A Bowling Green businessman has been convicted of defrauding people of more than $1 million in a case involving investments in a natural-gas pipeline in Tennessee.
Clay Shelton, 48, faces up to 20 years in prison, according to a release from Russell M. Coleman, U.S. Attorney for the Western District of Kentucky.
Shelton owned U.S. Energy Partners, which managed oil and gas partnerships, according to a court document.
He was charged with soliciting $1.37 million from 11 investors in 2011 and 2012 to use in buying the Monterey Pipeline in Tennessee.
Digital Access For Only $0.99
For the most comprehensive local coverage, subscribe today.
Shelton allegedly told investors their money would be held in escrow to secure a loan of $10 million or more.
Shelton told investors that after the loan came through, they would get back their money plus 25 percent, or the pipeline company would buy their interest in Tennessee wells, according to the indictment.
Shelton instead used investors’ money for other purposes, including a risky investment in collateralized mortgage obligations that lost money, according to court documents.
A jury convicted Shelton on a total of 24 counts of wire fraud, money laundering and securities fraud.
U.S. District Judge Greg N. Stivers ordered Shelton taken into custody after the verdict on Jan. 11 and scheduled sentencing in April.
Coleman said in a news release that his office would pursue restitution for the people who lost money in the case.
“At the end of the day, white collar fraudsters are still just thieves preying on the trusting,” Coleman said.