DENVER (AP) — A Colorado Springs man and his two oil and gas
companies have agreed to pay $510,000 to settle civil fraud
allegations, the Securities and Exchange Commission said
Thursday.

The SEC alleged that between March 2002 and December 2006,
Donald H. Allen and his companies H&M Petroleum Corp. and
American Energy Resources Corp. raised about $9.9 million from
more than 350 investors nationwide without disclosing that they
had never generated profits for investors.

Allen did not immediately respond to a telephone message.

Allen was accused of spending $2.3 million of investor funds to
pay for items including a custom speedboat, ski vacations,
fitness equipment and jewelry.

The SEC alleged Allen and his companies touted annual returns
of up to 354 percent without disclosing the speculative nature
of the projections; incorrectly told investors that AER and H&M
invested in their own projects; that securities were improperly
sold in unregistered transactions; and that Allen acted as an
unregistered broker.

Allen and his companies settled the case without admitting or
denying the allegations.