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A Dry Hole

John Gable drilled for oil and suckers--including the federal government.

Prisoner No. 21-052-013 walks stiffly into a small meeting room at the federal prison in Jefferson County. John Gable's jet-black hair is slicked back and neatly combed, belying his 69 years. He has the solid build and resolute gaze of a Kansas farmer, the life he was born to, but the weariness in his eyes did not come from a lifetime of harvests.

Gable's mud-colored prison jumpsuit is a world away from the Savile Row-style suit he wore as host of a splashy 1981 party, where he feted potential investors in his oil company. He dazzled the moneymen by flying the Chinese ambassador to Denver on his private jet and then ferrying the entourage to the Turn of the Century restaurant in a fleet of limousines.

A twice-convicted felon, Gable is now serving a 41-month sentence for defrauding the federal government through an oil-rebate scam. According to authorities, he masterminded his latest fraud from a cell in this very prison, working to rip off the same government that was keeping him behind bars on a previous conviction for multi-million-dollar bankruptcy fraud. For several years while Gable was serving out that first sentence, the Department of Energy was mailing checks for as much as $45,000 to paper companies created by the convict.

At the height of Denver's oil boom in the early 1980s, Gable's Empire Oil and Gas, the culmination of a two-decade career in the oil business, was worth more than $60 million. Gable regularly surveyed his empire from his Learjet, which had his initials on its tail and allowed him to arc over oil fields that extended from Montana to Texas. But the collapse of the oil market sent Empire into bankruptcy.

The court-appointed bankruptcy trustee, attorney James Rouse, enlisted private investigators and the FBI to track down the company's assets from New Mexico to West Virginia. He says they found drilling equipment on docks waiting to be shipped to Saudi Arabia and piles of rigging with the serial numbers scraped off, but much of the company's property had simply disappeared.

Ultimately, Gable was convicted of trying to hide Empire's assets from its creditors, who lost millions after the company imploded and never collected more than a few cents on every dollar they'd put into Empire. At the time Gable entered federal prison in 1989, there were more than $100 million in civil judgments against him.

Even behind bars, Gable still loves talking about the oil business, reveling in tales of the risk-taking and overnight turns of fortune that could allow a onetime roughneck to rise to the top of the business. "When you drill, you never know if you'll get 1,000 barrels or a dry hole," he says. "It's always a gamble. You either make lots of money or you wind up broke. A lot of people like the Gettys and Hunts spent their last dollars and hit a big one and made a fortune. Hunt had totally run out of money; he couldn't even pay his crews. You hit one oil field and it could have millions of gallons of oil in it."

At the mere mention of legendary oil prospectors who created vast fortunes--Marvin Davis, Sam Gary, billionaire Phil Anschutz--Gable's milky eyes flash and his voice rises. In the Sixties, he says, he even worked for Anschutz's father, Fred, back when the elder Anschutz was struggling so hard he couldn't pay his bills on time.

"We were contracting water hauling for his rigs," he recalls. "I might have to go to his office four or five times to collect $500. When I came out here in 1964 they had repossessed all his rigs. Believe me, they had no money. Then he hit a big well east of Gillette, Wyoming. I don't know how old Phil was at that time. Now he owns half of downtown."

Gable remembers flying over the Anschutz oil strike at night, spotting the flames that heralded a live oil field from far up in the sky. "You could see that fire at night for miles and miles," says Gable. "He found millions of barrels of oil."

Gable, too, has become a legend in the oil business--but not for his financial acumen.

One story has him driving tankers up to other people's oil wells and helping himself to tanks full of crude. Others claim he buried valuable equipment in the desert to hide it from creditors. And rumors of Swiss bank accounts and offshore investments persist, although no one has ever proven that Gable managed to keep any of the millions that disappeared after the collapse of Empire.

Gable insists he's been left with nothing but memories and a prison record. His mild manners and soft voice can't conceal the bitterness he feels toward those he blames for destroying his career, from bankers to government officials to relatives. He calls Rouse, the bankruptcy trustee, "one of the biggest crooks I've ever run into in my life."

People who know Gable describe him as unscrupulous and amoral, a born con man. But they also say Gable is brilliant, a man who could have become a star in the oil industry--if he had ever learned to follow the law.

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