By 1918 he had moved on to Texas, where he founded and folded two oil
companies,
dissipating his accumulated wealth of about $50,000 (about $510,000
today).
Nearly broke, he tried to recover his fortunes by initiating the
Petroleum
Producers Association (PPA),  which,
although it did do some oil exploration,
was mainly a stock reloading scheme that traded in exchanges of
worthless
oil shares for PPA shares and a small premium. Cook and his
publicist
S.E.J. Cox raked in millions in cash, but spent it as quickly as it
came
in on promotion and on buying “sucker lists” to
solicit more exchanges of worthless
stock.
In 1923, Cook and his associates were
indicted for using
the US Mails to defraud. In a month-long show trial intended
to put
an end to the numerous oil speculation frauds in Texas and Arkansas,
the
government put a parade of witnesses on the stand and offered a
mountain
of exhibits intended to expose PPA as a front for a huge pyramid
scheme.
The jury quickly convicted Cook and some other PPA officials on all
counts,
and the judge in the case threw the book at him, as much, it seems, as
retribution
for his exploration hoaxes as the seriousness of his crimes, sentencing
him
to more than 14 years in the Federal penitentiary. |
