Powering Down on Fraud: Don't Get Burned by Fake Energy Investment Scams

The energy sector is buzzing. From fluctuating oil and gas prices to the exciting potential of solar, wind, and other green technologies, energy is constantly in the news and on investors' minds. Unfortunately, where there's interest, scammers often follow, creating fake investment opportunities designed to drain your savings.

These aren't small operations. Investment fraud, often fueled by cryptocurrency scams, has become the costliest type of fraud in the U.S., with victims losing a staggering $4.57 billion in 2023 alone, according to the FBI. While younger generations report falling victim more often, older adults (age 60+) lost a record $1.2 billion to these schemes last year.

Understanding how these scams work is key to protecting yourself. Let's look at a real-world example and the broader trends.

Case Study: The "Del Mar Energy" Illusion

Recently, websites like dmenergy.biz popped up, presenting themselves as "Del Mar Energy Inc.," a supposed international leader in natural resource extraction since 2002. They promised high, daily dividend payouts from energy projects – an immediate red flag in a sector known for volatility.

Investigation revealed numerous warning signs:

False Claims: The site falsely claimed regulation by the U.S. Securities and Exchange Commission (SEC), even referencing specific forms. However, checks revealed the associated SEC filings belonged to a different, likely inactive, company with a similar name based in different locations.
Virtual Office: The prestigious Dallas address listed? It turned out to be a virtual office location, inconsistent with a major international energy company needing physical operations.
Vague Details: The website was generic, lacking specific information about its projects, technology, or leadership.
Unrealistic Returns: Promises of high daily returns and undefined performance metrics ("IER" indicators) lacked transparency and credibility.
Network of Deception: Reports on forums like Reddit and a specific warning from the Better Business Bureau (BBB) linked the "Del Mar Energy" name to identical scams operating across multiple domains (delmar.biz, dmenergy.io, delmar.energy, etc.), often using fake reviews, fabricated withdrawal proofs, and Ponzi-like referral structures.

This case highlights a common playbook used by energy investment scammers.

The Scammer's Playbook: How They Hook You

Energy scammers blend real-world trends with classic fraud techniques:

The Hook: They exploit interest in oil and gas ventures (promising high returns from drilling) or renewable energy (solar farms, wind turbines, innovative green tech like anaerobic digesters converting waste to energy, as seen in the $9 million Ray Brewer Ponzi scheme). They might reference real news about energy prices or climate initiatives to seem timely.
The Promise: Expect offers of guaranteed high returns (like the 30% monthly returns reported in the Del Mar scam) with little or no risk. They might claim to have secret technology, exclusive access, or insider information.
The Facade: Scammers create professional-looking websites, though often using stock images and vague language. They might impersonate legitimate companies, government agencies (like the IRS or EPA, especially in solar scams claiming fake rebates), or even registered investment professionals. They may use virtual offices or P.O. boxes to hide their tracks and fabricate credentials or affiliations. Increasingly, AI is used to create more convincing fake websites, profiles, and even deepfake videos.
The Pressure: You'll likely face high-pressure sales tactics. Scammers create a false sense of urgency ("Act now!", "Limited spots available!") to prevent you from doing research or seeking advice. They may discourage you from talking to family or financial advisors.
The Payment: Be extremely wary if asked to pay via wire transfer, cryptocurrency, gift cards, or peer-to-peer apps. These methods are favorites because they're hard to trace and reverse. Payment might be requested directly to an individual or third party, bypassing typical financial controls.
The Structure: Many are Ponzi schemes, using money from new investors to pay earlier ones. Others might be pump-and-dump schemes involving penny stocks of shell companies claiming dubious green energy breakthroughs. Affiliate or referral commissions are common, incentivizing victims to unknowingly recruit others.

Red Flags: Your Checklist to Spot Energy Scams

Trust your gut, but also look for these specific warning signs:

Guaranteed High Returns / Low Risk: If it sounds too good to be true, it almost certainly is. Energy markets are volatile; guaranteed high returns are unrealistic.
High-Pressure Tactics: Anyone rushing you or discouraging questions is suspect. Legitimate opportunities allow time for due diligence.
Unsolicited Contact: Be extra skeptical of investment offers arriving via unexpected calls, emails, texts, or social media messages.
Verification Problems: Cannot verify the seller's license on FINRA BrokerCheck or the investment advisor's registration on SEC IAPD? STOP. Cannot find the investment registered on the SEC EDGAR database? Ask why, and verify any claimed exemptions. The SEC's PAUSE list also flags entities falsely claiming registration or impersonating firms.
Impersonation: Scammers often pretend to be from legitimate firms, government agencies (IRS, FTC, DOE), or utility companies. Double-check contact info independently.
Vague Information: Lack of clear documentation (like a prospectus or offering circular), evasive answers, or claims that details are "too technical."
Suspicious Addresses: A company claiming major physical operations (wells, solar farms) but only providing a virtual office or P.O. Box address.
Odd Payment Requests: Demands for payment via wire, crypto, gift cards, or directly to an individual's account.
"Free" Solar or Fake Rebates: Common in solar scams. Offers of "free panels" often hide predatory loans or leases. Claims of special government programs covering all costs are usually false. Check official sources like IRS.gov or Energy.gov for real credits.

Protect Yourself: Verify Before You Invest

Don't rely on the promoter's claims. Do your own homework:

Check the Professional & Firm: Use FINRA BrokerCheck (brokercheck.finra.org) and the SEC's IAPD (adviserinfo.sec.gov) to verify licenses, registration, and disciplinary history. Also, check with your state securities regulator (find yours at nasaa.org). Use the contact info from these official sources, not what the promoter gives you.
Check the Investment: Is it registered with the SEC? Check the EDGAR database (sec.gov/edgar). If not registered, understand the claimed exemption and the associated risks. Unregistered offerings often lack transparency.
Research the Company: Look beyond their website. Check incorporation records with the Secretary of State. Search for independent news articles or industry reports (be wary of potentially fake press releases).
Scrutinize Physical Claims: For oil/gas or large solar projects, ask for specific locations, permits, geological reports (for oil/gas), operator details, and cost breakdowns. Be skeptical if verification is difficult or impossible.
Seek Independent Advice: Talk to a trusted, independently verified financial advisor, lawyer, or knowledgeable family member before committing funds.

If You Suspect Fraud: Report It!

Reporting scams helps authorities track down criminals and warn others, even if you can't recover your money directly.

Federal Trade Commission (FTC): Report general scams, imposters, and fraud at ReportFraud.ftc.gov.
U.S. Securities and Exchange Commission (SEC): Report investment-related fraud via sec.gov/tcr.
FBI Internet Crime Complaint Center (IC3): Report online fraud at ic3.gov.
FINRA: File complaints about brokers/firms at FINRA.org.
State Securities Regulator: Find contact info via nasaa.org.
Better Business Bureau (BBB): Warn other consumers via BBB.org/scamtracker.

The Bottom Line

Energy investments can be legitimate, but the sector is ripe for fraud. Approach unsolicited offers with extreme skepticism. Resist pressure, verify everything independently using official sources, and walk away if you see red flags. Services like URLert can help by flagging suspicious websites, but diligent research and critical thinking are your best defenses against getting burned.