MILWAUKEE (WITI) -- It is a $36 million ripoff that hundreds of people fell for -- and in this case, the con artists knew exactly how to outsmart their victims.
Video shows Gary Milby pitching his company -- Mid-America Oil and Gas to potential investors.
"I`ve been very blessed. The good Lord has taken care of me well. I make a lot of money, and have a lot of fun. We guarantee production. These wells that I`m offering you folks today are going to last longer than I`m going to live," Milby said in the video.
Milby provided a detailed prospectus, as well as what seemed like a strong argument for why investors should trust him.
"How many of those wells have productive? All of them? You`re batting 100%? That`s great. Yes sir. That sounds phenomenal in the oil business," Milby said in the video.
The man asking Milby that question was Robert Buchner -- a lawyer who had invested in similar projects with other companies.
"He basically guaranteed the wells would be productive and investors would make money," fraud victim Robert Buechner said.
Buechner was intrigued and did his due diligence including visiting the oil wells to see them firsthand -- and Buechner witnessed oil gushing out of the wells and was impressed.
"What we find is that they pumped that oil in and staged it for the investors to make an impression on them," U.S. Postal Inspector Roberta Bottoms said.
Milby, along with attorney Brian Kaufman lured more than 260 victims into this scam with total losses of more than $36 million.
"Brian Kaufman was the wizard in the Wizard of Oz movie. You pull back the curtain he was the one always pulling the strings," Bottoms said.
Inspectors found Kaufman was depositing investors' funds into accounts he and his family controlled. The money bought condos and luxury items.
"He bought a yacht that was named For Your Eyes Only. This yacht was purchased with investors funds and valued at 1.5 million dollars," Bottoms said.
Buechner says he did everything he could to research the investment. The problem is that the con artists in this case outsmarted the victims.
"This isn`t a case of inadequate due diligence done. The due diligence was flawed, because you didn`t get the right answers. I don`t know how you get right answers, when you ask the right questions when people purposely give you the wrong answers," Buechner said.
Kaufman and Milby were charged with eight counts of mail fraud and nine counts of wire fraud.
Milby was sentenced to 20 years in prison and Kaufman received 25.