Drill! Drill! Drill! ... Uh-Oh

The Securities and Exchange Commission nicked a Colorado man for $510,000 to settle a case where he was accused of fleecing investors of some $9.3 million. That would almost seem to make crime pay.

Why such a low amount? None of the lawyers involved in the case, where no wrongdoing was admitted or denied, returned calls to explain it.

The S.E.C., in its press release, said the settlement amount represents an estimate of the assets Donald H. Allen, 48, of Colorado Springs, and his two energy companies held as a result of fraudulent offerings.

So what happened to the rest? Allen was accused by the S.E.C. of diverting more than $2.4 million to buy a custom speedboat, ski vacations, fitness equipment, and jewelry.

The commission's complaint also said he spent some $4.5 million on overhead, salaries and expenses on other projects -- which still leaves some $1.5 million in potential refunds to investors.

His attorney, Dan Waller of Dallas, was out of his office Friday and not available to comment.

What is clear is that 350 people bought fractional interests in oil and gas projects Allen touted either by phone or through seminars advertised in local newspapers between March 2002 and December 2006.

Investors heard that projected annual returns were as much as 354 percent -- but were not told the projects, to drill, test, and complete well sites, had never generated profits for any previous investors.

Also, Allen did not disclose that his companies had not purchased interests in any of the projects they were marketing as sure investments.

He has agreed not to violate securities laws again, and to pay the costs of distributing the $510,000 to the investors.

by Elizabeth Olson