United States v. Van Alstyne

FACTS AND PROCEDURAL BACKGROUND

Van Alstyne defrauded approximately 450 victims through a Ponzi scheme involving a number of companies that he organized for that purpose. The fraudulent scheme, begun in 1992, was built around thirteen oil and gas limited partner- ships. These partnerships, LEM Pacific Income Fund I-IV, Sandstone Gas Fund I-V, and American Gas Fund I-IV, were controlled by Van Alstyne. Other companies he owned or controlled, Liberty Energy Management and Sabre Asset Management, served as the general partners for the limited partnerships. Continental Mineral Acquisitions and Blake Energy Corporation, two acquisition companies also owned by Van Alstyne, purchased oil and gas properties on behalf of the limited partnerships.

Van Alstyne perpetuated the scheme by selling interests in the limited partnerships to elderly and retired investors. Vic- tims were solicited by brokers from Coastline Financial and Merchant Banking Services, both of which were, at the time, broker/dealers registered with the National Association of Securities Dealers (NASD).1 Van Alstyne required the brokers to adhere to a script that described a safe investment with a more than ten percent…