PA Man Behind AIDS Scam Charged in Oil Swindle

By: Associated Press Email
By: Associated Press Email

A Pennsylvania ex-con who once claimed he could cure AIDS by pumping ozone and oxygen into patients' rear ends has come up with an even more audacious swindle, federal prosecutors say: He told investors he controlled more than $1 billion worth of Texas oil.

Richard J. Harley, who's from Shawnee-on-Delaware, in the Pocono Mountains, claimed to own 10 million barrels of oil in Brown County, Texas, said he needed to borrow money to pump it out of the ground and promised investors they'd make their money back 10 times over, authorities say.

In reality, prosecutors say, he didn't own any oil and simply lined his pockets with the investors' cash.

Harley told The Associated Press late Friday that all of his business dealings have been completely legitimate, and he accused the government of pursuing a vendetta against him. He said his company owns the oil and has the documentation to prove it.

"I categorically deny, deny, all that they said about me," said Harley, 68. "The company, in fact, is the owner of that oil and has been since 1997."

Harley also tried depositing a pair of $500 million checks he claimed were issued by the Federal Reserve Bank of New York, even going so far as to call the reserve banks in Atlanta and New York and demand payment, court documents said. Harley denied any wrongdoing, saying the assets belonged to a client of his business, RJH and Co. Inc., and RJH was acting as a fiduciary.

Harley was indicted by a federal grand jury this week on 23 counts of fraud and false statements. He is scheduled to be arraigned Thursday in Wilkes-Barre.

In the 1990s, Harley and his wife ran an AIDS clinic that charged patients hundreds of dollars for what were determined to be fraudulent ozone enemas. The couple were convicted of swindling about $300,000, most of it from investors who bought stock in the company. Harley was sentenced to five years in federal prison.

He said Friday he maintains his innocence in the AIDS clinic case.

Harley's oil scheme began in 1999 and went on for the next 13 years, according to court documents. Prosecutors did not say how many investors might have been defrauded or how much money Harley might have taken in.

Harley claimed RJH was a "vertically held integrated privately held holding company owning, controlling, leasing, developing, and administering assets in commercial and residential real estate, petroleum products, and commodities," charging documents said. Harley said RJH held "unrestricted bond power" over Federal Reserve bank instruments worth more than $700 billion, the documents said.

The FBI took an interest after Harley and his wife were sued in Lehigh County Court in 2009. An investor claimed he gave them $239,500 and was promised more than $1 million in return. The investor won a $1.1 million judgment.

Prosecutors said Harley filed three fraudulent bankruptcy petitions in an effort to cover up his schemes.

The U.S. attorney's office said Harley faces up to 20 years in prison on each of the most serious fraud counts.

Harley pledged to fight.

"The truth will come out," he said.


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