FBI Launches Investigation into Oil Investments of Former Primera Energy CEO
The Federal Bureau of Investigation recently opened a criminal investigation into Brian Alfaro, an oil and gas businessman in San Antonio, Texas. The investigation began in response to a civil lawsuit accusing Alfaro of defrauding 30 oil well investors in Eagle Ford Shale.
In a US bankruptcy court proceeding recently, Alfaro’s attorney stated he had been informed by an FBI agent about the launch of the investigation. During the hearing, the judge had denied Alfaro’s request to arbitrate his bankruptcy rather than litigate claims made against him by the 30 investors. Those investors allege Alfaro defrauded them in various oil well investments in recent years.
The judge ruled Alfaro doesn’t have standing to enforce the arbitration clause that was in the original contract signed by the investors. The contract agreements were signed by Alfaro when he was president of Primera Energy, LLC. That company filed for Chapter 11 bankruptcy protection in June after investors filed the civil lawsuit. Because Alfaro signed the agreements as a representative of the company and not as an individual, he is not allowed to enforce the arbitration clause now, as an individual.
The Chapter 11 trustee of Primera’s bankruptcy indicated recently he did not intend for the company to arbitrate investors’ claims. The lawsuit was filed by the investors in Bexar County District Court, but was later transferred to bankruptcy court by Alfaro’s attorneys. The suit is against Primera and Alfaro’s other companies, alleging the investors are victims of a Ponzi scheme or pyramid scheme and were paid from money given by later investors, not from profits.