LOUISVILLE, Ky. (AP) — A federal appeals court has upheld the convictions of two men who ran an oil-and-gas drilling scheme in which investors lost millions of dollars.
The U.S. 6th Circuit Court of Appeals found no mistakes in the handling of the cases of 51-year-old former attorney Bryan Coffman and 60-year-old Tennessee businessman Gary Moss Milby. Both men were convicted in May 2011 of multiple charges of mail, wire and securities fraud. Coffman and Milby were also ordered to forfeit $33 million in cash, cars and property.
During the trial that lasted nearly a month, prosecutors characterized the investments as operating like a pyramid scheme with payments from new investors being given in small amounts to longer-term investors with some people receiving no money at all.
Milby surfaced in the public eye when he threw his daughter a lavish Sweet 16 birthday party that was featured on MTV. The episode showed Milby presenting his daughter with a private helicopter ride, a new BMW and a shopping spree.
Coffman is serving a 25-year sentence at the federal prison in Terre Haute, Indiana. Milby is serving a 20-year sentence at the federal prison in Ashland.
Coffman and Milby alleged a variety of errors on the part of the trial court, including handing down excessively long sentences that were out-of-line with prison terms in similar cases.
Chief Judge Alice M. Batchelder, joined by judges Ralph Guy and Karen Nelson Moore, found that the evidence supports the convictions and the sentences were warranted.
"The extensive fraudulent conduct in this case, the need for general deterrence of such white-collar fraud, and the significant financial impact on the victims necessitate a long period of confinement," Batchelder wrote for the court.
Prosecutors said the defendants spent their investors' money on cars, jewelry, yachts, parties and retirement accounts.
The funds were tucked away in a series of bank and investment accounts held by Coffman, his wife Megan, or various business entities the couple used. The court found that money, either belonging to the clients or to the Coffmans, facilitated the money laundering part of the oil drilling scheme.
Coffman and his wife may keep a house they purchased in Lexington, even though prosecutors sought to seize the property as ill-gotten proceeds from the scheme.