Black Gold Scandal in Bluegrass State

A teen party featured last year on MTV's "My Super Sweet Sixteen" may have been the icing on the cake. "I wanna have the biggest Sweet Sixteen that anyone has ever seen," exclaims smiling birthday girl Ariel Milby on the video.

The program is known for showing off the lavish, over-the-top lifestyles of rich American girls and their families, but in the case of Ariel's birthday, her party captured the attention of some unintended viewers: federal agents.

The birthday girl arrived by helicopter, decked out like a princess. Her big day was capped off by fireworks and a big gift from her father — a BMW 325i.

On the video, Ariel proudly explains her fabulous lifestyle is made possible by her father's oil business.

"My dad owns his own oil company and he has oil wells all over the world," she tells the audience. "I love oil. Oil means shoes and cars and purses," she continued, adding that her new car "kind of sets me apart from everyone else in this town."

"Daddy" is Gary Milby, the target of a federal case for allegedly swindling hundreds of people, including many senior citizens, who invested in his oil business.

"I can't believe this," a shocked David Peters — one of Milby's alleged victims — says as he watches a video of the TV program. "I feel like I've been hit in the solar plexus. Below the belt. Is that where our money went? For her 16th birthday, whatever. He knew how to flaunt it I guess."

False Promise of Black Gold?

Peters is among nearly 400 investors who claim Milby cheated them out of up to $19 million, according to a complaint by the U.S. Securities and Exchange Commission, as well as lawsuits filed in federal court. Other investors in Milby's companies in several states say they've been interviewed by federal agents about the promises they say he made, and a warrant for Milby's arrest on a charge of felony fraud was issued by a judge in Louisiana.

"I was swindled. I was scammed. It was a con job," Peters says.

In the summer of 2005, Peters heard ads on XM Satellite Radio about a potentially lucrative oil investment. "With investments of $24,000 to $49,000, you can make up to $4,800 in monthly income," the ad promised.

Intrigued, Peters flew to Kentucky, where he was picked up in a limousine and taken to meet Gary Milby in person.

"He was the guy that was gonna make things happen," Peters says. "He was the go-to guy. He was the guy that was behind the program. We ended up spending the day out in the field in Kentucky looking at supposed oil-producing wells."

After hearing the pitch and reading marketing materials from Milby's Mid-America Energy, Inc., Peters invested $37,000, believing Milby's promise that the oil wells would produce 22 barrels per day.

"I thought I was buying somewhere between $2,100 and $3,600 a month in free cash flow," Peters complains.

The SEC charges that such investments were based on "false and misleading information" and "exaggerated the returns that investors would receive." Milby denies all the allegations.

"In this business, you never get a big enough check," Milby told ABC in a telephone interview. "If you get $1,800, you want $2,200. We were in the business of drilling holes. Every one of them [the investors] was given an opportunity to see, touch and feel."

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