Second Man Pleads Guilty in Oil Well Fraud : Justice: The Encino man was part of a ‘boiler room’ operation that solicited investors for phony oil leases in Kansas and Oklahoma.

An Encino man pleaded guilty to mail fraud Monday, admitting that he was one of the operators of a “boiler room� that sold investment shares in oil wells that salesmen falsely claimed were actively producing, officials said.

Anthony Colagreco, 32, pleaded guilty to two counts of mail fraud in U.S. District Court in Los Angeles and faces up to 10 years in prison and a $500,000 fine when he is sentenced Sept. 17, said Los Angeles County Deputy Dist. Atty. Don Tamura, who is assigned to a multi-agency task force investigating telemarketing fraud.

Colagreco, who is the second defendant to plead guilty in the scam, was president of American Southwest Petroleum Ltd. in West Los Angeles, which solicited investors in oil leases from across the country, officials said. In the summer of 1985, ASP salesmen sold about 350 shares in oil leases in Kansas and Oklahoma to investors for $2,400 to $3,000 apiece.

But authorities said the wells on the leases were not producing as investors had been led to believe. Some investors received fictitious oil production reports, and some received money back on their investments. But the money was actually from later investors in the scheme.

ASP collapsed in late 1985 and was investigated by the telemarketing fraud task force. None of the money taken from the investors was recovered, Tamura said. Investigators learned that much of the money was used in speculative investments in commodities, and for personal purchases such as cars, homes and clothes by Colagreco and Peter Gaston Stanford, ASP’s board chairman, Tamura said.

“As far as we can tell, none of the money was returned,� Tamura said.

Colagreco and Stanford were indicted in May on 19 counts of mail fraud. Last week, Stanford, 42, of Encino pleaded guilty to three counts of mail fraud. He faces up to 15 years in prison and a $750,000 fine when he is sentenced Aug. 28 in federal court.

Tamura said Colagreco and Stanford met in the early 1980s when both were telephone salesmen in another Southern California boiler room operation.