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CEO pleads guilty in alleged oil, gas Ponzi scheme

SHERMAN, Texas (AP) -- The co-founder and CEO of a defunct Texas-based oil and natural gas investment company has pleaded guilty to cheating thousands of clients in an alleged $485 million Ponzi scheme.

The U.S. attorney's office says 47-year-old Paul R. Melbye of Dallas pleaded guilty Thursday in federal court in Sherman to a charge of conspiracy to defraud investors. He faces up to five years in prison.

Another co-founder of Provident Royalties LLC, Joseph Blimline, got a 20-year sentence in May. Prosecutors allege the company made false statements about oil and gas projects, used funds from later investors to pay earlier ones and didn't disclose that Blimline was charged with securities fraud in Michigan.

Two other men await trial over an alleged scheme that prosecutors say started in 2006 and defrauded 7,700 investors.