The state securities commissioner issued a preliminary cease-and-desist order against an oil and gas scheme that netted more than $1 million from Hawai'i investors.

The order alleges that Dennis W. Stutes and George Crandlemire solicited investors in Hawai'i to invest in an entity known as "American Oil & Gas Revenue, Joint Venture No. 12" in violation of state securities laws. The men are accused of engaging in a scheme that promised investors a low-risk high return on oil and gas prospecting based on the re-entry of existing wells that were previously capped.

The order includes accusations of fraudulent misrepresentation and failure to disclose material information.

The order seeks permanent injunctions against future violations, restitution and administrative penalties of $750,000 against American Oil & Gas Revenue, Joint Venture No. 12 and Dennis W. Stutes and $60,000 against George Crandlemire.

State securities regulators are warning consumers to be wary of oil and gas scams. Oil and gas deals are complicated investments that generally require a significant investment, often requiring a minimum deposit of thousands of dollars, they said.

"Increasingly, these deals are being promoted via the Internet with claims of attractive tax advantages and high returns," said Tung Chan, Hawai'i commissioner of securities. "Overall, these deals are highly risky, and investors should do research, check with our offices, and approach these offers with caution."

Hawai'i residents who have been contacted by, who have invested with, or who have any information regarding American Oil & Gas Revenue are urged to contact the Securities Enforcement Branch of the Department of Commerce and Consumer Affairs at 586-2740.