James Dean French was sentenced to eight years in state prison on June 4 after pleading guilty to first-degree felony securities fraud in connection with the sale of investments in a purported West Texas oil and gas project.
French was sentenced in the 230th State District Court of Harris County, the home to the two largest investors in the project. French is from Kennedale, in Tarrant County.
As a condition of his eventual parole French was also ordered to pay $520,652 in restitution to investors in the drilling project.
The Harris County District Attorney’s Office prosecuted French with the assistance of the Enforcement Division of the Texas State Securities Board.
French sold interests in an oil and gas drilling enterprise in Jones County called the Swede Church Development Project. He told investors their money would be used to drill two news wells and extract oil from two existing wells.
French did not disclose what he did with the money from investors in a previous oil and gas project. He spent those investor funds to buy a house and pay for other personal expenses.
French also failed to disclose that the IRS had filed a lien against him in Tarrant County in the amount of $655,827.
The Texas Securities Commissioner in 2014 entered an Emergency Cease and Desist Order against French, finding that he sold unregistered securities and did not disclose the IRS lien and other legal and regulatory problems.