KNOB LICK, Ky. (AP) — A federal bankruptcy judge has signed off on a $1.9 million settlement between a bankrupt oil company and its former CEO, who is due to report to federal prison soon.
The trustee for the defunct Young Oil and the one-time operator, Anthony Young, reached an agreement to end litigation over the company’s remaining assets and allegations that Young fraudulently transferred funds and equipment as the company went under.
U.S. Bankruptcy Judge Joan A. Lloyd approved the agreement submitted last week by both sides of the dispute.
Young has been sentenced to 33 months in federal prison for scamming investors into giving him money for three oil partnerships in Kentucky and Tennessee. He has not yet reported to a federal prison to serve his time.
The charges in three separate cases say Young coerced investors in several states to send him money to help offset the cost of drilling wells. Prosecutors say the money went for other items, but not wells.
The settlement covers allegations that Young used four companies to defraud investors. As part of the agreement, Young’s daughters will have to pay $10,000 each in two installments of $5,000 to settle claims against them.
Young ran Young Oil Corp. as it collapsed into bankruptcy in 2009, two months before Franklin Circuit Court Judge Thomas Wingate concluded that the CEO and his company committed fraud and violated the Kentucky Securities Act.
The Kentucky Department of Financial Institutions sued Young Oil and froze its assets in 2008 after receiving investor complaints. Young Oil raised nearly $20 million from investors through the sale of 57 partnerships from 1997 through 2008. The federal bankruptcy case is pending.
