JOHN McFARLAND - DALLAS (AP) — Federal regulators have frozen the assets of a Delaware company accused of swindling nearly 8,000 investors in a $485 million Ponzi scheme that falsely promised hefty returns on investments in the oil and gas business, officials said Tuesday.

Three businessmen in Dallas, where Provident Royalties LLC has its main office, ran the nationwide operation involving fraudulent securities offerings between June 2006 and January 2009, the Securities and Exchange Commission alleged in civil complaint filed in a North Texas federal court.

"Provident sold ostensibly safe securities such as preferred stock to thousands of investors," Ken Israel, Director of the SEC's Salt Lake Regional Office, said in a statement. "But it was actually operating a Ponzi-like shell game in which assets were shuttled from one entity to another and investors were paid 'returns' from whatever money was available — usually that of the most recent investors."

Phone messages left with Provident, which filed for Chapter 11 bankruptcy protection June 22, were not returned Tuesday.

According to the SEC's complaint, Provident promised yearly returns of up to 18 percent and made fraudulent securities offerings through 21 affiliated entities to more than 7,700 investors. The SEC claims Provident said 85 percent of funds raised through the offerings would go toward interests in oil and gas real estate, leases, mineral rights exploration and development. But the SEC said less than half of that money was actually used for that purpose.

Investments in the scheme were typically between $25,000 and $250,000, with a few over $1 million, said Tom Melton, a senior regional trial counsel with the SEC.

"It's big, but it was a lot of little people who got taken," Melton said.

The order to freeze the assets and to place Provident in receivership was approved last week and unsealed Tuesday. It's still too early in the investigation to tell how much money's left, and Melton said it could take up to a year to sort it all out.

The SEC complaint names three co-founders and managers of Provident, Paul R. Melbye, Brendan Coughlin and Henry Harrison; Provident; broker-dealer Provident Asset Management LLC; and 21 other entities that offered and sold securities. Messages at Melbye's and Coughlin's home numbers weren't returned, and Harrison's is unlisted.

Melton said all three founders and managers of Provident wound up with some of the invested funds, but it's unclear how much. Coughlin, 43, and Harrison, 44, each took about $6 million, he said. He said Melbye, 44, took an undetermined amount.

The SEC complaint charges the defendants with violating anti-fraud provisions of the federal securities laws.

FBI Special Agent Mark White in the Dallas office would not confirm whether a criminal investigation was under way.