Investigators unravel one of the biggest scams in U.S. history
Scheme started with an urban legend that victims believed
Inspectors say it ranks as one of the all-time biggest scams in US history. The promise: A share in the millions of dollars made in an oil boom.
It actually all began in the 1900's when oil was discovered on Spindletop Hill in Texas, which was the first major gusher of the Texas oil boom. Investors at the time made millions of dollars.
Then, in the 1950's as time went by, a myth emerged alleging the government had stolen profits from Spindletop. Investigators say that's when Jewel Robbins entered the picture and began her pitch.
"What was an urban legend, that there was money that the government took that was not given back to the family," explained Kelly May with the Kentucky Department of Financial Institutions.
Robbins told distant heirs of the oil fortune she was willing to fight for what was believed to be "trillions of dollars" still owed to descendants. But May says Robbins didn't stop with getting heirs to invest.
"She got other people to help finance because she claimed it would take a lot of money to hire these lawyers to go through the court process in order to get the money back," explained May.
"In this scam, they would send out letters saying the money is coming, the money is coming, we need more donations to support this lawsuit," said Prosecutor Audrea Williams.
In fact, more than tens of thousands of families invested millions of dollars into what they thought was a legal battle over these oil royalties.
"In truth, it is an urban legend," said May. "There is no money that the government has pending or on hold or anywhere."
Several state and federal agencies, including the US Postal Inspection Service, began tracking Robbins and this case. They found no government conspiracy, simply greed.
"All of this money was going to her bank account to support herself and her various children, which was supposed to be part of the investment," said Williams.
Some families lost their life savings.
"The people who shamed them have already spent the money and done everything with the money. by the time they are prosecuted, all of the money is gone," said Williams. "Victims are out in the cold."
In 2009, 76-year old Jewell Robbins was sentenced to five years probation for violating securities laws related to the Spindletop oil case. She died this year at the age of 80.
In the nine months since her death, thousands of people have filed claims seeking a piece of her estate in return for the money they gave her in the Spindletop oil case.
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