Bismarck ND, June 16, 2015
North Dakota Securities Commissioner Karen Tyler has ordered Paul De Bastos and North Dakota Bakken Connection LLC (NDBC) to Cease and Desist from selling unregistered securities, acting as an unregistered broker-dealer or agent, and engaging in fraudulent practices in connection with the offer and sale of securities. De Bastos and NDBC allegedly sold investments in man camp housing developments in the Bakken oil field region of North Dakota and Montana on behalf of North Dakota Developments LLC.
On May 5, 2015 Commissioner Tyler issued a Cease and Desist order against North Dakota Developments LLC, and its principals Robert L. Gavin and Daniel J. Hogan. The Securities and Exchange Commission also took action, filing in US District Court for the District of North Dakota a Complaint and Emergency Motion for a Temporary Restraining Order.
Investors in the fraudulent scheme were sold interests in six different housing developments in Western North Dakota and Eastern Montana: Great American Lodge Watford West, Great American Lodge Watford East (AKA McKenzie Crossing), Great American Lodge Montana (Culbertson, MT), Transhudson Hotel (Parshall, ND), Transhudson Apartments Williston Heights, and Bakken Base Camp.
Investigative records indicate 980 investors from 66 countries invested over $62 million through Gavin, Hogan and sales agents located in the United States and several other countries.
Between 2013 and 2015 De Bastos and NDBC allegedly offered for sale or sold investments in North Dakota Developments, earning commissions of over $1,000,000 on the sales.
Red flags of fraud in oil and gas and real estate related investments include but are not limited to: promise of a high, guaranteed return; promise of a guaranteed investment buy-back; high pressure sales tactics; unsubstantiated claims by the promoter of extensive industry expertise, unsubstantiated claims of success in previous projects; resistance to providing offering documents, lack of substantive information in offering documents, and claims or warnings that there is no need for investors to contact regulators.
Contact the North Dakota Securities Department before making any investment to determine if a securities offering is appropriately registered or exempted, and if the promoter/solicitor is appropriately registered or has a regulatory or criminal history.
Michael Daley, Deputy Commissioner/Attorney
Kelly Mathias, Examinations and Investigations Supervisor
ND Securities Department
600 East Boulevard Avenue State Capitol, 5th Floor
Bismarck, ND 58505-0510
Phone: (701)-328-2910
Toll Free: (800)-297-5124
Fax: (701)-328-2946
Email: ndsecurities@nd.gov