Department of Financial Institutions
Lexington Attorney Sentenced to 25 Years for Multi-Million Dollar Investment Scam

Press Release Date:  Wednesday, May 02, 2012  
Contact Information:  Kelly May, Public Information Officer
502-573-3390 x252
800-223-2579 x252
kelly.may@ky.gov
 


The following press release was issued by the Office of the United States Attorney Eastern District of Kentucky. The Kentucky Department of Financial Institutions (DFI) assisted in the investigation. The Office of the U.S. Attorney is prosecuting the case.

* * * * * * *

Lexington Attorney Sentenced to 25 Years for Multi-Million Dollar Investment Scam

   LEXINGTON — A Lexington attorney, who helped others defraud hundreds of people out of millions of dollars as part of a nationwide and international investment scam, was sentenced today to 25 years in prison.

   U.S. District Court Judge Karen Caldwell sentenced Bryan S. Coffman, 48, for multiple counts of mail fraud, wire fraud, securities fraud, money laundering and conspiracy. Judge Caldwell also ordered Coffman and co-defendant Gary M. Milby to pay full restitution in excess of $36 million.

   From 2004 through 2008, Milby, of Campbellsville, Ky., and Victor Tsatskin of Canada, solicited $36 million from approximately 600 corporate and individual investors across the nation and Canada. Milby and Tsatskin told investors a series of lies, bogus predictions and guarantees about potential profits of oil and gas well drilling programs.

   Coffman provided legal and business advice with knowledge of the investment scheme. He helped hide the scam from investigators. Judge Caldwell said that Coffman used his skill and knowledge of the law to break the law. She also described Coffman’s criminal conduct as predatory.

   Court documents state that Coffman laundered money through companies named Mid-America Energy, Inc. and Global Energy Group. In order to avoid detection, Coffman provided false testimony to investigators, moved company operations to Canada and the Bahamas, moved assets into his wife’s name and sent money to foreign bank accounts.

   Coffman used investors’ money to buy a yacht and a condominium in South Carolina. He also deposited millions of investors’ money into multiple bank accounts in the U.S. and abroad.

   Last week, Judge Caldwell ordered Coffman to forfeit his interest in these assets to the U.S. Government. Coffman made efforts to prevent law enforcement from locating his assets that could be used as restitution for victims according to a sentencing memorandum filed by the U.S. Attorney’s Office.

   Many of the victims in this case wrote letters to the court describing the impact of losing their investments. Some say it led to divorces, major health problems such as strokes, foreclosures on their homes and the inability to fund a college education for their children.

   Last May, a jury convicted Coffman of the offenses.

   Testimony at the trial showed that Milby falsely guaranteed the successful production of oil, telling investors to anticipate thousands of dollars of income per month from their investment and that the wells could produce commercial quantities of oil for 10 to 20 years.

   Milby will be sentenced for his role in the scheme tomorrow. Tstatskin is serving a prison sentence in Canada.

   Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Dugan Wong, Postal Inspector in Charge, United States Postal Inspection Service, Charles A. Vice, Commissioner of The Commonwealth of Kentucky Department of Financial Institutions, Division of Securities, and Paul R. Johnson, Special Agent in Charge, United States Secret Service, jointly made the announcement after the jury returned its verdict.

   The investigation preceding the indictment was conducted by the United States Postal Inspection Service, The Commonwealth of Kentucky Department of Financial Institutions, Division of Securities, and the United States Secret Service. The U.S. Attorney’s Office was represented by Ken Taylor, Robert Duncan and Wade Napier.

###

Originally released May 2, 2012

By Office of U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky
www.usdoj.gov/usao/kye
Contact: Kyle Edelen
859-685-4811
Kyle.Edelen@usdoj.gov