Hermilia Flores and David Alan Shand were indicted Feb. 16 in the 178th District Court of Harris County on charges of securities fraud and money laundering for allegedly defrauding investors in oil and natural gas exploration and drilling projects.
Flores, a resident of Katy, was the sole manager of Wolfpack Oil Co. of Houston, which allegedly sold interests in oil and gas leases and investment contract to investors between December 2015 and October 2017. Shand is a former sales agent of the company.
Both defendants have criminal histories.
Flores pleaded guilty to theft in May 2011 in Harris County State District Court. She was sentenced to five years deferred adjudication and ordered to pay restitution of $20,690.
In 2012, Flores was ordered to pay damages of $25,390 in civil suit in Harris County that alleged theft and breach of fiduciary duty.
Flores did not disclose those cases to investors, according to the indictment. Nor did she inform investors that Shand was convicted multiple times for criminal offenses in state and federal courts.
The indictment alleges that Flores, instead of using investor funds to drill for oil and gas, paid her personal expenses and made payments to previous investors in Wolfpack Oil projects in a Ponzi scheme.