American Cancer Society Gets To Keep Donations to Cattle Baron's Ball From Oil and Gas Fraudsters

Categories: Legal Battles

Cattle-Barons-Ball.png
The 5th U.S. Circuit Court of Appeals struck down a federal district court's order forcing the American Cancer Society to return some $240,000 donated by Irving-based Giant Operating, an oil and gas company the Security and Exchange Commission says defrauded investors of more than $13 million.

The ACS donations were made over the course of three years to its Cattle Baron's Ball in Dallas, billed as the "world's largest single-night fundraiser for cancer research..."

The SEC says George Wesley Harris and Stephen Plunkett made unsolicited phone calls from 2007 to 2009, hawking interests in oil and gas drilling programs that didn't exist. They promised a 100 percent return on investment within the first year. Instead, they blew at least $2 million on themselves. No investor ever received a cent in return. The two were charged with multiple securities violations. Their assets were frozen and placed in receivership.

The attorney charged with following the money trail claimed ACS should forfeit the donations from Harris because it was a "fraudulent transfer," intended only to net new suckers for Giant's "Ponzi-like scheme."

The federal appeals court decision hinged in part on whether Giant was, in fact, a Ponzi scheme. Turns out, it disagreed with the federal district court. A Ponzi scheme, the judges found, at least pays somebody a return.

"As noted above, there is no evidence that Giant's contributions furthered
any fraudulent scheme or were otherwise made with intent to defraud investors," the order reads. "ACS relied upon Giant's contributions in hosting the Cattle Baron's Ball and
incurred considerable expense in connection with receipt of those funds. These
circumstances, combined with ACS's status as a charitable organization, tilt the
equities in its favor."

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13 comments
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Marc
Marc

WAIT JUST ONE MINUTE! Is somebody suggesting that there are fraudulent operators within the oil and gas industry? Oh PLEASE say it ain't so, Joe!

Montemalone
Montemalone

Seems the victims of the fraud should get a tax deduction for the charitable donation to ACS.

Paul
Paul

The court's ruling in my opinion was narrow.  Precedent requires that innocent recipients of  cash from persons who have operated Ponzi schemes return that cash to the original investors into the Ponzi scheme

However, I think the error was made in that instead of making the argument that a Ponzi Scheme was in operation, the argument should have been made that Giant Operating was not donating its own money but in fact was donating money that was solicited from investors for another purpose.  Therefor the donation was the direct result of a fraudulent act.

One could also make the argument that the donation by Giant was in furtherance of its scheme by leading potential investors (such as those typically present at the Cattle Baron's Ball) that Giant was a highly successful ongoing concern and that the donation to the CBB was indeed as the result of profits generated by Giant and not the mere transfer of moneys from Giant's investors to the CBB.

claytonauger
claytonauger

Gosh, I thought for sure the Observer would have a reporter at last night's meeting to combat oil and gas fraudsters - the ones who want to frack Dallas wide open. Over 100 people came to the first citywide organizing meeting on drilling in Dallas. The DMN was there thanks to Wilonsky. Downwinders has a post on it: http://downwindersatrisk.org/_... Where's the Observer coverage?

Marc
Marc

For the record, Leslie Minora was there sitting on the front row, and she interviewed several people including most of those on the stage. Your complaint is baseless.

Joe Tone
Joe Tone

@claytonauger:disqus : We had someone there, and should have had the story up earlier. But just to clarify: The DMN didn't have someone there because of Wilonsky; it had someone there because they have a newsroom of hundreds of people, including entire teams of people who work shifts specifically to cover this sort of thing. You'll notice the story was done not by Wilonsky but by the "night reporter:" http://thescoopblog.dallasnews...

(We have four news reporters. They're very often drunk at night. The job pretty much requires it.)

The point is, even at full strength, we can't cover everything like the daily-- and if we strive to, we'll blow our mission. And as a reader of this blog, you know we're not at full strength. We're looking for an anchor, and when we find one we will return to something resembling full speed. If you want to, as @ab3ba14e86bf7a3458dcd139466b4067:disqus  so politely suggests below, pack up and move on, you're welcome to. I'd understand. But I'd ask for some patience and suggest sticking around.

Thanks for reading.

 

Doghost
Doghost

The Observer no longer covers sports or breaking local news. Sorry.

If you check back later, we will have something posted about why Rick Perry sucks, DISD sucks, or conservatives suck.

And if you're hoping any of those stories will break new ground or provide any kind of nuance, I suggest you pack your bags and go somewhere else.

Max from the Sandspit
Max from the Sandspit

Ain't that the truth, this Fag Rag has gone from top of the heap as a news source to just another limp dick publication. I suggested a ways back, when they lost Gonzales and dumped Richy Whitt that the titty bars that advertize in the rag Boycott. They didn't, so fuck Dallas and Team Obama and their ODer pals. Hey JimS whats happening with JWP, EBJ and your hoodie brethren.

Chris Danger
Chris Danger

One word: Good. The ACS shouldn't have to pay for the sins of the donating parties..Now, lets get back to finding a cure for cancer..

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