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Two oil and gas fraudsters sentenced to prison in $1.6 million scam

September 1, 2020 

Two repeat offenders who were partners in a bogus oil and gas business have each been sentenced to prison for their roles in a scam to bilk investors out of more than $1.6 million, Harris County District Attorney Kim Ogg announced Tuesday.

“They had second chances to turn their lives around, but instead used their past experience to put together another larger scheme,” Ogg said. “This was a coordinated plan to masquerade as an up and coming company to steal money.  These criminals went so far as to rent high end office space in the energy corridor to carry out the fraud.”

Hermilia Flores, 47, of Katy, and David Alan Shand, 61, of San Antonio, set up shop as “Wolfpack Oil Co.” in a modern two-story office park on Highway 6 in west Houston.

Between May 1, 2017 and November of that year, the duo convinced investors they were using the money to drill, test and complete oil and gas wells. They also sold fraudulent securities, including “fractional interests in oil and gas investments.”

The pair defrauded at least 37 complainants court records show.

Flores pleaded guilty earlier this year and was sentenced last week to 20 years in prison by state District Judge Kelli Johnson for one charge of securities fraud. The judge heard testimony that in 2011, Flores had pleaded guilty to stealing more than $20,000. In that case, she was put on deferred adjudication probation for five years and paid back the money.

In the most recent case, Flores handled the bank accounts and Shand was the sales agent. Each pocketed more than $500,000 for their efforts.

“We asked for restitution to the victims as a condition of any eventual parole,” said Valerie Turner, Chief of the DA’s Consumer Fraud Division.  “Hopefully one day these victims will be repaid.  In the meantime, these criminals will be incarcerated.”

Shand pleaded guilty in April to securities fraud and was sentenced to 25 years in prison because he was a habitual offender. He too was on parole at the time of the most recent scams, having served prison time previously for felony theft in 2011. He was also convicted of tampering with a government record. Shand had been a CPA but lost his license in 1991.