The Securities and Exchange Commission has filed securities charges and ordered an asset freeze against Janniece S. Kaelin and Robert A. Helms, who are both accused of running a Texas-based Ponzi scam involving purported investments in oil and gas projects. The regulator contends that Kaelin and Helms misled investors about their industry experience, even as they raised close to $18 million for what was supposed to be royalty interests in oil and gas. The SEC says that the two of them used most of the money to run a Ponzi scam and pay for business costs and personal spending.
Per the Commission’s complaint, Helms and Kaelin started offering investments through Vendetta Royalty Partners in 2011. They brought in at least 80 investors from numerous states.
In offering documents, they promised that over 99% of investment proceeds would be used to obtain a solid portfolio filled with oil and gas royalty interests. Instead, claims the regulator, the Kaelin and Helms put in only 10% of this money in the projects. The result was very small returns.
The Commission is taking issue with the offering documents, saying they were fraudulent and misleading and misrepresented Helms and Kaelin’s experience in the oil and gas industry. The agency also says that the two of them did not disclose that there was litigation against them and their companies or that Vendetta Royalty Partners was running behind on its credit line. (The company later defaulted.)
The regulators says that Kaelin and Helms ordered Vendetta Royalty Partners to make about $5.9 million in partnership income distributions to investors. New investors’ funds were used to make distributions to investors who had put their money in earlier.
The SEC complaint is also charging individuals Deven Sellers and Roland Barrera with illegally selling these investments (hey weren’t registered with the SEC) and misleading investors about the referral fees and sales commissions they would receive. Although they claimed that the fees would be small, each of them was paid over $200,000 for just one of the investments.
Now, the court has issued a temporary restraining order to prevent the defendants from committing more violations, as well as frozen their assets, forbidden any document destruction, and mandated for proper accounting. The SEC wants disgorgement of ill-gotten gains in addition to penalties and prejudgment interests and permanent injunctions.
Please contact our Texas securities fraud law firm if you suspect that your investment losses are do to misconduct, negligence, or fraud.
Oil and Gas Fraud
The SEC recently noted while oil and gas fraud has been a problem for a long time, with reports of new finds in Texas and North Dakota, the number of related securities fraud cases are going up. The government agency is now filing about 20 oil and gas fraud cases annually.
SEC Stops Texas Securities Scam Involving Oil and Gas Investments, SEC, December 6, 2013
Read the SEC Complaint (PDF)
SEC’s Investor Alert (PDF)
Investment fraud is booming along with oil and gas drilling, SEC says, Dallas News, January 4, 2014
More Blog Posts:
Ex-NFL Running Back Ricky Williams Files $6M Texas Securities Fraud Case Against His Financial Adviser, Stockbroker Fraud Blog, December 18, 2013
Texas Securities Fraud: SEC Accuses Two Houston-Based Advisory Firms of Making Thousands of Transactions That Clients Didn’t Know About, Stockbroker Fraud Blog, November 27, 2013
US Supreme Court Hears Oral Argument on the Impact of SLUSA on the Stanford Ponzi Scams, Institutional Investor Securities Blog, October 17, 2013