GREENEVILLE, Tenn. — Brian C. Rose, 37, of Piney Flats, Tenn., has been sentenced to 108 months in federal prison for masterminding a $14,092,205 coal investment fraud that left 168 victims stripped of their life savings. Rose led New Century Coal, a shell operation that falsely claimed to mine Blue Gem coal — a rare resource used in computer electronics — while funneling 90% of investor money into luxury homes, thoroughbred horses, ARCA Truck Racing, and lavish travel.
U.S. District Judge J. Ronnie Greer handed down sentences totaling 284 months across ten conspirators, including Hugh Sackett, 86, of Anderson, S.C., sentenced to 12 months; Robert McGregor, 38, of Bowling Green, Ky., 12 months; Johnny D. Phillips, 35, of Bowling Green, Ky., 30 months; Dallas McRae, 46, of Orlando, Fla., 24 months; Thomas Berry, 36, of Bowling Green, Ky., 27 months; Jason Smith, 41, of Franklin, Ky., 27 months; David Rose, 66, of Louisville, Ky., 18 months; Jim Robinson, 57, of New Albany, Ind., two months; and Brent Loveall, 33, of Louisville, Ky., 24 months.
The scheme sold shares in nine limited partnerships, falsely claiming ownership of active coal mines, verified reserves, and consistent profitability. In reality, no coal was ever extracted. Investigators found that phony contracts, forged geological surveys, and manipulated financial statements were used to maintain the illusion of legitimacy. Investors — many of them retirees — were told their money was funding mine development, when it was instead funding private jets, luxury vehicles, and race teams.
U.S. Attorney Nancy Stallard Harr stated, “As a result of the investigation efforts and joint aggressive collection by the federal agencies involved with this case, the Department of Justice expects to be able to return some of what they lost to the victims of this fraud.” Federal agents seized multiple homes, high-end vehicles, thoroughbred horses, and cash directly purchased with defrauded funds.
The investigation was a rare multi-agency takedown involving the U.S. Secret Service, Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, and the Securities & Exchange Commission Enforcement Division. The case was prosecuted by Assistant U.S. Attorneys Helen Smith, Corey Shipley, and Anne-Marie Svolto, who called the operation one of the most brazen investment frauds in recent regional history.
Court documents confirm that restitution has been ordered in the full amount of $14,092,205. Supervised release terms, special assessments, and asset forfeiture proceedings will follow. Authorities warn investors to scrutinize energy-related ventures promising high returns with little risk — a hallmark of schemes like the New Century Coal fraud.
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Key Facts
- State: Tennessee
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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