A statewide grand jury indicted Robert Allen Zickefoose of Colorado Springs last month on seven counts of securities fraud and theft for selling unregistered oil and gas investments in Adams County.
According to a press release issued Monday from the Colorado Attorney General's office, Zickefoose allegedly defrauded investors of $3.2 million, mostly raised through "cold calls" to people in Colorado Springs and other locations.
Zickefoose, 48, sole owner and president of Springs-based Zickefoose Reserves LLC, allegedly sold interests through that company and Choice Energy Group LLC to at least 14 investors from 2009 to 2011 in two wells called Ruby #1 and Ruby #2 in the Wattenberg field of Adams County. The interests entitled investors to 45 percent of the profits from the wells' production, but he never owned or acquired the interests he was selling. The wells were owned by Star Ryder Energy LLC, a company based in Sedalia and set up by Kenneth Clark.
Instead, Zickefoose allegedly spent most of the money he raised on personal expenses, cash withdrawals and payments to employees. The attorney general's office said he also used the money to repay some past investors and cover other expenses unrelated to the two wells.
Zickefoose Reserves was organized by Robert Zickefoose in 2009 and voluntarily dissolved in December. Choice Energy was set up in 2011. The Colorado Division of Securities began investigating Zickefoose in 2011 based on a call made to a Colorado investor by a Choice Energy representative. Zickefoose was ordered by Denver District Court Judge Herbert Stern III in October to provide sworn testimony in connection with the probe after he repeatedly failed to show up for appointments with division investigators.
Zickefoose faces up to 12 years in prison on each count. He was arrested June 17 and remains in the El Paso County Criminal Justice Center with a $500,000 bond and is scheduled to enter a plea Monday during a hearing before 4th Judicial District Judge Thomas Kennedy.
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