008, the IRS filed another lien, claiming Boteler owed $21,136 in taxes for 2001 and $54,881 for 2006.

    Investor's Lawsuit Settled

    In May 2008, a New Jersey doctor, Debra Fullan, sued Boteler and Enermax over an $81,250 investment she made with EnerMax the year before.

    She said the company asked her to invest in a drilling project known as Hitchcock #1.

    In a letter, Enermax called Hitchcock "the highest-ranked well in (their) inventory" and described its chances of success as "excellent," Fullan claimed in the lawsuit.

    She wanted her money back after learning the drilling was never done, but Enermax kept her money to invest in two other projects, she said.

    Attorneys for Boteler and his company denied the allegations, said they were operating a joint venture and not selling unregistered securities and counter-sued in Tarrant County District Court for defamation.

    A judge later dismissed the company's counterclaims, and the original case was settled out of court. Details of the settlement were not released.

    SEC Case

    In its lawsuit, the SEC accuses Boteler of selling unregistered securities and fraudulent actions. It asks a judge to order him to stop selling oil-and-gas securities and repay the money he obtained illegally, plus interest.

    The government also claims EnerMax owes $1.5 million to operators of two drilling rigs in which it suspended operations.

    The company marketed itself through a website and a sales team that made "cold calls" nationwide, the lawsuit said.

    Enermax went out of business in May. The SEC allegations cover the period from November 2007 to December 2011.

    The company's website was still online this week.

    "Using state-of-the-art technology, EnerMax selects high quality prospects, eliminating many dry holes," the website says.