Derek Wachob: Wire Fraud Charge, $66M Scheme, and Lawsuits

Derek Wachob, the former CEO of Sapulpa, Oklahoma steel pipe manufacturer Paragon Industries, was arrested on a federal wire fraud charge on November 18, 2025, accused of defrauding investors, a bank, an investment firm, and steel pipe distributors of at least $66 million. The Derek Wachob fraud case, filed in the Southern District of New York, sits alongside more than $200 million in civil lawsuits and the collapse of the company his father founded.¹

The Federal Wire Fraud Charge

Federal agents raided Wachob’s Sapulpa home on November 18, 2025, after an indictment was unsealed in the Southern District of New York.² Wachob, 53, is charged with one count of wire fraud, which carries a maximum of 20 years in prison.¹ The case is assigned to U.S. District Judge J. Paul Oetken, with Assistant U.S. Attorneys Danielle Kudla and Adam Sowlati of the Complex Frauds and Cybercrime Unit prosecuting.

Later the same day, Magistrate Judge Mark T. Steele released Wachob on a $1 million bond with travel restrictions after a hearing in Tulsa. His next appearance was set for November 25, 2025, in New York.² Wachob is presumed innocent unless proven guilty.

U.S. Attorney Jay Clayton said in a statement that “Derek Wachob claimed to be a billionaire and successful CEO, but as alleged, that image was built on lies.”³

How the Alleged $66 Million Scheme Worked

According to the indictment, the scheme ran from at least October 2022 through August 2024. Wachob solicited money by pitching business opportunities tied to future steel purchases he said Paragon would make, then diverted the funds to fund what prosecutors call an “extravagant lifestyle” and to keep the company afloat as it sank into debt.¹

Prosecutors break the alleged losses down this way:

More than $41 million from individual investors between 2023 and 2024, some of them described as close friends of Wachob.⁴
A $10 million loan from a Texas bank in January 2024, obtained by misrepresenting what the money would be used for.
A $7.3 million loan from an investment firm, also obtained through misrepresentations about its purpose.
A combined $7.4 million from two steel pipe distributors.⁴

The money allegedly went into expensive cars, vacation homes, private jets, helicopters, and yachts. The indictment includes a forfeiture provision requiring Wachob to give up any assets obtained with fraudulent funds if he is convicted.³

Civil Lawsuits and Asset Seizures

By the time of his arrest, Wachob and Paragon Industries faced more than $200 million in civil claims filed since September 2024.⁵

The Braver Case in Florida

Skip and Chad Braver sued in the U.S. District Court for the Southern District of Florida, seeking more than $30 million for breach of contract. The defendants include Wachob personally, Paragon Industries, Global Source Recycling Company LLC, Global Source Recycling Holdings LLC, The Olympia of Destin LLC, Wachob Properties LLC, and the Wachob Irrevocable Trust dated July 21, 2011. The court appointed David Rhoades as receiver in the case.⁶

In connection with that litigation, federal authorities seized a luxury yacht called The Abigail from Florida in September 2025, tied to Wachob’s failure to repay more than $30 million to former investors.⁷

The Oklahoma Investor Suit

Three investors from the high-performance powerboating community — Mark Schouten, Jacob Nossaman, and Zane Mead — sued Wachob, Global Source Recycling LLC, and Paragon Industries in Tulsa County District Court for $11 million. Each plaintiff invested $3 million in a steel-purchase opportunity, with Schouten contributing an additional $2 million. They allege Wachob never made his own promised $3 million contribution, never produced proof the investment was legitimate, and never returned their money, instead spending the funds on private jets, helicopters, yachts, and at least 50 automobiles.⁸ The complaint was originally filed in November 2024 and re-filed on January 2, 2025.⁹

Paragon Industries in Receivership and Bankruptcy

Paragon began showing public signs of distress by 2022, when it was struggling to pay vendors and meet payroll.¹⁰ In late 2024 the company laid off 70 employees at its Stephenville, Texas facility after filing a WARN Act notice, and a related subsidiary, WIT Services Co. LLC, laid off 15 more.¹¹ Some remaining workers were reportedly not paid.²

Paragon then defaulted on an $18 million loan from Byline Bank after missing seven months of payments and failing to produce required financial statements. A Creek County District Court judge placed the company into court-mandated receivership and appointed turnaround professional David Rhoades, who successfully petitioned to remove Paragon’s board of directors.⁵ The company filed for bankruptcy in approximately May 2025.¹⁰

1
U.S. Department of Justice. Chief Executive Officer of Steel Manufacturer Charged in $66 Million Fraud Scheme
2
News On 6. Paragon Industries CEO Derek Wachob Arrested on Wire Fraud Complaints
3
KJRH. Sapulpa-Based Paragon Industries CEO Arrested on Federal Charges
4
FOX23. CEO of Paragon Industries Arrested in Sapulpa on Federal Wire Fraud Charges
5
News On 6. Paragon Industries in Court-Mandated Receivership Amid Financial Issues
6
GovInfo. Braver et al v. Wachob et al, Case No. 24-24048
7
OK Energy Today. Paragon Industries CEO Charged in $66M Federal Fraud Case
8
Speed on the Water. Performance Boat Enthusiast Trio Brings Suit Against Wachob and Related Companies
9
News On 6. “I Put My Heart Into the Company” — Sapulpa Man Afraid to Lose Everything After Not Getting Paid
10
FOX23. CEO of Paragon Industries Arrested in Sapulpa on Federal Wire Fraud Charge
11
Sapulpa Times. Sapulpa Times Responds to Allegations Related to Paragon Industries and the Sapulpa Herald