Black Gold Scandal in Bluegrass State
Daughter of Kentucky businessman says "oil means shoes and cars and purses."
June 13, 2008— -- 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."
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.
Milby: You get out of here!
Wozencraft: Mr. Milby, put the gun down please!
911 Operator: Subject being held at gunpoint at this time.
"Nightline" reached Milby by phone, and he disputed that version of events. "I don't have any property in Kentucky," he said.
Milby said he was visiting his brother's farm on Father's Day two years ago when Wozencraft "snuck up behind me and stuck a gun to my head."
Milby claimed Wozencraft "told me to back away from the truck and stick my hands in the air."
Larry Wozencraft tells a different story. "He started telling me repeatedly, 'You'll never make it off my property alive,' so I drew my weapon. In fact, I didn't even have my finger inside the trigger guard. I had it alongside and I started retreating."
Wozencraft insists he never pointed the weapon at Milby.
Once the sheriff's deputies arrived, things calmed down, though Wozencraft was arrested, spent the night in jail and eventually agreed to a plea deal on trespassing charges.
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