Claim that US oil firm 'misled' Irish investors
Backers may never see their money again, insist promoters of scheme
THE Irish promoters of an oil investment "opportunity" have acknowledged that investors may never get their money back and claimed they were "grossly misled" by the US company behind the scheme.
Dozens of Irish people are believed to have ploughed tens of thousands of euro into the Oklahoma oil fund after the scheme was promoted by a Clontarf-based firm, Black Gold. Irish investors were promised a monthly return on their initial outlay.
But the payments stalled after the FBI and US tax authorities launched an investigation into the American company behind the scheme, Armadillo Energy.
American investigators interviewed Irish investors in the presence of the garda late last year.
In a letter to investors last month, Irish promoters Black Gold claimed that it "had been misled from day one" by the US firm and "deeply regretted" having any dealings with it.
It said it was repeatedly assured by Armadillo Energy that investors would get paid, but despite repeated assurances, the money never materialised.
"Month after month we were given deadlines for when payments would resume.
"As you are only too aware, these deadlines came and went and no payments were made," the letter said.
"Whilst we would like nothing more than for Black Gold clients to be refunded by Armadillo, we have absolutely no faith whatsoever in their capacity or commitment to do so."
The letter suggested that the only chance investors had of getting anything back was in the event of the assets of the company being distributed.
"Unfortunately, we believe that this is the only realistic hope our clients have in having any of their original investment refunded," it said.
Black Gold said "our clients' investments are now in complete jeopardy" but promised to "continue to work" on their behalf until the matter is resolved.
Armadillo has described the investigation into its affairs as a "routine" tax investigation and blamed the delayed payments on the delays in extracting oil from the oil fields.
They also promised that quarterly payments would be made.
Irish investors, who didn't want their identities revealed, said the Irish promoters hailed the scheme as an excellent investment opportunity at numerous presentations.
The oil fund promised "potentially unlimited" returns on an initial investment of $55,000 (€43,000). The monthly repayments faltered but the investors were repeatedly reassured by Black Gold that the payments would resume in time.
Then late last year, investors were told by letter that the FBI and the Internal Revenue Service were investigating Armadillo, and agents wanted to interview them.
It is believed that Black Gold is not implicated in any way in the investigation.
The company has been assisting the US authorities with their inquiries there and is working to help investors who are due payment.