Julian Petroleum Corporation
Massive Investment Fraud Case
CLASSIFICATION: Financial Crime
LOCATION
Los Angeles, California
TIME PERIOD
1923-1927
VICTIMS
40000 confirmed
Julian Petroleum Corporation, a Los Angeles-based oil company founded in 1923 by Courtney Chauncey ("C.C.") Julian, collapsed in 1927 due to large-scale fraud, defrauding over 40,000 investors of approximately $150 million. The company was under investigation by the California Corporations Commission for fraudulent sales promotions, and an audit revealed the unauthorized issuance of 4.2 million shares of stock. Key figures involved included C.C. Julian, who sold his interest in the company to S.C. Lewis and Jacob Berman in 1925, and stockbroker Ed Rosenberg. As of 1928, Lewis and Berman were acquitted of fraud charges, while District Attorney Asa Keyes was convicted of accepting bribes related to the case. C.C. Julian later faced charges in Oklahoma for conspiracy to defraud investors, ultimately fleeing to Shanghai, where he committed suicide in 1934. The case remains a significant example of financial fraud in early 20th-century America.
Courtney Chauncey ("C.C.") Julian is believed to have orchestrated a large-scale fraud scheme that involved the over-issuance of stock and the manipulation of financial pools from prominent investors. Some speculate that the involvement of influential figures like Cecil B. DeMille and Louis B. Mayer may have contributed to the lack of accountability faced by the company’s executives after the collapse. Additionally, there are theories that the investigation by the California Corporations Commission was insufficient due to corruption or collusion within the regulatory system.
The Rise and Fall of Julian Petroleum Corporation
In the vibrant and booming landscape of 1920s Los Angeles, the Julian Petroleum Corporation—affectionately known as "Julian Pete"—emerged as a beacon of opportunity and ambition. Founded in 1923 by the daring Courtney Chauncey "C.C." Julian, this oil company quickly captivated investors with promises of untold riches. Yet, as swiftly as it rose, Julian Pete crumbled amidst one of the largest financial frauds of the era, leaving a trail of ruined fortunes and scandal in its wake.
The Birth of a Dream
In 1923, C.C. Julian capitalized on his recent success in drilling for oil in Santa Fe Springs, California, by launching Julian Petroleum. With a flair for showmanship, Julian's advertisements boldly declared, "Widows and Orphans, This Is No Investment for You! ... My appeal is addressed to people who can legitimately afford to take a chance." This strategy quickly attracted a legion of investors eager to ride the wave of California's oil boom. However, the California Corporations Commission soon began scrutinizing these sales tactics for potential fraud.
A Shifting Tide
By 1925, the landscape began to shift. Julian sold his interest in the company for a hefty $500,000 to Sheridan C. (S.C.) Lewis and Jacob Berman, who also went by the alias Jack Bennett. Under new management, Julian Petroleum merged with the California-Eastern Oil Company the following year. But the merger concealed a brewing storm. An audit revealed that the company had issued a staggering 4,200,000 unauthorized shares of stock. The scandal broke wide open on May 5, 1927, when trading in Julian Petroleum was abruptly halted by the Los Angeles Stock Exchange.
In a desperate attempt to stabilize the company, financial pools were established with funds from 400 prominent local businessmen, including Hollywood moguls Cecil B. DeMille and Louis B. Mayer. These investors lent money to Julian Pete at exorbitant interest rates, hoping to ride out the crisis. However, many of them faced charges for violating state usury laws, though most charges were either dropped or ended in acquittal.
The Aftermath of Betrayal
As the dust settled, the judicial system began its work. In May 1928, S.C. Lewis, Jacob Berman, and stockbroker Ed Rosenberg were acquitted of charges related to the Julian Pete fraud. Yet, the drama was far from over. District Attorney Asa Keyes faced charges of accepting approximately $100,000 in bribes from Julian Petroleum officials, securing acquittals for the accused. Found guilty in February 1929, Keyes received a sentence of one to 14 years in prison, serving 19 months before receiving a pardon from Governor James Rolph. Buron Fitts, who had resigned as lieutenant governor to become the Los Angeles County District Attorney, took on the role of prosecutor in Keyes' trial.
The saga continued as S.C. Lewis and Jacob Berman faced further legal troubles. In November 1928, they were convicted and sentenced to seven years in prison for their involvement in selling nearly $1 million in gold bonds of the Lewis Oil Company.
The Tragic End of C.C. Julian
The web of deceit finally ensnared its original architect. In 1931, C.C. Julian was charged in Oklahoma with conspiracy to defraud investors of $3.5 million. Facing a grim legal battle, Julian chose flight over fight. Jumping bail, he fled to Shanghai, China, where the weight of his actions ultimately led him to suicide in March 1934.
A Deadly Courtroom Drama
The Julian Pete affair claimed another life in a shocking courtroom incident. In July 1930, financier Motley H. Flint was fatally shot by machinist Frank D. Keaton, who blamed Flint for his $35,000 loss in Julian Pete stock. Flint, a former vice-president of the Pacific Southwest Trust and Savings Bank, had faced several indictments, but charges were frequently dropped or resulted in acquittals. He was due to stand trial on another indictment when he was killed.
Sources
- Los Angeles Times - "What a money-gusher"
- Nassau Daily Review - June 25, 1927
- "Financing California Real Estate: Spanish Missions to subprime mortgages" by Lynne P. Doti
- "My First Forty Years In California Politics 1922 - 1962" by Robert V. Keitny - Oral History Program University of California Los Angeles
- Los Angeles Times - "Motley's Crew Bilked Investors in Oil Stock Scandal"
For further reading, explore Jules Tygiel's "The Great Los Angeles Swindle: Oil, Stocks, and Scandal During the Roaring Twenties," William Gardiner Hutson's "My Friends Call Me C.C.," and other works detailing this turbulent chapter in financial history.
Wikipedia URL: Julian Petroleum Corporation
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
Loading comments...
Company Founded
Julian Petroleum Corporation is founded by C.C. Julian in Los Angeles.
Ownership Change
C.C. Julian sells his interest in the company to S.C. Lewis and Jacob Berman for $500,000.
Merger
Julian Petroleum merges with California-Eastern Oil Company.
Trading Halted
Los Angeles Stock Exchange halts trading in Julian Petroleum after an audit reveals fraud.
Acquittal of Officials
S.C. Lewis, Jacob Berman, and Ed Rosenberg are acquitted of charges related to the fraud.
DA Convicted
District Attorney Asa Keyes is found guilty of accepting bribes related to the Julian Petroleum case.
C.C. Julian Charged
C.C. Julian faces charges in Oklahoma for conspiracy to defraud investors of $3.5 million.
C.C. Julian's Death
C.C. Julian commits suicide in Shanghai, China after jumping bail.
Financier Murdered
Financier Motley H. Flint is shot and killed in a courtroom by Frank D. Keaton over Julian Petroleum losses.
Julian Petroleum Corporation, a Los Angeles-based oil company founded in 1923 by Courtney Chauncey ("C.C.") Julian, collapsed in 1927 due to large-scale fraud, defrauding over 40,000 investors of approximately $150 million. The company was under investigation by the California Corporations Commission for fraudulent sales promotions, and an audit revealed the unauthorized issuance of 4.2 million shares of stock. Key figures involved included C.C. Julian, who sold his interest in the company to S.C. Lewis and Jacob Berman in 1925, and stockbroker Ed Rosenberg. As of 1928, Lewis and Berman were acquitted of fraud charges, while District Attorney Asa Keyes was convicted of accepting bribes related to the case. C.C. Julian later faced charges in Oklahoma for conspiracy to defraud investors, ultimately fleeing to Shanghai, where he committed suicide in 1934. The case remains a significant example of financial fraud in early 20th-century America.
Courtney Chauncey ("C.C.") Julian is believed to have orchestrated a large-scale fraud scheme that involved the over-issuance of stock and the manipulation of financial pools from prominent investors. Some speculate that the involvement of influential figures like Cecil B. DeMille and Louis B. Mayer may have contributed to the lack of accountability faced by the company’s executives after the collapse. Additionally, there are theories that the investigation by the California Corporations Commission was insufficient due to corruption or collusion within the regulatory system.
The Rise and Fall of Julian Petroleum Corporation
In the vibrant and booming landscape of 1920s Los Angeles, the Julian Petroleum Corporation—affectionately known as "Julian Pete"—emerged as a beacon of opportunity and ambition. Founded in 1923 by the daring Courtney Chauncey "C.C." Julian, this oil company quickly captivated investors with promises of untold riches. Yet, as swiftly as it rose, Julian Pete crumbled amidst one of the largest financial frauds of the era, leaving a trail of ruined fortunes and scandal in its wake.
The Birth of a Dream
In 1923, C.C. Julian capitalized on his recent success in drilling for oil in Santa Fe Springs, California, by launching Julian Petroleum. With a flair for showmanship, Julian's advertisements boldly declared, "Widows and Orphans, This Is No Investment for You! ... My appeal is addressed to people who can legitimately afford to take a chance." This strategy quickly attracted a legion of investors eager to ride the wave of California's oil boom. However, the California Corporations Commission soon began scrutinizing these sales tactics for potential fraud.
A Shifting Tide
By 1925, the landscape began to shift. Julian sold his interest in the company for a hefty $500,000 to Sheridan C. (S.C.) Lewis and Jacob Berman, who also went by the alias Jack Bennett. Under new management, Julian Petroleum merged with the California-Eastern Oil Company the following year. But the merger concealed a brewing storm. An audit revealed that the company had issued a staggering 4,200,000 unauthorized shares of stock. The scandal broke wide open on May 5, 1927, when trading in Julian Petroleum was abruptly halted by the Los Angeles Stock Exchange.
In a desperate attempt to stabilize the company, financial pools were established with funds from 400 prominent local businessmen, including Hollywood moguls Cecil B. DeMille and Louis B. Mayer. These investors lent money to Julian Pete at exorbitant interest rates, hoping to ride out the crisis. However, many of them faced charges for violating state usury laws, though most charges were either dropped or ended in acquittal.
The Aftermath of Betrayal
As the dust settled, the judicial system began its work. In May 1928, S.C. Lewis, Jacob Berman, and stockbroker Ed Rosenberg were acquitted of charges related to the Julian Pete fraud. Yet, the drama was far from over. District Attorney Asa Keyes faced charges of accepting approximately $100,000 in bribes from Julian Petroleum officials, securing acquittals for the accused. Found guilty in February 1929, Keyes received a sentence of one to 14 years in prison, serving 19 months before receiving a pardon from Governor James Rolph. Buron Fitts, who had resigned as lieutenant governor to become the Los Angeles County District Attorney, took on the role of prosecutor in Keyes' trial.
The saga continued as S.C. Lewis and Jacob Berman faced further legal troubles. In November 1928, they were convicted and sentenced to seven years in prison for their involvement in selling nearly $1 million in gold bonds of the Lewis Oil Company.
The Tragic End of C.C. Julian
The web of deceit finally ensnared its original architect. In 1931, C.C. Julian was charged in Oklahoma with conspiracy to defraud investors of $3.5 million. Facing a grim legal battle, Julian chose flight over fight. Jumping bail, he fled to Shanghai, China, where the weight of his actions ultimately led him to suicide in March 1934.
A Deadly Courtroom Drama
The Julian Pete affair claimed another life in a shocking courtroom incident. In July 1930, financier Motley H. Flint was fatally shot by machinist Frank D. Keaton, who blamed Flint for his $35,000 loss in Julian Pete stock. Flint, a former vice-president of the Pacific Southwest Trust and Savings Bank, had faced several indictments, but charges were frequently dropped or resulted in acquittals. He was due to stand trial on another indictment when he was killed.
Sources
- Los Angeles Times - "What a money-gusher"
- Nassau Daily Review - June 25, 1927
- "Financing California Real Estate: Spanish Missions to subprime mortgages" by Lynne P. Doti
- "My First Forty Years In California Politics 1922 - 1962" by Robert V. Keitny - Oral History Program University of California Los Angeles
- Los Angeles Times - "Motley's Crew Bilked Investors in Oil Stock Scandal"
For further reading, explore Jules Tygiel's "The Great Los Angeles Swindle: Oil, Stocks, and Scandal During the Roaring Twenties," William Gardiner Hutson's "My Friends Call Me C.C.," and other works detailing this turbulent chapter in financial history.
Wikipedia URL: Julian Petroleum Corporation
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
Loading comments...
Company Founded
Julian Petroleum Corporation is founded by C.C. Julian in Los Angeles.
Ownership Change
C.C. Julian sells his interest in the company to S.C. Lewis and Jacob Berman for $500,000.
Merger
Julian Petroleum merges with California-Eastern Oil Company.
Trading Halted
Los Angeles Stock Exchange halts trading in Julian Petroleum after an audit reveals fraud.
Acquittal of Officials
S.C. Lewis, Jacob Berman, and Ed Rosenberg are acquitted of charges related to the fraud.
DA Convicted
District Attorney Asa Keyes is found guilty of accepting bribes related to the Julian Petroleum case.
C.C. Julian Charged
C.C. Julian faces charges in Oklahoma for conspiracy to defraud investors of $3.5 million.
C.C. Julian's Death
C.C. Julian commits suicide in Shanghai, China after jumping bail.
Financier Murdered
Financier Motley H. Flint is shot and killed in a courtroom by Frank D. Keaton over Julian Petroleum losses.