Ehrman, "securities recidivist," gets 6-month sentence

John N. Ehrman, the former CEO of Houston-based Rocky Mountain Energy Corp., has been sentenced to six months in federal prison for making a false filing with the Securities and Exchange Commission, according to the Department of Justice.
Ehrman was indicted in 2007 for lying to the SEC about the number of shares the company had. He pleaded guilty in 2008.
This morning U.S. District Judge Lee Rosenthal sentenced Ehrman, 54, to six months in prison to be followed by a two-year-term of supervised release, according to a Justice Department release. Ehrman has already been ordered to pay more than $700,000 in a related civil SEC case. Ehrman remains free on bond pending pending an order from the Bureau of Prisons.
According to court documents, Ehrman arranged in 2002 and 2003 to buy all or part of four small, privately held oil and gas companies in exchange for Rocky Mountain stock.
He persuaded a Utah court to rule that Rocky Mountain’s plans to issue and exchange the shares were fair and didn’t constitute a public securities offering, according to court documents. The SEC alleged he forged a signature on a document and made false and misleading claims to the investing public about the business.
Ehrman settled the civil case in 2004 without admitting or denying guilt by agreeing to pay back $645,888 in profits he received through the alleged scheme and paying a $120,000 civil penalty.
This isn’t Ehrman’s first run-in with the law over questionable securities deals.
The SEC has described Ehrman as a “securities recidivist,” because he had been sued previously by the agency for securities fraud at Houston company TransWestern Oil and Gas.
In the early 1990s Ehrman and others faced civil and criminal charges related to claims they defrauded dozens of investors in TransWestern, which is no longer in business. According to Chronicle files on that case, he was accused of forging Texas Railroad Commission documents and producing oil company records that gave the false impression the wells were producing large amounts of oil.
The investigation was handled by the Houston office of the FBI and the SEC Regional Office in Ft. Worth. Assistant U.S. Attorneys Stephen Corso and Gregg Costa prosecuted the case.