24 September 2004 LAWFUEL – Best law news, criminal law, SEC, legal, attorney, law firm news A telemarketer who bilked hundreds of investors out of approximately $5.7 million in an oil and gas fraud scheme in the mid-1990s has been convicted on two counts of wire fraud later yesterday.
Alan Brian Baiocchi, 46, of Newport Beach, was found guilty Thursday by a federal jury in Santa Ana, California. The jury deliberated for one day after hearing evidence for more than two weeks.
During the mid-1990s, Baiocchi was the president and operator of Intro Technology Services (“ITS”), a telemarketing boilerroom based in Newport Beach. Beginning in 1995, Baiocchi and his telemarketers, which included telemarketers in Newport Beach and in Montreal, Canada, cold-called people around the country soliciting investments in oil and gas wells in Oklahoma.
As charged in the indictment, Baiocchi and his telemarketers made numerous misrepresentations regarding the oil and gas wells, such as that the investment was safe and low risk because gas wells were already acquired and producing. In reality no gas wells had been acquired. Investors were also told that they would receive a 100% return on their investment after a certain number of months. Most significantly, Baiocchi concealed from all investors that 60% of the money they initially sent in was not going to the drilling of oil wells but rather was kept by Baiocchi and his telemarketers.
During the course of the fraudulent scheme, from 1995 to 1997, Baiocchi successfully caused more than 250 victims to invest more than $5.7 million. In accordance with the undisclosed “commission” portion of the scheme, more than $2.9 million of the investments never went to the drilling of the wells but rather to bank accounts controlled by Baiocchi.
As part of its verdict, the jury found that Baiocchi caused more than $2.5 million in losses to the victims and abused a position of trust in carrying out his scheme.
Baiocchi is scheduled to be sentenced by United States District Judge David O. Carter on January 31, 2005. At sentencing, Baiocchi faces a maximum possible sentence of ten years imprisonment, a three-year period of supervised release, a fine of $500,000 or greater, as well as restitution for losses to victim investors.
This case was investigated by agents of the California Department of Justice, the United States Postal Inspectors Office, the Federal Bureau of Investigation, and the Securities and Exchange Commission.
