Home-Stake Production Company
Oil and Gas Ponzi Scheme
CLASSIFICATION: Financial Crime
LOCATION
Tulsa, Oklahoma
TIME PERIOD
1970s
VICTIMS
2000 confirmed
Home-Stake Production Company, founded in 1955 by Robert S. Trippet in Tulsa, Oklahoma, was implicated in a fraudulent oil and gas tax-shelter scheme that resulted in over $100 million in losses for more than 2,000 investors, including notable figures from entertainment and politics. The scheme involved misleading financial statements and the use of funds from new investors to pay returns to earlier investors, resembling a Ponzi scheme. The fraudulent activities were exposed on June 26, 1974, by The Wall Street Journal, leading to the company's bankruptcy in September 1973 and subsequent criminal charges against 13 officers in December 1974 for conspiracy, mail fraud, and stock fraud. In 1976, Trippet and two associates received probation and fines after pleading no contest, while investor lawsuits, certified as a class action in 1976, continued for decades before finally settling in 1996.
The Home-Stake Production Company is believed to have used deceptive practices such as painting irrigation pipes to mislead investors about the existence of oil pipelines. There is speculation that the scale of the fraud was exacerbated by the involvement of high-profile individuals, leading to a belief that the company may have received less scrutiny due to its connections. Additionally, some theorize that the Ponzi scheme's collapse was hastened by the growing number of investors demanding returns as the company struggled to maintain its façade of profitability.
The Home-Stake Production Company Swindle
The Birth of a Deceptive Enterprise
In 1955, an attorney named Robert S. Trippet laid the foundation for what would become one of the largest financial deceptions of the 1970s. From Tulsa, Oklahoma, he launched the Home-Stake Production Company, ostensibly to develop oil and gas properties. Yet, from its inception, the company was built on deceit. While it promised lucrative returns from its oil and gas ventures, it produced little more than illusions. Employees went so far as to paint farmers' water irrigation pipes to masquerade as oil pipelines, fooling potential investors into believing in the company's nonexistent oil wells.
The deception was not limited to physical tricks. The company distributed fraudulent financial statements to investors and the Securities and Exchange Commission (SEC). The so-called profits shared with early investors were merely funds from newer investors, a classic hallmark of a Ponzi scheme.
The Unraveling of a Grand Illusion
By the early 1970s, over 2,000 individuals had poured their money into Home-Stake's tax-shelter schemes. On June 26, 1974, The Wall Street Journal shattered the facade with an exposé that labeled it possibly "the biggest swindle of its kind in history." The list of victims read like a who's who of the entertainment, business, and political worlds.
Among the entertainment elite were Andy Williams, who invested $538,000 (equivalent to $3.4 million today), Walter Matthau with $200,000, and Jack Benny and David Cassidy, both contributing $300,000 each. Other celebrities like Buddy Hackett ($208,000), Liza Minnelli ($231,000), Candice Bergen ($125,000), Bob Dylan ($78,000), and Barbra Streisand ($28,500) were also ensnared. Political figures didn't escape the net either, with Senators Jacob Javits and Ernest Hollings among the duped. High-profile investors extended to financial writer George Goodman, executives from Citibank, General Electric, Western Union, and American Express. The SEC also identified other celebrities such as Alan Alda ($145,000), Ed Ames ($122,500), Bobbie Gentry ($98,000), Barbara Walters, and Phyllis Diller.
Legal Consequences and Aftermath
The house of cards began to crumble when the company filed for bankruptcy in September 1973. By December 1974, the legal system had zeroed in on the perpetrators. Thirteen officers and associates faced charges of conspiracy, mail fraud, and stock fraud. In a 1976 courtroom development, Robert S. Trippet and two top officials entered no contest pleas. Their punishment was a single night in jail, probation, and a modest fine for Trippet of $19,000—a paltry sum compared to the vast sums they had siphoned off.
Litigation against the company began in earnest in 1973, eventually evolving into a class action lawsuit by 1976. However, justice moved at a glacial pace, with the legal battle stretching into decades. It wasn't until 1996 that a settlement was finally reached, drawing a line under an odyssey of fraud and broken dreams.
Sources
- "Swindle Catches Bigwigs", Associated Press report in Garden City (KS) Telegram, June 26, 1974.
- "Top Stars, Executives Reported Victims of $100 Million Swindle". Los Angeles Times, June 27, 1974.
- "SEC News Digest May 15, 1974".
- "Indictment Names 13 at Home-Stake New York Times December 13, 1974". The New York Times.
- "13 Indicted in Oil Swindle". The Prescott Courier.
- Tuttle, Ray. "Home-Stake Sides Settle // Oil Fraud Case Dates to '73". Tulsa World, October 29, 1996.
- Brown, Wesley. "Home-Stake Lawyers Awarded $5.8 Million". Tulsa World, July 26, 1997.
For further reading, consider David McClintick's "Stealing From the Rich: The Home-Stake Oil Swindle" for a comprehensive account of this infamous case.
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Company Founded
Home-Stake Production Company founded by Robert S. Trippet in Tulsa, Oklahoma.
Bankruptcy Filed
Home-Stake Production Company filed for bankruptcy, revealing financial troubles.
Lawsuits Filed
Initial lawsuits by investors were filed against Home-Stake Production Company.
Fraud Exposed
The Wall Street Journal reported on the Home-Stake fraud, calling it a major swindle.
Indictments Issued
Thirteen officers and associates of Home-Stake were charged with conspiracy and fraud.
Plea Agreements
Robert S. Trippet and two officials pleaded no contest, receiving probation and fines.
Class Action Certified
The lawsuits against Home-Stake were certified as a class action lawsuit.
Case Settled
The litigation involving Home-Stake Production Company was finally settled.
Home-Stake Production Company, founded in 1955 by Robert S. Trippet in Tulsa, Oklahoma, was implicated in a fraudulent oil and gas tax-shelter scheme that resulted in over $100 million in losses for more than 2,000 investors, including notable figures from entertainment and politics. The scheme involved misleading financial statements and the use of funds from new investors to pay returns to earlier investors, resembling a Ponzi scheme. The fraudulent activities were exposed on June 26, 1974, by The Wall Street Journal, leading to the company's bankruptcy in September 1973 and subsequent criminal charges against 13 officers in December 1974 for conspiracy, mail fraud, and stock fraud. In 1976, Trippet and two associates received probation and fines after pleading no contest, while investor lawsuits, certified as a class action in 1976, continued for decades before finally settling in 1996.
The Home-Stake Production Company is believed to have used deceptive practices such as painting irrigation pipes to mislead investors about the existence of oil pipelines. There is speculation that the scale of the fraud was exacerbated by the involvement of high-profile individuals, leading to a belief that the company may have received less scrutiny due to its connections. Additionally, some theorize that the Ponzi scheme's collapse was hastened by the growing number of investors demanding returns as the company struggled to maintain its façade of profitability.
The Home-Stake Production Company Swindle
The Birth of a Deceptive Enterprise
In 1955, an attorney named Robert S. Trippet laid the foundation for what would become one of the largest financial deceptions of the 1970s. From Tulsa, Oklahoma, he launched the Home-Stake Production Company, ostensibly to develop oil and gas properties. Yet, from its inception, the company was built on deceit. While it promised lucrative returns from its oil and gas ventures, it produced little more than illusions. Employees went so far as to paint farmers' water irrigation pipes to masquerade as oil pipelines, fooling potential investors into believing in the company's nonexistent oil wells.
The deception was not limited to physical tricks. The company distributed fraudulent financial statements to investors and the Securities and Exchange Commission (SEC). The so-called profits shared with early investors were merely funds from newer investors, a classic hallmark of a Ponzi scheme.
The Unraveling of a Grand Illusion
By the early 1970s, over 2,000 individuals had poured their money into Home-Stake's tax-shelter schemes. On June 26, 1974, The Wall Street Journal shattered the facade with an exposé that labeled it possibly "the biggest swindle of its kind in history." The list of victims read like a who's who of the entertainment, business, and political worlds.
Among the entertainment elite were Andy Williams, who invested $538,000 (equivalent to $3.4 million today), Walter Matthau with $200,000, and Jack Benny and David Cassidy, both contributing $300,000 each. Other celebrities like Buddy Hackett ($208,000), Liza Minnelli ($231,000), Candice Bergen ($125,000), Bob Dylan ($78,000), and Barbra Streisand ($28,500) were also ensnared. Political figures didn't escape the net either, with Senators Jacob Javits and Ernest Hollings among the duped. High-profile investors extended to financial writer George Goodman, executives from Citibank, General Electric, Western Union, and American Express. The SEC also identified other celebrities such as Alan Alda ($145,000), Ed Ames ($122,500), Bobbie Gentry ($98,000), Barbara Walters, and Phyllis Diller.
Legal Consequences and Aftermath
The house of cards began to crumble when the company filed for bankruptcy in September 1973. By December 1974, the legal system had zeroed in on the perpetrators. Thirteen officers and associates faced charges of conspiracy, mail fraud, and stock fraud. In a 1976 courtroom development, Robert S. Trippet and two top officials entered no contest pleas. Their punishment was a single night in jail, probation, and a modest fine for Trippet of $19,000—a paltry sum compared to the vast sums they had siphoned off.
Litigation against the company began in earnest in 1973, eventually evolving into a class action lawsuit by 1976. However, justice moved at a glacial pace, with the legal battle stretching into decades. It wasn't until 1996 that a settlement was finally reached, drawing a line under an odyssey of fraud and broken dreams.
Sources
- "Swindle Catches Bigwigs", Associated Press report in Garden City (KS) Telegram, June 26, 1974.
- "Top Stars, Executives Reported Victims of $100 Million Swindle". Los Angeles Times, June 27, 1974.
- "SEC News Digest May 15, 1974".
- "Indictment Names 13 at Home-Stake New York Times December 13, 1974". The New York Times.
- "13 Indicted in Oil Swindle". The Prescott Courier.
- Tuttle, Ray. "Home-Stake Sides Settle // Oil Fraud Case Dates to '73". Tulsa World, October 29, 1996.
- Brown, Wesley. "Home-Stake Lawyers Awarded $5.8 Million". Tulsa World, July 26, 1997.
For further reading, consider David McClintick's "Stealing From the Rich: The Home-Stake Oil Swindle" for a comprehensive account of this infamous case.
No Recent News
No recent news articles found for this case. Check back later for updates.
No Evidence Submitted
No evidence found for this case. Be the first to submit evidence in the comments below.
Join the discussion
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Company Founded
Home-Stake Production Company founded by Robert S. Trippet in Tulsa, Oklahoma.
Bankruptcy Filed
Home-Stake Production Company filed for bankruptcy, revealing financial troubles.
Lawsuits Filed
Initial lawsuits by investors were filed against Home-Stake Production Company.
Fraud Exposed
The Wall Street Journal reported on the Home-Stake fraud, calling it a major swindle.
Indictments Issued
Thirteen officers and associates of Home-Stake were charged with conspiracy and fraud.
Plea Agreements
Robert S. Trippet and two officials pleaded no contest, receiving probation and fines.
Class Action Certified
The lawsuits against Home-Stake were certified as a class action lawsuit.
Case Settled
The litigation involving Home-Stake Production Company was finally settled.