Louisville man under investigation for Madoff-like schemes



Posted on June 29, 2009 at 11:57 PM

Updated Thursday, Oct 15 at 3:47 PM

(WHAS11) - In the wake of Madoff's sentencing, a Louisville man accused of defrauding hundreds of investors of tens-of-millions of dollars will likely plead guilty to fraud and tax evasion charges.

David G. Rose, who has been under investigation for nearly five years in connection with his oil and natural gas businesses is expected to enter the plea in federal court next week.

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11 at 11's investigative reporter Adam Walser spoke with one of his victims and a former employee about the alleged scheme.

The lure of black gold was enough to convince hundreds of potential investors to hand tens-of-millions of dollars to David Rose and his companies.

After all, Rose made Madoff-like claims of 50% returns.

Rick Wimp, whose family owns this Corydon Service Station, says his dad bet his retirement on enTerra, LLC, Rose's oil and gas futures company.

"It was almost 300-thousand dollars he invested with 33 units in 3 different projects," said Wimp.

But the promised profits never gushed in.

Instead, Wimp's investment brought in a mere $20,000, something the feds say happened to more than 200 investors.

"This well was dry. This well was pulling salt water. We had to cap it," said Wimp. "I could go out here, dig 33 holes and probably find more oil and gas than they did."

Another man, we'll call him "Bob" used to sell Rose's unregistered securities to unsuspecting investors nationwide.

"You've got to be a heck of a salesman. But you've got to be willing to mislead people too. And you couldn't do that anymore? I couldn't do it anymore," said the former Rose employee.

Rose's companies have been under investigation since 2001. This raid by the FBI on Rose's Louisville headquarters came in 2004.

Each of the salespeople was issued scripts like the one that Bob smuggled out of the operation.

"They would say that the well's come in and that everything looks like it's gonna be good. As time went on there was nothing. There's no pot of gold at the end of the rainbow."

Rick Wimp went looking for his dad's enTerra contact after learning he moved to this building in New Albany.

"There was no enTerra Energy paperwork at all around anywhere. They were pushing a new product, Lux Petroleum. There were hundreds of pamphlets to be mailed out," said Wimp.

WHAS11 dropped by unannounced Monday and employees ran from our cameras. There was no sign and no one would have known a business was there were it not for the BMWs, Lexises, and other nice vehicles paid for by others in the parking lot.

We were asked to leave and attempted the same thing at another operation in Jeffersonville leased by the same company. That elicited a similar response.

A business federal authorities hope David Rose will say goodbye to forever.

Rose will likely plead guilty to the charges on July 8th.

David Rose, his sons and Brian Rose and his wife Joyce were also named in a suit filed by the security and exchange commission this month.

In it, the government alleges that the roses used $1.3 million in investors' money for everything from fancy cars to big homes and even a facelift.