NICHOLASVILLE — The alleged unpaid royalties from a Texas oil strike that Jewell Robbins could not produce during her lifetime are now sought by thousands of people after her death.
Since Robbins' death Sept. 20 at age 80 after a long illness, deputies in the Jessamine Circuit Court Clerk's office estimate that thousands of people have filed claims against her estate. Clerk Doug Fain counted eight boxes and wire trays stuffed with claims mailed from all over the country and Canada.
"I've never seen anything like it," Fain said.
Those filing claims seek a return on the $25 or $100 or thousands of dollars they invested with Robbins in the hope of receiving undistributed oil royalties.
"A lot of money has gone through Jewell's fingers in this deal," investor Dan Monahan of Mason, Ohio, told District Judge Janet Booth during a May 30 hearing in Nicholasville.
In 2003, 2006 and 2008, Robbins got in trouble with the state attorney general and state regulators for selling unregistered securities and for not being registered to sell securities.
The state Department of Financial Institutions said Robbins sold shares in baseless lawsuits that attempted to claim unpaid royalties from the 1901 Spindletop oil strike near Beaumont, Texas. Spindletop was one of the richest oil deposits on Earth and yielded billions of dollars' worth of crude oil since production began.
In 2009, Robbins was sentenced to five years of unsupervised probation for violating securities laws related to the sale of shares in litigation associated with Spindletop.
Monahan would not say how much he invested with Robbins, but he claimed that there are 11,300 people who invested with her. During its investigation some years ago, the state Department of Financial Institutions counted nearly 10,000 people who had invested with Robbins since 1985.
No one knows how much money was invested through her and her associates. However, a state investigator looking into Robbins' bank records wrote in a 2007 affidavit that she found more than $2.5 million in three accounts. All the deposits were made payable to and were endorsed by Robbins.
In addition, during six months between April and October 2005, after Robbins had voluntarily assured state authorities that neither she nor anyone associated with her would solicit or accept money for Spindletop securities, "slightly less than" $500,000 had been deposited in an account, the investigator found.
On June 16, 2006, Robbins signed a voluntary, permanent injunction that barred her from selling any securities, including partial interest in litigation or judgments.
In 2008, Robbins served about 110 days of a 120-day sentence for contempt of court after Franklin Circuit Court Judge Thomas Wingate ruled that she had violated the 2006 injunction and a May 2007 order to refrain from selling securities. (Wingate doubted out loud that there were any undistributed royalties, calling it "an urban myth.")
The remaining days of the Franklin County sentence were suspended when a Fayette County grand jury indicted Robbins on four felony charges. Three of those charges were dismissed when she pleaded guilty in 2009.
Fayette Circuit Judge James Ishmael Jr. didn't mince words about the sale of shares when he sentenced Robbins to five years of unsupervised probation.
"I think it was a bunch of bull and I think Mrs. Robbins knows it was bull," Ishmael said.
But in an interview after that 2009 sentencing, Robbins said: "You don't put 30 years of your life into something ... if you believe it's bull." Apparently many investors filing claims share that conviction.
Keeping her wishes
Jessamine District Judge Janet Booth set a June 13 deadline for people to file claims against Robbins' estate in court. (That date was the end of a six-month period for creditors to file claims. Under Kentucky probate law, creditors of estates have six months to file claims, and any claims not filed within the six-month period are not enforceable. So anyone who filed a claim after June 13 is excluded from receiving any distributions from the estate.)
Booth, in keeping with the wishes outlined in Robbins' last will and testament, appointed Angela Carter of Lexington, a daughter of Robbins, and Robert Mercer, a friend of Robbins, as co-administrators of the estate. In a codicil to her will, Robbins expressed the desire that Mercer, a Perry County native, be appointed a special administrator who would continue the search for undistributed oil money.
Mercer described his role this way: "I am the person that is trying to put all the puzzle together and get the money into the probate court."
Asked whether there is money to collect, Mercer said, "I don't know. Time will tell. ... I have two very competent law firms that are working on it. I leave it to the attorneys. I only hire good people and let them do their job."
An inventory of personal property and real estate owned by Robbins totaled only $1,525. It included two one-acre lots in her native Estill County, a rabbit-fur coat, an antique sewing machine and various furniture, clothes, shoes and purses.
In his separate inventory of the estate, Mercer wrote that Robbins, at the time of her death, held in her name contracts for the rightful heirs of the Spindletop fortune.
"Each estate in one form or another holds outright interests in real property, oil leases or mineral rights, the payment of which has never been satisfied," the inventory says. It also says that the estimated value of the unclaimed funds "may range from a few thousands of dollars to billions."
During a May 30 hearing in Jessamine District Court, daughter Angela Carter said all the "sales and assignments," or contracts for fractional shares, that her mother sold over the years are in a storage unit that has 39 filing cabinets and boxes stacked to the ceiling. The information also is stored on compact discs.
Monahan, the Ohio investor, also alleged that before she died, Robbins was negotiating a settlement agreement with a bank or oil company "for monies due to the estate under contract." Monahan claims in a petition that Robbins "indicated that this settlement was for millions upon millions & millions of dollars. She further stated that the payment would be paid directly to an offshore limited-liability (foreign company) located in the Cayman Islands."
Financial accounts in that Caribbean island nation are protected by bank-secrecy laws.
But Mercer told Judge Booth under oath that he had not seen any such agreement. Mercer also told the judge under oath that he had no knowledge of any offshore accounts in the Cayman Islands.
"It's very unlikely that Jewell would have anything like that," Mercer said in a later interview. "She didn't have a passport, and she wouldn't fly if you put her in a plane. She wouldn't fly in a plane, period."
Carter also dismissed the Cayman Islands story, saying during the court hearing that "there are all kinds of rumors" about her mother's activities.
Before the hearing ended, Monahan said he and the thousands of other investors only want to know what's happening with the estate.
"I'd like to make it clear to Mrs. Carter and Mr. Mercer, we are not the enemy. We believed in Jewell. We gave her our money," Monahan said. "All we were looking for is communication back of how things develop."
Judge Booth said during the hearing that Carter and Mercer are required to periodically report to the court.
During that same hearing, Monahan said the Kentucky Department of Financial Institutions is investigating allegations that Robbins' daughters continue to sell shares.
Kelly May, spokeswoman for the department, confirmed this week that there is an open investigation into the continued sale of shares, but she could not discuss details.
Greg Kocher:(859) 231-3305. Twitter: @heraldleader.