SEC v. DAVID J. VAN HAVERMAAT; INNOVA ENERGY LLC; INNOVA LEASING AND MANAGEMENT LLC; and CLEMENT EJEDAWE a/k/a CLEMENT CHAD, Central District of California (Mar. 24, 2009) — Complaint

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DAVID J. VAN HAVERMAAT (Cal Bar No. 175761) 
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LORRAINE B. ECHA\lARRIA (Cal. Bar No. 191860) 
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KAROL L.K.POLL'OCK (Cal. Bar No. 77009) 
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Attorneys for Plaintiff 
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Securities and Exchange Commission 
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Rosalind R. Tyson, Regional Director 
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Michele Wein 
L<!Y!le, Associate Regional Director 
John M. McCoy III, Regional Trial Counsel 
5670 Wilshire Boulevard, 
11th Floor 
Los Angeles, California 90036-3648 
Telephone: (323) 965-3998 
FacsImile: (323) 965-3908 
UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 
;» itCV,09-
0
1Q'4 7 
SECURITIES AND EXCHANGE Case No. 
COMMISSION, 
COMPLAINT 
FOR VIOLATIONS OF 
Plaintiff, 
THE FEDERAL SECURITIES LAWS 
vs. 
INNOVA ENERGY LLC INNOVA 
LEASING AND MANAGEMENT LLC, 
and CLEMENT EJEDAWE a/k/a
CLEMENT CHAD, 
Defendants. 
Plaintiff Securities and Exchange Commission ("Commission") alleges as 
follows: 
JURISDICTION AND VENUE 
1. 
This Court has jurisdiction over this action pursuant to Sections 20(b), 
20(d)(l) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U;S.C. 
§§ 77t(b), 77t(d)(l) & 77v(a), and Sections 21(d)(l), 
21 (d)(3)(A), 21(e) and 27 of 
the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(l), 

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78u(d)(3)(A), 78u(e) & 78aa. Defendants have, directly or indirectly, madp use of 
the means or instrumentalities ofinterstate commerce, of the mails, or ofthe 
facilities 
of a national securities exchange in connection with the transactions, acts, 
practices and courses 
ofbusiness alleged in this Complaint. 
2. Venue is proper in this district pursuant to Section 22(a) of the 
Securities Act, 
15 U.S.C. § 77v(a), and Section 27 ofthe Exchange Act, 15 U.S.C. 
§ 78aa, because certain 
of the transactions, acts, practices and courses of conduct 
constituting violations 
ofthe federal securities laws occurred within this district, 
and all 
ofthe defendants reside and/or are located in this district. 
SUMMARY 
3. This matter involves the ongoing fraudulent offer and sale ofmore 
than $1.3 million 
of securities by defendant Clement Ejedawe a/k/a Clement Chad 
("Ejedawe") through two entities that he controls: Innova Energy LLC and Innova 
Leasing and Management LLC, both Nevada limited liability corporations 
(together, "Innova" and, collectively with Ejedawe, "Defendants"). 
4. From at least September 2007 through December 2008, the 
Defendants have raised at least $1,381,000 from at least 
31 investors in an ongoing 
oil and gas investment fraud. Ejedawe, Innova, and other sales representatives 
solicit investors 
by cold-calling them from a boiler room in Los Angeles, 
California. The Defendants represent to investors that their money will 
be invested 
in various oil and gas ventures and that they will receive monthly payments 
of 
$4,000 to $5,000 for each $50,000 invested. 
5. Contrary to their representations to investors, the Defendants are not 
using investor funds for oil and gas ventures. Instead, they are using investor 
funds to pay undisclosed commissions to sales representatives, to pay for 
Ejedawe's personal expenses such as rent, automobiles, church donations, court 
fees for a relative, and purchases at retail stores, and to make small payments to 
complaining investors. In addition to misrepresenting the use 
ofinvestor funds, 
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the Defendants are misrepresenting the returns earned by investors and the;status 
of Innova's oil and gas operations. 
6. The Defendants also misrepresent the existence and nature ofstate 
regulatory actions involving Ejedawe. Ejedawe is the subject 
of at least seven 
separate state cease-and-desist or desist-and-refrain orders relating to his 
unregistered offerings 
of securities, including orders from California, Alabama, 
Pennsylvania, Maryland, Kansas, and Washington. None 
ofthese state orders are 
disclosed in Innova's offering materials provided to investors. 
7. Ejedawe was the principal of another company, Rosewood Energy, 
which conducted another oil and gas offering. Several states, including Maryland 
and Kansas, issued orders against Rosewood and Ejedawe in connection with that 
offering. On October 9,2007, Ejedawe's attorney represented 
to Commission staff 
that Rosewood had been out 
ofbusiness since December 2006. Ejedawe's attorney 
claimed that "as a result 
ofthe [state] cease and desist orders and attorneys' fees 
associated with dealing with them, Mr. Ejedawe shut down the business and moved 
on to other businesses unrelated to anything that could be deemed a security." 
8. Despite the state actions and assurances from his attorney, Ejedawe, 
through Innova, is  still actively soliciting investors. The Defendants continue to 
operate and update Innova's website, encouraging potential investors to invest in 
Innova. Moreover, Ejedawe and Innova are lulling investors into believing their 
investment is viable. For example, on October 13,2008, an Innova sales 
representative falsely informed one investor that 
(1) Innova was waiting for 
permits to start drilling; and (2) Innova would start drilling around November 
2008. In the first week 
ofMarch 2009, Ejedawe told this same investor that 
drilling would begin in April 2009. 
9. The Defendants, by engaging in the conduct described in this 
Complaint, have violated, and unless enjoined will continue 
to violate, the 
antifraud and securities registration provisions 
of the federal securities laws. By 
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this complaint, the Commission seeks emergency relief against the Defend~mts, 
including a temporary restraining order, an asset freeze, accountings, an order 
expediting discovery, and an order prohibiting the destruction 
of documents, as 
well as preliminary and permanent injunctions, disgorgement with prejudgment 
interest, and civil penalties. 
DEFENDANTS 
10. Innova Energy LLC was incorporated in Nevada on May 8,2008. 
Clement Ejedawe is  listed 
as its managing member. Innova is not registered with 
the Commission in any capacity. Since 2008, Innova Energy has been operating 
out 
of a leased office in Los Angeles, California. 
11. Innova Leasing and Management LLC was incorporated in Nevada on 
December 20,2006. Clement Ejedawe 
is listed as its Manager. Innova Leasing is 
not registered with the Commission in any capacity. Innova Leasing's website 
indicates that its corporate headquarters are in Houston, Texas, but it has actually 
been operating out 
of a leased office in Los Angeles, California. 
12. Clement Ejedawe, alk/a Clement Chad, age 51, is believed to be a 
Nigerian national. For the last several years he has been residing in Westchester, 
California, where he has been operating Innova and other oil and gas ventures. 
Ejedawe is the managing director 
of Innova. Ejedawe has never been registered 
with any broker-dealers or investment advisers. 
THE FRAUDULENT OFFERING 
A. Overview And Structure Of The Investment Program 
13. Ejedawe began offering Innova securities out of a boiler room in Los 
Angeles, California in approximately December 2006. Initially, Ejedawe 
incorporated Innova in Nevada and opened two accounts with Wells Fargo Bank in 
Innova's name, into which Innova deposited investor funds. Ejedawe and Innova's 
sales agents tell investors that they are purchasing interests in either an entity 
called Bluff Creek Prospect or an entity known 
as the Innova Leasing Joint 
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Venture. The Bluff Creek Prospect investors are sold purported working i¥terests 
in oil and gas leases. The Innova Leasing Joint Venture investors are sold interests 
in oil and gas drilling equipment. All investor funds for both entities are pooled 
into Innova's Wells Fargo bank accounts. 
14. The Defendants promise investors a return between $4,000 and $5,000 
per month on an investment 
of $50,000. Ejedawe provides investors with a private 
placement memorandum and glossy sales brochures. The only individual identified in 
the materials is Ejedawe, who touts his purported "twenty-five years in the drilling 
industry" experience in both the offering materials and in conversations with 
investors. None 
ofthe offering materials that are provided to prospective investors 
include financial statements. The offerings are not registered with the Commission in 
any capacity. 
15. The Bluff Creek sales materials have included two unsigned letters 
dated June 15, 2006 and July 16, 2006 from a petroleum engineer. The first letter, 
addressed to an Innova representative, purported to analyze the number 
of"Proven 
Un-developed (PUD) oil and gas well locations remaining to be drilled" on 
Innova's properties in Texas. The letter identified 
121 well locations with reserves 
from "12,000 to 30,000 barrels per well." The second letter estimated valuation 
of 
Innova's wells at about $30 million assuming a $70 per barrel price of oil. In fact, 
Innova does not actually own or lease any oil or gas wells or properties in Texas. 
16. Innova and Ejedawe offer and sell the Innova investments through 
general solicitation efforts such as cold calling from lead lists and their internet 
website, www.innovaleasing.com. 
III 
III 
III 
III 
III 
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1 B. The Defendants Are Misappropriating Investor Funds And Making
 
2 Material Misrepresentations Regarding Investments 
In Innova
 
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1. The Defendants Are Misusing Investor Funds For
 
4 Ejedawe's Personal Expenses and For Substantial
 
5 Commissions To Innova Sales Representatives
 
6 17. In the offerings and in communications with investors, the Defendants 
7 market Innova 
as an established oil and gas drilling venture. The Defendants 
8 promise to invest investor funds in either oil and gas leases 
or drilling equipment. 
9 Contrary to their representations to investors, Innova has not purchased or invested 
lOin any oil and gas leases and has made only one purchase of drilling equipment, a 
11 used drilling rig purchased on December 30,2007 for $355,000. Ejedawe, using 
12 the name Clement Chad, purchased the rig. Ejedawe made an elaborate videotape 
13 ofthe rig, which is  available for viewing on Innova's web site. 
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18. Innova disclosed to investors in a private placement memorandum 
15 that Innova Energy LLC would receive a management fee of 1.4285% of funds 
16 raised. Contrary to this disclosure, however, the Defendants have used more than 
17 one-third of investor funds to pay personal expenses ofEjedawe. 
18 19. Ejedawe has misappropriated much of the investor funds. From 
19 September 2007 through December 2008, the Defendants raised at least 
20 $1,381,000 from investors. During the same period, Ejedawe used investor funds 
21 to pay his personal expenses totaling more than $600,000, including cash 
22 withdrawals totaling more than $350,000, personal expenses including his 
23 apartment rent, credit card payments, car payments, and charitable donations, 
24 including donations to his church. Ejedawe also used Innova investor funds to pay 
25 $11,500 to Rosewood Energy, the now-defunct offering that was the subject 
of 
26 cease-and-desist orders from several states and of which Ejedawe was a principal. 
27 20. The Defendants also fail to disclose to investors that Innova sales 
28 representatives are paid commissions ofup to 20%. Innova, through Ejedawe, 
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entered into an independent consultant agreement with certain sales . 
representatives. The agreement states that the sales representatives will receive a 
commission 
of 20% as long as the representative raises more than $100,000 from 
Innova investors during the calendar month. The Defendants 
do not disclose the 
sales commissions to Innova investors. Rather, they tell Innova investors that only 
2.3809% 
of funds raised are used to pay "syndication costs," which they define as 
"costs including sales commissions and other selected expenses" that are incurred 
in connection with the offering. From September 2007 through December 2008 
the Defendants paid over $420,600 to Innova's sales representatives. 
2. The Defendants Misrepresent Investor Returns 
21. In sales materials prepared in April 2008, Innova promised monthly 
income for Bluff Creek investors 
of approximately $4,500 per month on a $50,000 
investment. In July or August 2007, an investor in Innova Leasing Joint Venture 
was told by an Innova sales representative that he would receive approximately 
$4,500 per month from a $50,000 investment. Except for a few small payments to 
complaining investors, investors have not received the promised returns. 
3.	 The Defendants Misrepresent The Status Of Innova's 
Operations 
22. Ejedawe, Innova and the sales agents falsely represent in both the 
private placement memoranda and in oral communications with investors that 
Innova has applied for and secured the necessary permits to begin drilling for oil. 
Permits for the proposed well sites identified in Innova's private placement 
memoranda have never been acquired by Innova Energy LLC or Innova Leasing 
and Management LLC. 
23. On December 
14, 2007, the Defendants sent a memorandum to 
investors claiming that the Pennsylvania Department 
of Transportation had 
inspected Innova's drilling rig and granted Innova approval to operate the rig in the 
State 
ofPennsylvania. This representation was false. 
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4.	 The Defendants Misrepresent The Existence And N~ture Of 
State Regulatory Actions Involving Ejedawe 
24. None of the offering materials inform investors that Ejedawe is the 
subject
ofcease-and-desistordersrelatingtounregisteredofferings ofsecuritiesfrom . 
California, Alabama, Maryland, Kansas, Pennsylvania, Illinois, and Washington. 
25. Inspite 
oftheirknowledge ofthestateorders,EjedaweandInnova 
continue to offer and sell Innova's securities. In fact, they misrepresent to investors 
the nature 
ofthe state actions. For example, Ejedawe sent an email to an investor 
on August 
19, 2008 advising him that the Alabama order was the result of a 
complaint from a "non-investor" about "persistent calls 
to his residence by our 
sales people." In a telephone conversation on October 13,2008, an Innova sales 
representative advised another investor that the California order was based on a 
complaint from a "disgruntled old man." In fact, both the California and Alabama 
orders resulted from a cold call that Innova sales representatives unknowingly 
made to an Alabama Securities Commission investigator. 
FIRST CLAIM FOR RELIEF
 
Unregistered Offer And Sale 
Of Securities
 
Violations 
of Sections 5(a) and 5(c) of the Securities Act
 
(Against All 
Defendants)
 
26. The Commission realleges and incorporates by reference paragraphs 1 
through 
25 above. 
27. The Defendants, and each 
of them, by engaging in the conduct 
described above, directly or indirectly, made use 
of means or instrumentalities of 
transportation or communication in interstate commerce or of the mails, to offer to 
sell or to sell securities, or to carry or cause such securities to be carried through 
the mails or in interstate commerce for the purpose 
of sale or delivery after sale. 
28. No registration statement has been filed with the Commission or has 
been in effect with respect to the offering alleged herein. 
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29. By engaging in the conduct described above, the Defendants ,;iolated, 
and unless restrained and enjoined will continue to violate, Sections 5(a) and 5(c) 
ofthe Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c). 
SECOND CLAIM FOR RELIEF
 
Fraud 
In The Offer Or Sale Of Securities
 
Violations 
of Section 17(a) of the Securities Act
 
(Against All 
Defendants)
 
30. The Commission realleges and incorporates 
by reference paragraphs 1 
through 25 above. 
31. The Defendants, and each 
ofthem, by engaging in the conduct 
described above, in the offer or sale 
of securities by the use of means or 
instruments 
oftransportation or communication in interstate commerce or by use 
ofthe mails directly or indirectly: 
a.	 with scienter, employed devices, schemes, or artifices to 
defraud; 
b.	 obtainedmoneyorproperty 
bymeansofuntruestatements ofa 
material 
f~ct or by omitting to state a material fact necessary in 
order to make the statements made, in light 
of the 
circumstances under which they were made, not misleading; 
or 
c.	 engaged in transactions, practices, or courses ofbusiness which 
operated or would operate as a fraud or deceit upon the 
purchaser. 
32. By engaging in the conduct described above, the Defendants violated, 
and unless restrained and enjoined will continue to violate, Section 17(a) 
of the 
Securities Act, 
15 U.S.C. § 77q(a). 
III 
III 
III 
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THIRD CLAIM FOR RELIEF	 .
 
Fraud In Connection With The Purchase Or Sale 
Of Securities
 
Violations 
of Section lO(b) of the Exchange Act and Rule lOb-5 Thereunder
 
(Against All Defendants)
 
33. The Commission realleges and incorporates by reference paragraphs 1 
through 
25 above. 
34. The Defendants, and each 
of them, by engaging in the conduct 
described above, directly or indirectly, in connection with the purchase 
or sale of a 
security, 
bytheuse ofmeans orinstrumentalities ofinterstate commerce, ofthe 
mails, or 
ofthe facilities ofa national securities exchange, with scienter: 
a.	 employed devices, schemes, or artifices to defraud; 
b.	 made untrue statements 
of a material fact or omitted to state a 
material fact necessary in order to make the statements made, in 
the light 
ofthe circumstances under which they were made, not 
misleading; or 
c.	 engaged in acts, practices, or courses of business which 
operated or would operate 
as a fraud or deceit upon other 
persons. 
35. By engaging in the conduct described above, the Defendants violated, 
and unless restrained and enjoined will continue to violate, Section 10(b) 
ofthe 
Exchange Act, 
15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 
§ 240.10b-5. 
PRAYER FOR RELIEF 
WHEREFORE, the Commission respectfully requests that the Court: 
L 
Issue findings 
offact and conclusions oflaw that the defendants committed 
the alleged violations. 
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1 II. .
 
2 Issue judgments, in forms consistent with Fed. R. Civ. P. 65(d), temporarily, 
3 preliminarily and permanently enjoining the defendants and their officers, agents, 
4 servants, employees, and attorneys, and those persons in active concert 
or 
participation with any of them, who receive actual notice ofthe judgment by 
6 personal service or otherwise, and each of them, from violating Sections 5(a), 5(c) 
7 and l7(a) 
of the Securities Act, 15 U.S.C. §§ 77e(a), 77e(c) and 77q(a), and 
8 Section 
lOeb) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 
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17 C.F.R. § 240.l0b-5. 
III. 
11 Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 
12 order and a preliminary injunction freezing the assets of each ofthe defendants, 
13 prohibiting each of the defendants from destroying documents, granting expedited 
14 discovery, and requiring accountings from each ofthe defendants. 
IV. 
16 Order each defendant to disgorge all ill-gotten gains from their illegal 
17 conduct, together with prejudgment interest thereon. 
18 V. 
19 Order each defendant to pay civil penalties under Section 20(d) ofthe 
Securities Act, 
15 U.S.C. § 77t(d), and Section 21 (d)(3) ofthe Exchange Act, 15 
21 U.S.C. § 78u(d)(3). 
n VI. 
23 Retain jurisdiction ofthis action in accordance with the principles of equity 
24 and the Federal Rules 
of Civil Procedure in order to implement and carry out the 
terms 
of all orders and decrees that may be entered, or to entertain any suitable 
26 application 
or motion for additional relief within the jurisdiction ofthis Court. 
27 III 
28 III 
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'VII.
 
Grant such other and further relief as this Court may detennine to be just and 
necessary. 
DATED: 
March 23,2009 
David 
J. Van Havennaat 
Attorney for Plaintiff 
Securities and Exchange Commission 
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DAVID J. VAN HAVERMAAT (Cal Bar No. 175761) I ~:"" :% r-- :;, '~---;: :~Email: vanhavermaatd02s~c-"gov \ (-:; :: .... , ::::0 -'11\ L':'LORRAINE B. ECHA\lARRIA (Cal. Bar No. 191860) ! , N\ ; ... ~~~ :~ w r-­
E-mail: echavarrial02sec.gov 7~ (/~ 

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KAROL L.K.POLL'OCK (Cal. Bar No. 77009) \ P1· , 
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<..n ..,tI (") '2I >g.- - wAttorneys for Plaintiff \ N~~Securities and Exchange Commission -1 

Rosalind R. Tyson, Regional Director I 
Michele Wein L<!Y!le, Associate Regional Director 
John M. McCoy III, Regional Trial Counsel 
5670 Wilshire Boulevard, 11 th Floor 
Los Angeles, California 90036-3648 
Telephone: (323) 965-3998 
FacsImile: (323) 965-3908 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

;» itCV,09- 01Q'4 7 
SECURITIES AND EXCHANGE Case No. 
COMMISSION, 

COMPLAINT FOR VIOLATIONS OF 
Plaintiff, THE FEDERAL SECURITIES LAWS 

vs. 

INNOVA ENERGY LLC INNOVA 
LEASING AND MANAGEMENT LLC, 
and CLEMENT EJEDAWE a/k/a
CLEMENT CHAD, 

Defendants. 

Plaintiff Securities and Exchange Commission ("Commission") alleges as 

follows: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this action pursuant to Sections 20(b), 

20(d)(l) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U;S.C. 

§§ 77t(b), 77t(d)(l) & 77v(a), and Sections 21(d)(l), 21 (d)(3)(A), 21(e) and 27 of 

the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(l), 



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78u(d)(3)(A), 78u(e) & 78aa. Defendants have, directly or indirectly, madp use of 

the means or instrumentalities of interstate commerce, of the mails, or of the 

facilities of a national securities exchange in connection with the transactions, acts, 

practices and courses ofbusiness alleged in this Complaint. 

2. Venue is proper in this district pursuant to Section 22(a) of the 

Securities Act, 15 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. 

§ 78aa, because certain of the transactions, acts, practices and courses of conduct 

constituting violations of the federal securities laws occurred within this district, 

and all of the defendants reside and/or are located in this district. 

SUMMARY 

3. This matter involves the ongoing fraudulent offer and sale ofmore 

than $1.3 million of securities by defendant Clement Ejedawe a/k/a Clement Chad 

("Ejedawe") through two entities that he controls: Innova Energy LLC and Innova 

Leasing and Management LLC, both Nevada limited liability corporations 

(together, "Innova" and, collectively with Ejedawe, "Defendants"). 

4. From at least September 2007 through December 2008, the 

Defendants have raised at least $1,381,000 from at least 31 investors in an ongoing 

oil and gas investment fraud. Ejedawe, Innova, and other sales representatives 

solicit investors by cold-calling them from a boiler room in Los Angeles, 

California. The Defendants represent to investors that their money will be invested 

in various oil and gas ventures and that they will receive monthly payments of 

$4,000 to $5,000 for each $50,000 invested. 

5. Contrary to their representations to investors, the Defendants are not 

using investor funds for oil and gas ventures. Instead, they are using investor 

funds to pay undisclosed commissions to sales representatives, to pay for 

Ejedawe's personal expenses such as rent, automobiles, church donations, court 

fees for a relative, and purchases at retail stores, and to make small payments to 

complaining investors. In addition to misrepresenting the use of investor funds, 

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the Defendants are misrepresenting the returns earned by investors and the ;status 

of Innova's oil and gas operations. 

6. The Defendants also misrepresent the existence and nature of state 

regulatory actions involving Ejedawe. Ejedawe is the subject of at least seven 

separate state cease-and-desist or desist-and-refrain orders relating to his 

unregistered offerings of securities, including orders from California, Alabama, 

Pennsylvania, Maryland, Kansas, and Washington. None of these state orders are 

disclosed in Innova's offering materials provided to investors. 

7. Ejedawe was the principal of another company, Rosewood Energy, 

which conducted another oil and gas offering. Several states, including Maryland 

and Kansas, issued orders against Rosewood and Ejedawe in connection with that 

offering. On October 9,2007, Ejedawe's attorney represented to Commission staff 

that Rosewood had been out ofbusiness since December 2006. Ejedawe's attorney 

claimed that "as a result of the [state] cease and desist orders and attorneys' fees 

associated with dealing with them, Mr. Ejedawe shut down the business and moved 

on to other businesses unrelated to anything that could be deemed a security." 

8. Despite the state actions and assurances from his attorney, Ejedawe, 

through Innova, is still actively soliciting investors. The Defendants continue to 

operate and update Innova's website, encouraging potential investors to invest in 

Innova. Moreover, Ejedawe and Innova are lulling investors into believing their 

investment is viable. For example, on October 13,2008, an Innova sales 

representative falsely informed one investor that (1) Innova was waiting for 

permits to start drilling; and (2) Innova would start drilling around November 

2008. In the first week ofMarch 2009, Ejedawe told this same investor that 

drilling would begin in April 2009. 

9. The Defendants, by engaging in the conduct described in this 

Complaint, have violated, and unless enjoined will continue to violate, the 

antifraud and securities registration provisions of the federal securities laws. By 

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this complaint, the Commission seeks emergency relief against the Defend~mts, 

including a temporary restraining order, an asset freeze, accountings, an order 

expediting discovery, and an order prohibiting the destruction of documents, as 

well as preliminary and permanent injunctions, disgorgement with prejudgment 

interest, and civil penalties. 

DEFENDANTS 

10. Innova Energy LLC was incorporated in Nevada on May 8,2008. 

Clement Ejedawe is listed as its managing member. Innova is not registered with 

the Commission in any capacity. Since 2008, Innova Energy has been operating 

out of a leased office in Los Angeles, California. 

11. Innova Leasing and Management LLC was incorporated in Nevada on 

December 20,2006. Clement Ejedawe is listed as its Manager. Innova Leasing is 

not registered with the Commission in any capacity. Innova Leasing's website 

indicates that its corporate headquarters are in Houston, Texas, but it has actually 

been operating out of a leased office in Los Angeles, California. 

12. Clement Ejedawe, alk/a Clement Chad, age 51, is believed to be a 

Nigerian national. For the last several years he has been residing in Westchester, 

California, where he has been operating Innova and other oil and gas ventures. 

Ejedawe is the managing director of Innova. Ejedawe has never been registered 

with any broker-dealers or investment advisers. 

THE FRAUDULENT OFFERING 

A. Overview And Structure Of The Investment Program 

13. Ejedawe began offering Innova securities out of a boiler room in Los 

Angeles, California in approximately December 2006. Initially, Ejedawe 

incorporated Innova in Nevada and opened two accounts with Wells Fargo Bank in 

Innova's name, into which Innova deposited investor funds. Ejedawe and Innova's 

sales agents tell investors that they are purchasing interests in either an entity 

called Bluff Creek Prospect or an entity known as the Innova Leasing Joint 

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Venture. The Bluff Creek Prospect investors are sold purported working i¥terests 

in oil and gas leases. The Innova Leasing Joint Venture investors are sold interests 

in oil and gas drilling equipment. All investor funds for both entities are pooled 

into Innova's Wells Fargo bank accounts. 

14. The Defendants promise investors a return between $4,000 and $5,000 

per month on an investment of $50,000. Ejedawe provides investors with a private 

placement memorandum and glossy sales brochures. The only individual identified in 

the materials is Ejedawe, who touts his purported "twenty-five years in the drilling 

industry" experience in both the offering materials and in conversations with 

investors. None of the offering materials that are provided to prospective investors 

include financial statements. The offerings are not registered with the Commission in 

any capacity. 

15. The Bluff Creek sales materials have included two unsigned letters 

dated June 15, 2006 and July 16, 2006 from a petroleum engineer. The first letter, 

addressed to an Innova representative, purported to analyze the number of "Proven 

Un-developed (PUD) oil and gas well locations remaining to be drilled" on 

Innova's properties in Texas. The letter identified 121 well locations with reserves 

from "12,000 to 30,000 barrels per well." The second letter estimated valuation of 

Innova's wells at about $30 million assuming a $70 per barrel price of oil. In fact, 

Innova does not actually own or lease any oil or gas wells or properties in Texas. 

16. Innova and Ejedawe offer and sell the Innova investments through 

general solicitation efforts such as cold calling from lead lists and their internet 

website, www.innovaleasing.com. 

III 

III 

III 

III 

III 

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1 B. The Defendants Are Misappropriating Investor Funds And Making
 

2 Material Misrepresentations Regarding Investments In Innova
 

3 1. The Defendants Are Misusing Investor Funds For
 

4 Ejedawe's Personal Expenses and For Substantial
 

5 Commissions To Innova Sales Representatives
 

6 17. In the offerings and in communications with investors, the Defendants 

7 market Innova as an established oil and gas drilling venture. The Defendants 

8 promise to invest investor funds in either oil and gas leases or drilling equipment. 

9 Contrary to their representations to investors, Innova has not purchased or invested 

lOin any oil and gas leases and has made only one purchase of drilling equipment, a 

11 used drilling rig purchased on December 30,2007 for $355,000. Ejedawe, using 

12 the name Clement Chad, purchased the rig. Ejedawe made an elaborate videotape 

13 of the rig, which is available for viewing on Innova's web site. 

14 18. Innova disclosed to investors in a private placement memorandum 

15 that Innova Energy LLC would receive a management fee of 1.4285% of funds 

16 raised. Contrary to this disclosure, however, the Defendants have used more than 

17 one-third of investor funds to pay personal expenses ofEjedawe. 

18 19. Ejedawe has misappropriated much of the investor funds. From 

19 September 2007 through December 2008, the Defendants raised at least 

20 $1,381,000 from investors. During the same period, Ejedawe used investor funds 

21 to pay his personal expenses totaling more than $600,000, including cash 

22 withdrawals totaling more than $350,000, personal expenses including his 

23 apartment rent, credit card payments, car payments, and charitable donations, 

24 including donations to his church. Ejedawe also used Innova investor funds to pay 

25 $11,500 to Rosewood Energy, the now-defunct offering that was the subject of 

26 cease-and-desist orders from several states and of which Ejedawe was a principal. 

27 20. The Defendants also fail to disclose to investors that Innova sales 

28 representatives are paid commissions ofup to 20%. Innova, through Ejedawe, 

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entered into an independent consultant agreement with certain sales . 

representatives. The agreement states that the sales representatives will receive a 

commission of 20% as long as the representative raises more than $100,000 from 

Innova investors during the calendar month. The Defendants do not disclose the 

sales commissions to Innova investors. Rather, they tell Innova investors that only 

2.3809% of funds raised are used to pay "syndication costs," which they define as 

"costs including sales commissions and other selected expenses" that are incurred 

in connection with the offering. From September 2007 through December 2008 

the Defendants paid over $420,600 to Innova's sales representatives. 

2. The Defendants Misrepresent Investor Returns 

21. In sales materials prepared in April 2008, Innova promised monthly 

income for Bluff Creek investors of approximately $4,500 per month on a $50,000 

investment. In July or August 2007, an investor in Innova Leasing Joint Venture 

was told by an Innova sales representative that he would receive approximately 

$4,500 per month from a $50,000 investment. Except for a few small payments to 

complaining investors, investors have not received the promised returns. 

3.	 The Defendants Misrepresent The Status Of Innova's 

Operations 

22. Ejedawe, Innova and the sales agents falsely represent in both the 

private placement memoranda and in oral communications with investors that 

Innova has applied for and secured the necessary permits to begin drilling for oil. 

Permits for the proposed well sites identified in Innova's private placement 

memoranda have never been acquired by Innova Energy LLC or Innova Leasing 

and Management LLC. 

23. On December 14, 2007, the Defendants sent a memorandum to 

investors claiming that the Pennsylvania Department of Transportation had 

inspected Innova's drilling rig and granted Innova approval to operate the rig in the 

State ofPennsylvania. This representation was false. 

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4.	 The Defendants Misrepresent The Existence And N~ture Of 

State Regulatory Actions Involving Ejedawe 

24. None of the offering materials inform investors that Ejedawe is the 

subject ofcease-and-desist orders relating to unregistered offerings of securities from . 

California, Alabama, Maryland, Kansas, Pennsylvania, Illinois, and Washington. 

25. In spite of their knowledge of the state orders, Ejedawe and Innova 

continue to offer and sell Innova's securities. In fact, they misrepresent to investors 

the nature of the state actions. For example, Ejedawe sent an email to an investor 

on August 19, 2008 advising him that the Alabama order was the result of a 

complaint from a "non-investor" about "persistent calls to his residence by our 

sales people." In a telephone conversation on October 13,2008, an Innova sales 

representative advised another investor that the California order was based on a 

complaint from a "disgruntled old man." In fact, both the California and Alabama 

orders resulted from a cold call that Innova sales representatives unknowingly 

made to an Alabama Securities Commission investigator. 

FIRST CLAIM FOR RELIEF
 

Unregistered Offer And Sale Of Securities
 

Violations of Sections 5(a) and 5(c) of the Securities Act
 

(Against All Defendants)
 

26. The Commission realleges and incorporates by reference paragraphs 1 

through 25 above. 

27. The Defendants, and each of them, by engaging in the conduct 

described above, directly or indirectly, made use of means or instrumentalities of 

transportation or communication in interstate commerce or of the mails, to offer to 

sell or to sell securities, or to carry or cause such securities to be carried through 

the mails or in interstate commerce for the purpose of sale or delivery after sale. 

28. No registration statement has been filed with the Commission or has 

been in effect with respect to the offering alleged herein. 

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29. By engaging in the conduct described above, the Defendants ,;iolated, 

and unless restrained and enjoined will continue to violate, Sections 5(a) and 5(c) 

of the Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c). 

SECOND CLAIM FOR RELIEF
 

Fraud In The Offer Or Sale Of Securities
 

Violations of Section 17(a) of the Securities Act
 

(Against All Defendants)
 

30. The Commission realleges and incorporates by reference paragraphs 1 

through 25 above. 

31. The Defendants, and each of them, by engaging in the conduct 

described above, in the offer or sale of securities by the use of means or 

instruments of transportation or communication in interstate commerce or by use 

of the mails directly or indirectly: 

a.	 with scienter, employed devices, schemes, or artifices to 

defraud; 

b.	 obtained money or property by means ofuntrue statements of a 

material f~ct or by omitting to state a material fact necessary in 

order to make the statements made, in light of the 

circumstances under which they were made, not misleading; or 

c.	 engaged in transactions, practices, or courses ofbusiness which 

operated or would operate as a fraud or deceit upon the 

purchaser. 

32. By engaging in the conduct described above, the Defendants violated, 

and unless restrained and enjoined will continue to violate, Section 17(a) of the 

Securities Act, 15 U.S.C. § 77q(a). 

III 

III 

III 

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THIRD CLAIM FOR RELIEF	 .
 

Fraud In Connection With The Purchase Or Sale Of Securities
 

Violations of Section lO(b) of the Exchange Act and Rule lOb-5 Thereunder
 

(Against All Defendants)
 

33. The Commission realleges and incorporates by reference paragraphs 1 

through 25 above. 

34. The Defendants, and each of them, by engaging in the conduct 

described above, directly or indirectly, in connection with the purchase or sale of a 

security, by the use ofmeans or instrumentalities of interstate commerce, of the 

mails, or of the facilities of a national securities exchange, with scienter: 

a.	 employed devices, schemes, or artifices to defraud; 

b.	 made untrue statements of a material fact or omitted to state a 

material fact necessary in order to make the statements made, in 

the light of the circumstances under which they were made, not 

misleading; or 

c.	 engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon other 

persons. 

35. By engaging in the conduct described above, the Defendants violated, 

and unless restrained and enjoined will continue to violate, Section 10(b) of the 

Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 

§ 240.10b-5. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court: 

L 

Issue findings of fact and conclusions of law that the defendants committed 

the alleged violations. 

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1 II. .
 

2 Issue judgments, in forms consistent with Fed. R. Civ. P. 65(d), temporarily, 

3 preliminarily and permanently enjoining the defendants and their officers, agents, 

4 servants, employees, and attorneys, and those persons in active concert or 

participation with any of them, who receive actual notice of the judgment by 

6 personal service or otherwise, and each of them, from violating Sections 5(a), 5(c) 

7 and l7(a) of the Securities Act, 15 U.S.C. §§ 77e(a), 77e(c) and 77q(a), and 

8 Section lOeb) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 

9 17 C.F.R. § 240.l0b-5. 

III. 

11 Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 

12 order and a preliminary injunction freezing the assets of each of the defendants, 

13 prohibiting each of the defendants from destroying documents, granting expedited 

14 discovery, and requiring accountings from each of the defendants. 

IV. 

16 Order each defendant to disgorge all ill-gotten gains from their illegal 

17 conduct, together with prejudgment interest thereon. 

18 V. 

19 Order each defendant to pay civil penalties under Section 20(d) of the 

Securities Act, 15 U.S.C. § 77t(d), and Section 21 (d)(3) of the Exchange Act, 15 

21 U.S.C. § 78u(d)(3). 

n VI. 

23 Retain jurisdiction of this action in accordance with the principles of equity 

24 and the Federal Rules of Civil Procedure in order to implement and carry out the 

terms of all orders and decrees that may be entered, or to entertain any suitable 

26 application or motion for additional relief within the jurisdiction of this Court. 

27 III 

28 III 

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'VII.
 

Grant such other and further relief as this Court may detennine to be just and 

necessary. 

DATED: March 23,2009 
David J. Van Havennaat 
Attorney for Plaintiff 
Securities and Exchange Commission 

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