WICHITA, Kan. — A federal judge has dismissed the indictment against seven men, including four from 
Hutchinson, all accused in 2012 of cheating investors out of $132 million.
The Prosecution dropped the charges against Michael McNaul, Lloyd Nunns, Gregory Krause and Fredie Hembree; all of Hutchinson; along with Russell Kilgraff of Preston, Steven Tillman of Owasso, Okla., and Dale Lucas of Wichita.
The 67-count indictment accused the men of executing a scheme in which they distributed false and fraudulent brochures, joint venture agreements, application agreements, reports, updates, profit and loss statements and other documents designed to entice investors with false promises of high returns on investments in companies that leased drilling rigs and related businesses.
The indictment also alleged that the conspirators worked together to execute the scheme by mailing prospective investors documents that contained false and fraudulent representations and promises, and after the defendants had obtained money from investors they sent investors false and fraudulent reports, updates and profit and loss statements.
They’re also accused of using investor funds to pay a $300,000 settlement with the Colorado Securities Commission, which they fraudulently failed to disclose to investors. They’re also accused of making false claims to potential investors, telling them they would be paid every quarter, they would receive a 25-to-40 percent annual return and that the companies were already seeing returns in the 15-to-40 percent range.
U.S. District Judge J. Thomas Marten granted on Monday the request from prosecutors to dismiss the case. Its end comes nearly three years after the government announced the indictment, alleging at the time that investors were bilked with false promises and phony reports about companies that leased drilling rigs and related businesses.
Prosecutors did not explain their decision in the filing.