SEC v. ROBERT A. HELMS; JANNIECE S. KAELIN; DEVEN SELLERS; ROLAND BARRERA; VENDETTA ROYALTY PARTNERS, LTD.; VENDETTA ROYALTY MANAGEMENT, LLC, et al., No. 1:13-cv-01036, Western District of Texas (Dec. 31, 2012) — Complaint

S
.
IN THE
UNITED
STATES
DISTRICT
COURT
FOR  THE
WESTERN
DISTRICT
OF TEXAS
AUSTIN
DIVISION
SECURITIES AND
EXCHANGE
COMMISSION,
Plaintiff,
vs.
ROBERT A.
HELMS,
JANNIECE
S. KAELIN,
DEVEN
SELLERS,
ROLAND
BARRERA,
VENDETTA
ROYALTY  PARTNERS,
LTD.,
VENDETTA
ROYALTY
MANAGEMENT, LLC,
VESTA
ROYALTY
PARTNERS, LP,
VESTA ROYALTY
MANAGEMENT,
LLC,
IRON
ROCK
ROYALTY
PARTNERS, LP,
IRON ROCK
ROYALTY
MANAGEMENT,
LLC,
ARCADY
RESOURCES,  LLC,
BAREFOOT
MINERALS,
G.P.,
G3
MINERALS,
LLC,
HALEY  OIL
COMPANY,
INC.,
LAKE
ROCK,
LLC,
SEBUD
MINERALS, LLC, and
TECHNICOLOR
MINERALS,
G.P.,
Defendants,
and
WILLIAM
L.
BARLOW,
and
GLOBAL
CAPITAL VENTURES,
LLC,
Relief
Defendants,
solely for the
purposes of
equitable
relief.
COMPLAINT
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A13CV1
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Civil Action
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.
.
For
its
Complaint,
Plaintiff
Securities
and Exchange
Commission
("Commission")
alleges
as follows:
I.
Summary
Defendants
Robert
A.
Helms  and
Janniece
S.
Kaelin are
engaged in
fraudulent
securities
offerings
from
an
office
in
Austin,
Texas.
Since  at
least
July
2011,  they
have
offered
investors
securities
issued
by
Defendant  Vendetta
Royalty
Partners, Ltd.
("Vendetta
Partners"),
a
limited
partnership
they
control.
Through
December
31, 2012,
they
have
raised at
least
$17.9
million
from at least
80 investors in
at least 13
states,
promising
them that
Vendetta
Partners
would use
more than
99%
of the
investment
proceeds
to
acquire
a lucrative
portfolio
of
oil-and-
gas royalty
interests.
2.
In
reality,
Helms  and
Kaelin
misappropriated
the
vast
majority
of the
Vendetta
Partners
offering
proceeds,
using
the
funds
to
cover
personal
expenses,
payments
to
Relief
Defendants
William
L. Barlow
and
Global  Capital
Ventures,
LLC ("Global
Capital"),
payments
to
other
entities they
controlHaley
Oil
Company, Inc. ("Haley
Oil"), Technicolor
Minerals,
G.P., ("Technicolor
Minerals"),
and
Barefoot
Minerals,
G.P.
("Barefoot")and
payments
to
investors
of
approximately
$5.9
million
in
so-called
"Partnership
income."
They
derived
the
so-
called
Partnership
income,
however,
primarily
from
offering
proceeds.
In
other
words, Helms
and
Kaelin
operated
a Ponzi
scheme
through
Vendetta
Partners.
In  the
course
of
the
scheme,
Helms and Kaelin
misrepresented  and
omitted
to
disclose
material
facts
to investors.
They
grossly understated
bank-loan
payments
made
with
offering
proceeds.
They
concealed
Vendetta
Partners'
imminent
bank-loan
default.
And
they
represented
that
there
were
no
material
legal
proceedings pending
against them
or
Vendetta
Partners
when, in
fact, they
and
Vendetta
Partners were
defendants in
a civil
case
alleging
they

.
.
defrauded the
plaintiff
of
$1
.2
million, and
were  subject
to other legal
proceedings.
4. In
addition,  Helms
and Kaelin
paid combined
commissions
totaling
$423,500
to
Defendants David
Sellers  and
Roland  Barrera,
who sold
Vendetta
Partnership  securities
to  an
investor
for
$3,050,000.
Sellers and Barrera
falsely
represented to the
investor that
they would
receive only
"small"
commissionsin
keeping
with Vendetta
Partners
offering
documents
stating
that
promotional  expenses
would not
exceed
$50,000when
their
actual
commission
was
nearly
14% of the
purchase
price.
After Vendetta
Partners,  Helms
and Kaelin
launched
two
more  fraudulent
offerings, Vesta
Royalty Partners,
LP ("Vesta
Partners")
in
2012 and  Iron
Rock Royalty
Partners
LP
("Iron Rock
Partners")
in 2013.
For each of
these limited
partnerships,
they  control
the
general
partner,
Vesta Royalty
Management,
LLC ('Vesta Management")
and
Iron
Rock
Royalty
Management,
LLC
("Iron Rock
Management"),
respectively.
In the Vesta
Partners
offering,
they have
touted
potential investment
returns
ranging from
300% to
500% to be
achieved  in
just five
to seven
years.
In reality,
their return
projections
are
baseless.
6.
They are promoting
the Iron
Rock
Partners
offering  through
Iron Rock
Management  and
other companies
they control,
specifically
Defendants
SeBud Minerals,
LLC
("SeBud Minerals"),
Lake
Rock,
LLC
("Lake
Rock"),
G3 Minerals,
LLC
(G3
Minerals),
and
Arcady  Resources,
LLC  ("Arcady
Resources").
In
the Iron
Rock Partners
offering, they
describe
their
intent
to raise
$300
million
by
April 2014
and tout their
"honesty and
trustworthiness"  and
Vendetta
Partners'
"successful
performance."
In reality,
Vendetta  Partners
is  a Ponzi
scheme,
and
they are
dishonest  and
untrustworthy.
By
committing
the
acts alleged
in this
Complaint, the
Defendants  directly
and
indirectly
engaged
in, and unless
restrained  and
enjoined
by the Court will
continue
to
engage in,

.
I
acts, transactions,  practices,
and
courses
of business
that violate  the anti-fraud
provisions
of the
federal
securities laws,
specifically
Section
17(a)
of the Securities
Act
of 1933 ("Securities
Act")
[15
U.S.C.
§
77q(a)]
and  Section
10(b) of the Securities
Exchange Act
of
1934 ("Exchange
Act")
[15
U.S.C.
§
78j(b)]  and
Rule 10b-5
thereunder [17 C.F.R.
§
240.lOb-5].  Defendants
Sellers
and
Ban-era
also
violated
Exchange
Act  Section
15(a)
[15
U.S.C.
§
78o(a)]  by being unregistered
brokers in
the offerings
described herein.
8. The
Commission brings
this action
seeking permanent injunctions,
disgorgement
plus prejudgment
interest,
and  civil penalties,
as to each Defendant
and disgorgement
as to each
Relief Defendant
and
all
other equitable
and ancillary
relief to which the
Court determines
the
Commission
is entitled.
II. Jurisdiction
and
Venue
9. The
Court has
jurisdiction over
this  action under
Section  20(d) and 22(a)
of the
Securities
Act
[15 U.S.C.
§
77t(d)  and
77v(a)]  and  Sections
21(d), 21(e), and
27 of the
Exchange
Act
[15
U.S.C.
§
78u(d),  78u(e)
and  78(aa)].  Venue
is
proper because
the
Defendants
and
Relief
Defendants
reside
in, and
a substantial part of the
events and
omissions
giving rise
to the claims
occurred
in, the Western
District of Texas.
III. The
Parties
10.
Plaintiff
Commission is
an agency of
the United States
government.
11.
Defendant
Robert
A. Helms is
a
natural
person residing
in Austin,  Texas.
12.
Defendant
Janniece
S. Kaelin is  a natural
person residing
in
Austin,  Texas.
13.
Defendant
Deven
Sellers
is
a
natural
person residing
in
Arvada,  Colorado.
14. Roland
Ban-era
is a
natural person
residing
in
Costa Mesa,  California.
15.
Defendant
Vendetta
Partners
is
a
Texas limited
partnership
in
Austin,  Texas.

.
.
16. Defendant
Vendetta
Management
is a Texas
limited liability
company
in Austin,
Texas.
17.
Defendant Vesta
Partners
is  a Texas
limited
partnership
in
Austin,  Texas.
18.
Defendant
Vesta
Management
is
a
Texas
limited
liability
company
in
Austin,
Texas.
19.
Defendant Iron
Rock Partners
is
a
Delaware
limited partnership
principally
operating
in Austin,
Texas.
20. Defendant
Iron
Rock Management
is a
Delaware
limited
liability
company
principally
operating
in Austin,
Texas.
21. Defendant Arcady
Resources
is a Texas
limited
liability
company
in
Austin,
Texas.
22. Defendant
Barefoot
Minerals
is a Texas
general
partnership
in
Austin,
Texas.
23. Defendant
G3
Minerals is a
Texas
limited liability
company
in
Austin,
Texas.
24.
Defendant Haley
Oil
is an  Illinois
corporation
principally
operating
in Austin,
Texas.
25.
Defendant Lake
Rock is  a
Texas
limited liability
company
in Austin,
Texas.
26. Defendant SeBud
Minerals
is
a
Texas
limited
liability
company  in Austin,
Texas.
27. Defendant
Technicolor
Minerals
is a
Texas
general
partnership
in
Austin,  Texas.
28.
Relief Defendant
William
Barlow is a
natural
person residing
in
Austin,  Texas.
29.
Relief
Defendant Global
Capital
is
a
Texas
limited liability
company
in Austin,
Texas.
V.
Facts
A.
Background

.
.
30. Helms and Kaelin,  through  entities they control, have offered
and sold  and
continue
to offer and sell securities in the  form of limited-partnership  interests issued
by
Defendants
Vendetta Partners, Vesta Partners,
and Iron Rock  Partners.   Helms
and
Kaelin
control
each entity  through
its general partnerDefendants Vendetta Management,  Vesta
Management,
and
Iron  Rock Management,  respectively.
31. Helms
and Kaelin  operate  each limited  partnership  from  an office
at
8101
Cameron Rd.
Suite 109, in Austin,  Texas.  They utilize
a
sales  team, including
Sellers and
Barrera,
to offer the securities  for sale
to
investors
by
telephone,
by email, and by in-person
presentations.
Helms and Kaelin
also directly offer and sell the
securities
to investors in person
at
the
Austin office and through  emails
and
phone
calls.
B.
The Vendetta Partners Offering
32. Helms
and Kaelin  formed Vendetta Partners in  2009.
At or about  that  time,
Vendetta
Partners acquired certain oil-and-gas
royalty interests, along with limited
partners,
from
another limited
partnership associated with
Helms  and Kaelin.   From
January 1, 2011, through
December
31, 2012, Vendetta
Partners'  royalty interests generated income
totaling
approximately
$1.4
million.
33. On
August
15, 2011, Vendetta  Partners  filed with the
Commission a securities-
offering notice
on Form D, signed
by Helms,  stating
that Vendetta Partners sought
to raise
$50
million
by  selling limited-partnership interests.
The Form
D falsely stated that Vendetta
Partners
had not
yet sold any securities
in  the  offering.  In reality,  Vendetta  Partners  sold
securities
to two
investors on
July
29
and  30,
2011, in exchange for
$275,000
combined.  Moreover,  the
Form
D
listed Vendetta
Management, Helms,  and Kaelin
as the offering's only "promoters"
and falsely
stated that no promoter
had
received,  or would  receive,
any offering proceeds.
In fact,
at
the
Page 6 ofl6

S
.
time of filing
Helms  and
Kaelin
had already
misappropriated nearly
half
of
the $275,000
received on
July29
and
30,
2011.
Upon receipt,
they
transferred
$135,000
of these
funds
to
Vendetta
Management
and, from  there,
withdrew  $19,450
in
cash  and
transferred an
additional
$18,000
to Helms.
34.
In
the Vendetta
Partners  offering, Helms
and Kaelin distributed
to prospective
investors
a private-placement
memorandum
("PPM"),  which
purported
to explain the
Vendetta
Partners
investment.  The
PPM represented
that Vendetta
Partners had
two
"principal
objectives":
(1) to
purchase
oil-and-gas
"Royalty
Interests"
and
(2)
"to  generate Partnership
income
from
such
Royalty
Interests."
It also represented that
the "Partnership
will distribute
Partnership
income quarterly."
35. The
PPM
contained  several false
and misleading
statements. It
touted Helms'
oil-
and-gas
experience,
representing
that
he had
"worked with
various  mineral
companies over
the
last 10
years
advising
management
on issues involving
the acquisition
and
management of
royalty interests,
mineral
properties and related
legal  and
financial  issues."
This statement
was
misleading
because
it did not
disclose
that
Helms
the
oil-and-gas  experience
came almost
entirely
from
operating
Vendetta
Partners and
its
affiliated or predecessor
companies.
36.
Under
the heading,
"Accounting,"  the PPM
also falsely
stated
that
Vendetta
Management
would furnish
investors periodic
reports  on
Vendetta
Partners'
property
acquisitions and
operational
results. In fact,
it never furnished
investors
such reports.
37.
Finally, under the
heading
"Litigation,"  the PPM
falsely
stated:
"There are
no
material  pending
legal
proceedings against
the Partnership,  the
General
Partner or its
Affiliates."
In
reality,  Vendetta
Partners,
Vendetta  Management,
Technicolor Minerals,
Helms,
Kaelin,
and
other entities
affiliated  with
them were
engaged
in material
litigation
during the Vendetta

.
S
Partners  offering. A
private  party sued them in
December 2011, alleging  that they committed
fraud
by
purporting
to  sell mineral
interests  that they did not
even own
in exchange  for
S
1.2
million.   The
Illinois EPA  initiated  action against
Haley
Oil in May 2012, alleging illegal
"release  incidents."
And  the
IRS initiated  action
against Kaelin
in October 2012, relating to  a tax
liability.
38. The  PPM
further represented  that Vendetta
Partners  would use the anticipated
$50
million offering proceeds  solely for three
purposes:
(i)  to purchase royalty
interests;
(ii) to pay
10%
of Vendetta Partners'
$3,795,000
credit
facility;
and (iii) to pay promotional expenses.  The
PPM contained
a
summary of the "estimated
application
and use of the proceeds," which stated
that Vendetta Partners  would  apply and use the
$50
million as follows:
Purchase Costs of Royalty Interests
Loan Repayment
Promotional Expenses
Application
Percent
of
of
Subscriptions
Maximum  Proceeds
$49,570,500
99.14%
$
379,500 .76%
$
50,000 .10%
39. From July 29, 2011,
through December 31, 2012, Helms  and Kaelin  raised at least
$17.9
million through the Vendetta Partners offering
from at least 80 investors in at least 13
states. Apart from the offering proceeds and
the
$1.4
million in cash generated  from legitimate
royalty interests, which  combined totaled
approximately
$19.3
million,  Vendetta had no
significant  cash assets. Rather than
honor
the PPM representations regarding the use of
proceeds, Helms and Kaelin, through a
number of entities under their control, misappropriated
the vast  majority of the funds.

.
.
40. Helms
and Kaelin controlled and oversaw
the use of all funds  that
came into
Vendetta Partners.
They  shared signatory
authority
on its bank accounts
and
on the bank
accounts
of Vendetta
Management.
From
January
1, 2011, through December
31, 2012,
Vendetta
Partners,
at
the
direction
of Helms  and Kaelin, transferred
approximately
$4.4
million
to Vendetta Management.
Because
this was  far in
excess of the
$1.4
million
generated  from
legitimate
royalty interest income,
at least
$3
million was misappropnated
investor
funds.
Out
of
the
$4.4
million
transferred
to Vendetta
Management, they  transferred
approximately
$1.4
million to Helms  and
an additional
$102,000
to Barefoot
Minerals.
41.
In
addition to the
$4.4  million transferred
to Vendetta
Management,  Helms
and
Kaelin  transferred
approximately
$702,000
directly to Helms'  bank
account. They transferred
an
additional
$193,000
to Technicolor Minerals.
They
paid approximately
$1.6
million
to cover
promotional  expenses,
approximately
32 times
the amount promised in the PPM.
They used
approximately
$1.1
million for
loan repayment, approximately
four times
the amount
promised
in  the  PPM. And
they
spent approximately
$1.6
million to purchase royalty
interests, more
than
90%
less
than promised in
the PPM.
42.
Vendetta Partners,
at the direction of Helms and
Kaelin,
also used  approximately
$5.9
million to make
so-called partnership-income
distributions
to investors.
They
used
money
from later
investors
to pay these  distributions to earlier
investors.
In this fashion,
Helms  and
Kaelin
created  the illusion
that Vendetta Partners
was
a profitable  enterprise
when, in fact,  it
was
a fraudulent
Ponzi scheme.
43. Vendetta
Partners,
at
the direction
of Helms  and Kaelin,
transferred
approximately
$86,737
combined
to Relief Defendant Barlow
and his  company,
Relief
Defendant
Global Venture.
Neither Barlow nor
Global Venture had any  legitimate
claim
to the
Page 9 ofl6

.
.
proceeds.
Barlow and
Global
Venture  acquired
at least some
of these
proceeds
in
round-trip
transactions with
companies that Helms
and
Kaelin
controlled.  Helms
orchestrated
these
transactions was
to
create fictitious
income
to support the
fraudulent
partnership-income
distributions.
44. For
example,
on November 17,
2011, Helms
and
Kaelin
transferred
$2,208,800
from
Vendetta
Partners
to Barlow.
The
next
day,
Barlow  transferred
$2,200,300
to
Defendant
Haley
Oil, a company
that Helms
controlled,
retaining
$8,500.
On
December 5, 2011,
Helms
transferred
$1.4
million
from
Haley Oil
to
Vendetta Partners
and falsely
recorded
it as royalty
income
in Vendetta
Partners'
accounting
system.
On
February 1, 2012,
Helms
transferred
$550,000
from
Haley
Oil
to
Vendetta Partners
and falsely
recorded it
as
"lease bonus" income
on
Vendetta
Partners'
accounting
system.   Helms
and
Kaelin
distributed
the nearly
$2
million from
the
roundtnp
transactions
to Vendetta Partners
investors,
falsely
characterizing
these payments
as
partnership-income
distributions.
Haley
Oil
retained
investor funds
totaling
$245,300
that
it
received
in
the
roundtnp
transactions.
45.
On several
occasions,
Helms
and Kaelin
provided
investors tours
of their Austin
office
to promote
their
securities
offerings.  On
at least one
such
tour in
August 2012,
they
falsely
represented
to two investors
that
Vendetta
Partners
paid
its
operating
expenses,
including
Helms
and Kaelin's
salaries,  from
the ongoing
revenue
stream  generated
by
Vendetta
Partners'
royalty
interest
portfolio.  They
falsely
represented that the investors
would  earn
a
return of
150% to
200% on the
investment
within several
months.
And
they
represented that
they
would
use
the proceeds
from the
investors'
limited-partnership
purchase$3,050,000--to
buy
out
another
investor's
limited-partnership interest.
In reality,
Helms and
Kaelin
misappropnated part
of the
investors'
money,
using
it to cover
undisclosed  expenses and
to pay
commissions
to
Page 10 ofl6

.
.
Sellers
and  Barrera,
rather than
buying  out another investor.
46. During
office
tours,  Helms  and  Kaelin  introduced
potential  investors
to Vendetta
Management's
financial
analyst, who  was
a student at the University of Texas
and who  had
not
yet attained
a degree.   Helms
and Kaelin  falsely
stated
to potential investors  that
the  financial
analyst had a degree
from
the
University of Texas.  Helms  and
Kaelin
prohibited the
financial
analyst,
under threat
of demotion,  from
telling  investors that he did
not  actually have
a degree.
47.
Vendetta
Partners,
at the direction
of Helms and Kaelin,
paid  Defendants
Sellers
and Barrera
approximately
$400,000
in
commissions,  which they  split
almost  evenly,
for the
$3,050,000
investment
described
in
paragraph 45,
above.
When offering
the investment,
Sellers  and Barrera
represented
to the investors
that they  would split
a "small"
commission.
In
reality,
their combined
commission
was more  than
13% of the investment  and
more than eight
times the PPM's
$50,000
limit
for promotional
expenses.   Because  they
did not disclose
the
actual size
of their
commission,
their  statement that
it would be "small" was misleading.
Sellers
and
Barrera never
corrected
this  misstatement,
even
as they continued to promote
other
offeringsincluding
Vesta
Partners and Iron Rock
partnersto the  same  investors.
C.
The
Vesta Partners
Offering
48.
Since
at
least, July 2012,
Helms, Kaelin,  Sellers,
and  Barrera have
offered
to  sell
investors securities
issued
by Defendant  Vesta  Partners.
At Helms  and
Kaelin's
direction
through Vesta
Management,
Defendants  Sellers
and Barrera  emailed two prospective
investors
a
Vesta
Partners presentation,
describing
the company and
its
offering.  According
to the
presentation, Vesta
Partners
would provide investors "predictable
quarterly
cash distributions
with attractive
yields (targeted
15% 20%  gross annual yields)" and
a 300% to
500% return
within five
to seven years.
It described  Vesta
Partners
managementincluding
Helms
and

.
Kaelinas having
a
"Proven
track
record of
consistent
investor  cash-flows
and overall
market
performance."
And
it
said  that Helms  and
Kaelin
had
experience "managing
and
successfully
exiting
royalty. . .
interest
investments,
including
.   . . Vendetta Royalty
Partners,
Ltd."
49.
These statements
in
the Vesta
Partners presentation  were
false. Helms
and Kaelin
had
no reasonable
basis
to  expect  that
Vesta  Partners would
provide
attractive
cash-distribution
yields
or
a
300% to
500%
return
within
seven
years. Indeed,
their  track
record  included
the
Vendetta Partners
Ponzi
schemepromoted as a business
model virtually
identical
to that
of
Vesta
Partnersin
which they
had
never
earned
a legitimate
profit  for
investors.  And
Vendetta
Partners was
not
a
successful
investment by  any reasonable
standard.
ft
The Iron
Rock Partners Offering
50. On
April
25, 2013, Iron
Rock Partners  filed
with
the
Commission
a Form
D,
signed by Helms
as manager
for
Iron Rock
Partners' general
partner,  Iron
Rock
Management.
The Form
D
indicates that Iron
Rock Partners
seeks  to raise
$300
million
over
a period not
to
exceed one year.
In
addition
to Helms, it lists
the
following
affiliate entities
as the
offering
promoters:
Defendants  Iron
Rock Management,
SeBud
Minerals,  Lake  Rock,
G3 Minerals,
and
Arcady Resources.
It further
says that the
offering
will only
be solicited in
Florida, New
York,
North Carolina,
and
Pennsylvania.
51.
The  Iron
Rock
Form
D
is
false
and
misleading.
Kaelin
and Sellers have
actively
promoted
the
Iron
Rock Partners
offering, but
they
are not
disclosed
as promoters
on the
Form
D.
And Iron
Rock Partners,
through
Helms,
Kaelin,  Sellers,
and
other
affiliated promoters
is
offering
the
securities
in
states
beyond the four
states
listedincluding
in California.
52.
On March
1, 2013,
Sellers
emailed an
investor
located
in California,
attaching
a
"Proposal" in which
Sellers
offered
for sale Iron
Rock Partners
securities.
The
Proposal
falsely

.
fl
stated
that
investors  could
expect
a 300% to
500%
return
in  five to
seven years.
As
is
evident in
Helms
and
Kaelin's
disastrous
Vendetta Partners
oil-and-gas  project,
these
earnings
projections
were
baseless.
It further
said the
Iron Rock
Partners
management
teamincluding
Helms and
Kaelinhas an
"industry
reputation
of
honesty
and
trustworthiness."
In  fact,
Helms  and
Kaelin
were
dishonest
and
untrustworthy,
a fact their
industry
reputation
reflected.
Indeed
others
in  the
industry
sued
them
for
fraud  and
conspiracy.
FIRST
CLAIM
Violations
of
Section
10(b) of the Exchange
Act
115
U.S.C.
§
78j(b)j
and
Rule
lOb-5thereunder
[17
C.F.R.
§
240.lOb-5]
53.
Plaintiff
Commission
realleges
and
incorporates
by reference
paragraphs
1
through 54 of
this
Complaint
as
if set
forth  verbatim.
54.
Each
Defendant,
by
engaging
in
the
conduct  described
above,
directly or
indirectly,  singly
or
in
concert with
others,
in
connection with
the
purchase or
sale of a
security,
by the
use
of
means  or
instrumentalities
of
interstate
commerce,
or
of
the
mails, or
of the
facilities
of a
national
securities
exchange, knowingly
or severely
recklessly:
a.
employed a device,
scheme,
or
artifice
to
defraud;
b.
made
an untrue
statement
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
engaged
in an
act,
practice,
or course
of business
which
operated or
would
operate
as
a fraud
or
deceit
upon a
person.
55.
By engaging
in the
conduct
described
above, each
Defendant
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
lOb-Sthereunder
[17
C.F.R.
§
240.lOb-5].
Page 13
ofl6

fl
SECOND CLAIM
Violations of Section
17(a) of the Securities Act [15
U.S.C.
§
77q(a)J
56. Plaintiff
Commission realleges and incorporates
by
reference
paragraphs
1
through
54 of this
Complaint as if set forth verbatim.
57. Each Defendant,
by  engaging in the conduct above,
singly
or in concert
with
others,
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. knowingly
or severely recklessly
employed
a device,
scheme, or artifice
to
defraud,
or
b. (b) knowingly,
recklessly,
or negligently obtained
money
or property
by
means
of an untrue
statement
of a material fact  or
an omission 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. (c) knowingly,
recklessly,
or negligently  engaged
in
a transaction, practice,
or
course
of business
which operated
or would
operate
as a fraud or
deceit upon
the purchaser.
58. By reason
of the foregoing, each Defendant
violated,
and
unless  enjoined,  will
continue
to violate
Section
17(a) of the
Securities
Act [15
U.S.C.
§
77q(a)J.
THIRD
CLAIM
Violations
of
Section
15(a) of the Exchange
Act
115
U.S.C.
§
78o(a)]
59. Plaintiff
Commission realleges
and incorporates
by
reference
paragraphs
I
through
54 of this
Complaint as if
set  forth verbatim.
60. Defendants
Sellers
and Barrera,
by engaging in
the conduct
described
above,
directly
or indirectly
made  use
of the
mails  or
means or instrumentalities
of interstate
commerce

.
.
to effect  transactions
in, or to induce
or  attempt
to
induce,
the
purchase
or
sale of securities,
without
being registered
as  a broker or
dealer,
or being  associated  with
a registered
broker
or
dealer in
accordance with
Section
15(a) (1) of
the Exchange Act [15
U.S.C.
§
78o(a)  (1)].
61. Accordingly,
Defendants
Sellers  and Barrera
were brokers
within  the
definition
of
that
term  in Section
3(a)(4)
of the Exchange
Act  which
defines "broker"
as any person
"engaged
in
the business
of effecting transactions
in securities
for
the account
of others."
Defendants
Sellers  and Barrera
were never
so registered and,
acted as brokers which
included:
(1)
solicitation
of investors
to purchase securities;
(2) involvement in
negotiations
between
the issuer
and the
investor;  and
(3)
receipt of
transaction-related
compensation.
62. By
reason
of the
foregoing,  Defendants
Rizvi and  Strategy
Partners
violated
and,
unless  enjoined,
will
continue
to violate
Section
15(a)(1) of
the Exchange
Act
[15
U.S.C.
§
78o(a)  (1)].
REQUEST FOR
RELIEF
Plaintiff respectfully
requests
that this
Court:
I.
Permanently
enjoin each Defendant
from  violating
Section
17(a)
of the
Securities
Act
[15
U.S.C.
§
77e(a)J  and Section
10(b) of the Exchange
Act
[15
U.S.C.
§
78j(b)]  and Rule
lOb-S
[17 C.F.R.
§
240.lOb-5]
thereunder.
II.
Permanently
enjoin Defendants
Sellers
and Barrera  from  violating
Section
15(a) of the
Exchange
Act
[15
U.S.C.
§
78o(a)(1)}.
III.
Order each Defendant
and
Relief Defendant
to disgorge
an amount
equal
to the funds
and

.
.
benefits obtained
illegally, or
to which  that
Defendant  or
Relief
Defendant  otherwise has no
legitimate claim, as a
result of the violations
alleged, plus
prejudgment interest on that
amount.
Iv.
Order each
Defendant
to
pay a
civil penalty in an amount
determined
by
the Court
pursuant to Section  20(d)
of the  Securities Act [15 U.S.C.
§
77t(d)] and
Section  21(d)
of the
Exchange
Act [15 U.S.C.
§
78u(d)]
for the
violations
alleged herein.
V.
Order
such other
relief as this
Court may deem just and proper.
Respectfully
subnedTi
r
aAI
c
December 3,
2103
/s/Timothy
S.
MeCole
V'(
TIMOTHY S. McCOLE
/
Plaintiffs Lead
Attorney
Mississippi  Bar
No.
10628
United
States Securities and
Exchange  Commission
Burnett
Plaza,  Suite
1900
801 Cherry  Street, Unit
18
Fort
Worth,
Texas 76102
Telephone:  (817)  978-6453
FAX:  (817)
978-4927
E-mail:
[email protected]

S . 

IN THE UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF TEXAS 

AUSTIN DIVISION 

SECURITIES AND EXCHANGE COMMISSION, 

Plaintiff, 

vs. 

ROBERT A. HELMS, 
JANNIECE S. KAELIN, 
DEVEN SELLERS, 
ROLAND BARRERA, 
VENDETTA ROYALTY PARTNERS, LTD., 
VENDETTA ROYALTY MANAGEMENT, LLC, 
VESTA ROYALTY PARTNERS, LP, 
VESTA ROYALTY MANAGEMENT, LLC, 
IRON ROCK ROYALTY PARTNERS, LP, 
IRON ROCK ROYALTY MANAGEMENT, LLC, 
ARCADY RESOURCES, LLC, 
BAREFOOT MINERALS, G.P., 
G3 MINERALS, LLC, 
HALEY OIL COMPANY, INC., 
LAKE ROCK, LLC, 
SEBUD MINERALS, LLC, and 
TECHNICOLOR MINERALS, G.P., 

Defendants, 

and 

WILLIAM L. BARLOW, and 
GLOBAL CAPITAL VENTURES, LLC, 

Relief Defendants, solely for the purposes of 
equitable relief. 

COMPLAINT 

c 

Z13 DEC -3 H II: 38 
T. 

.:; L;L,. EAs 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

A13CV1 036 
§ Civil Action No.: 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 1 of 16 



. . 

For its Complaint, Plaintiff Securities and Exchange Commission ("Commission") 

alleges as follows: 

I. Summary 

Defendants Robert A. Helms and Janniece S. Kaelin are engaged in fraudulent 

securities offerings from an office in Austin, Texas. Since at least July 2011, they have offered 

investors securities issued by Defendant Vendetta Royalty Partners, Ltd. ("Vendetta Partners"), a 

limited partnership they control. Through December 31, 2012, they have raised at least $17.9 

million from at least 80 investors in at least 13 states, promising them that Vendetta Partners 

would use more than 99% of the investment proceeds to acquire a lucrative portfolio of oil-and- 

gas royalty interests. 

2. In reality, Helms and Kaelin misappropriated the vast majority of the Vendetta 

Partners offering proceeds, using the funds to cover personal expenses, payments to Relief 

Defendants William L. Barlow and Global Capital Ventures, LLC ("Global Capital"), payments 

to other entities they controlHaley Oil Company, Inc. ("Haley Oil"), Technicolor Minerals, 

G.P., ("Technicolor Minerals"), and Barefoot Minerals, G.P. ("Barefoot")and payments to 

investors of approximately $5.9 million in so-called "Partnership income." They derived the so- 

called Partnership income, however, primarily from offering proceeds. In other words, Helms 

and Kaelin operated a Ponzi scheme through Vendetta Partners. 

In the course of the scheme, Helms and Kaelin misrepresented and omitted to 

disclose material facts to investors. They grossly understated bank-loan payments made with 

offering proceeds. They concealed Vendetta Partners' imminent bank-loan default. And they 

represented that there were no material legal proceedings pending against them or Vendetta 

Partners when, in fact, they and Vendetta Partners were defendants in a civil case alleging they 

Page 2 of 16 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 2 of 16 



. . 

defrauded the plaintiff of $1 .2 million, and were subject to other legal proceedings. 

4. In addition, Helms and Kaelin paid combined commissions totaling $423,500 to 

Defendants David Sellers and Roland Barrera, who sold Vendetta Partnership securities to an 

investor for $3,050,000. Sellers and Barrera falsely represented to the investor that they would 

receive only "small" commissionsin keeping with Vendetta Partners offering documents 

stating that promotional expenses would not exceed $50,000when their actual commission was 

nearly 14% of the purchase price. 

After Vendetta Partners, Helms and Kaelin launched two more fraudulent 

offerings, Vesta Royalty Partners, LP ("Vesta Partners") in 2012 and Iron Rock Royalty Partners 

LP ("Iron Rock Partners") in 2013. For each of these limited partnerships, they control the 

general partner, Vesta Royalty Management, LLC ('Vesta Management") and Iron Rock 

Royalty Management, LLC ("Iron Rock Management"), respectively. In the Vesta Partners 

offering, they have touted potential investment returns ranging from 300% to 500% to be 

achieved in just five to seven years. In reality, their return projections are baseless. 

6. They are promoting the Iron Rock Partners offering through Iron Rock 

Management and other companies they control, specifically Defendants SeBud Minerals, LLC 

("SeBud Minerals"), Lake Rock, LLC ("Lake Rock"), G3 Minerals, LLC (G3 Minerals), and 

Arcady Resources, LLC ("Arcady Resources"). In the Iron Rock Partners offering, they describe 

their intent to raise $300 million by April 2014 and tout their "honesty and trustworthiness" and 

Vendetta Partners' "successful performance." In reality, Vendetta Partners is a Ponzi scheme, 

and they are dishonest and untrustworthy. 

By committing the acts alleged in this Complaint, the Defendants directly and 

indirectly engaged in, and unless restrained and enjoined by the Court will continue to engage in, 

Page 3 of 16 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 3 of 16 



. I 

acts, transactions, practices, and courses of business that violate the anti-fraud provisions of the 

federal securities laws, specifically Section 17(a) of the Securities Act of 1933 ("Securities Act") 

[15 U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") 

[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.lOb-5]. Defendants Sellers and 

Ban-era also violated Exchange Act Section 15(a) [15 U.S.C. § 78o(a)] by being unregistered 

brokers in the offerings described herein. 

8. The Commission brings this action seeking permanent injunctions, disgorgement 

plus prejudgment interest, and civil penalties, as to each Defendant and disgorgement as to each 

Relief Defendant and all other equitable and ancillary relief to which the Court determines the 

Commission is entitled. 

II. Jurisdiction and Venue 

9. The Court has jurisdiction over this action under Section 20(d) and 22(a) of the 

Securities Act [15 U.S.C. § 77t(d) and 77v(a)] and Sections 21(d), 21(e), and 27 of the 

Exchange Act [15 U.S.C. § 78u(d), 78u(e) and 78(aa)]. Venue is proper because the 

Defendants and Relief Defendants reside in, and a substantial part of the events and omissions 

giving rise to the claims occurred in, the Western District of Texas. 

III. The Parties 

10. Plaintiff Commission is an agency of the United States government. 

11. Defendant Robert A. Helms is a natural person residing in Austin, Texas. 

12. Defendant Janniece S. Kaelin is a natural person residing in Austin, Texas. 

13. Defendant Deven Sellers is a natural person residing in Arvada, Colorado. 

14. Roland Ban-era is a natural person residing in Costa Mesa, California. 

15. Defendant Vendetta Partners is a Texas limited partnership in Austin, Texas. 

Page 4 of 16 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 4 of 16 



. . 

16. Defendant Vendetta Management is a Texas limited liability company in Austin, 

Texas. 

17. Defendant Vesta Partners is a Texas limited partnership in Austin, Texas. 

18. Defendant Vesta Management is a Texas limited liability company in Austin, 

Texas. 

19. Defendant Iron Rock Partners is a Delaware limited partnership principally 

operating in Austin, Texas. 

20. Defendant Iron Rock Management is a Delaware limited liability company 

principally operating in Austin, Texas. 

21. Defendant Arcady Resources is a Texas limited liability company in Austin, 

Texas. 

22. Defendant Barefoot Minerals is a Texas general partnership in Austin, Texas. 

23. Defendant G3 Minerals is a Texas limited liability company in Austin, Texas. 

24. Defendant Haley Oil is an Illinois corporation principally operating in Austin, 

Texas. 

25. Defendant Lake Rock is a Texas limited liability company in Austin, Texas. 

26. Defendant SeBud Minerals is a Texas limited liability company in Austin, Texas. 

27. Defendant Technicolor Minerals is a Texas general partnership in Austin, Texas. 

28. Relief Defendant William Barlow is a natural person residing in Austin, Texas. 

29. Relief Defendant Global Capital is a Texas limited liability company in Austin, 

Texas. 

V. Facts 

A. Background 

Page 5 of 16 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 5 of 16 



. . 

30. Helms and Kaelin, through entities they control, have offered and sold and 

continue to offer and sell securities in the form of limited-partnership interests issued by 

Defendants Vendetta Partners, Vesta Partners, and Iron Rock Partners. Helms and Kaelin 

control each entity through its general partnerDefendants Vendetta Management, Vesta 

Management, and Iron Rock Management, respectively. 

31. Helms and Kaelin operate each limited partnership from an office at 8101 

Cameron Rd. Suite 109, in Austin, Texas. They utilize a sales team, including Sellers and 

Barrera, to offer the securities for sale to investors by telephone, by email, and by in-person 

presentations. Helms and Kaelin also directly offer and sell the securities to investors in person 

at the Austin office and through emails and phone calls. 

B. The Vendetta Partners Offering 

32. Helms and Kaelin formed Vendetta Partners in 2009. At or about that time, 

Vendetta Partners acquired certain oil-and-gas royalty interests, along with limited partners, from 

another limited partnership associated with Helms and Kaelin. From January 1, 2011, through 

December 31, 2012, Vendetta Partners' royalty interests generated income totaling 

approximately $1.4 million. 

33. On August 15, 2011, Vendetta Partners filed with the Commission a securities- 

offering notice on Form D, signed by Helms, stating that Vendetta Partners sought to raise $50 

million by selling limited-partnership interests. The Form D falsely stated that Vendetta Partners 

had not yet sold any securities in the offering. In reality, Vendetta Partners sold securities to two 

investors on July 29 and 30, 2011, in exchange for $275,000 combined. Moreover, the Form D 

listed Vendetta Management, Helms, and Kaelin as the offering's only "promoters" and falsely 

stated that no promoter had received, or would receive, any offering proceeds. In fact, at the 

Page 6 ofl6 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 6 of 16 



S . 

time of filing Helms and Kaelin had already misappropriated nearly half of the $275,000 

received on July29 and 30, 2011. Upon receipt, they transferred $135,000 of these funds to 

Vendetta Management and, from there, withdrew $19,450 in cash and transferred an additional 

$18,000 to Helms. 

34. In the Vendetta Partners offering, Helms and Kaelin distributed to prospective 

investors a private-placement memorandum ("PPM"), which purported to explain the Vendetta 

Partners investment. The PPM represented that Vendetta Partners had two "principal 

objectives": (1) to purchase oil-and-gas "Royalty Interests" and (2) "to generate Partnership 

income from such Royalty Interests." It also represented that the "Partnership will distribute 

Partnership income quarterly." 

35. The PPM contained several false and misleading statements. It touted Helms' oil- 

and-gas experience, representing that he had "worked with various mineral companies over the 

last 10 years advising management on issues involving the acquisition and management of 

royalty interests, mineral properties and related legal and financial issues." This statement was 

misleading because it did not disclose that Helms the oil-and-gas experience came almost 

entirely from operating Vendetta Partners and its affiliated or predecessor companies. 

36. Under the heading, "Accounting," the PPM also falsely stated that Vendetta 

Management would furnish investors periodic reports on Vendetta Partners' property 

acquisitions and operational results. In fact, it never furnished investors such reports. 

37. Finally, under the heading "Litigation," the PPM falsely stated: "There are no 

material pending legal proceedings against the Partnership, the General Partner or its Affiliates." 

In reality, Vendetta Partners, Vendetta Management, Technicolor Minerals, Helms, Kaelin, and 

other entities affiliated with them were engaged in material litigation during the Vendetta 

Page 7 of 16 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 7 of 16 



. S 

Partners offering. A private party sued them in December 2011, alleging that they committed 

fraud by purporting to sell mineral interests that they did not even own in exchange for S 1.2 

million. The Illinois EPA initiated action against Haley Oil in May 2012, alleging illegal 

"release incidents." And the IRS initiated action against Kaelin in October 2012, relating to a tax 

liability. 

38. The PPM further represented that Vendetta Partners would use the anticipated $50 

million offering proceeds solely for three purposes: (i) to purchase royalty interests; (ii) to pay 

10% of Vendetta Partners' $3,795,000 credit facility; and (iii) to pay promotional expenses. The 

PPM contained a summary of the "estimated application and use of the proceeds," which stated 

that Vendetta Partners would apply and use the $50 million as follows: 

Purchase Costs of Royalty Interests 

Loan Repayment 

Promotional Expenses 

Application Percent 
of of Subscriptions 

Maximum Proceeds 

$49,570,500 99.14% 

$ 379,500 .76% 

$ 50,000 .10% 

39. From July 29, 2011, through December 31, 2012, Helms and Kaelin raised at least 

$17.9 million through the Vendetta Partners offering from at least 80 investors in at least 13 

states. Apart from the offering proceeds and the $1.4 million in cash generated from legitimate 

royalty interests, which combined totaled approximately $19.3 million, Vendetta had no 

significant cash assets. Rather than honor the PPM representations regarding the use of 

proceeds, Helms and Kaelin, through a number of entities under their control, misappropriated 

the vast majority of the funds. 

Page 8 of 16 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 8 of 16 



. . 

40. Helms and Kaelin controlled and oversaw the use of all funds that came into 

Vendetta Partners. They shared signatory authority on its bank accounts and on the bank 

accounts of Vendetta Management. From January 1, 2011, through December 31, 2012, 

Vendetta Partners, at the direction of Helms and Kaelin, transferred approximately $4.4 million 

to Vendetta Management. Because this was far in excess of the $1.4 million generated from 

legitimate royalty interest income, at least $3 million was misappropnated investor funds. Out of 

the $4.4 million transferred to Vendetta Management, they transferred approximately $1.4 

million to Helms and an additional $102,000 to Barefoot Minerals. 

41. In addition to the $4.4 million transferred to Vendetta Management, Helms and 

Kaelin transferred approximately $702,000 directly to Helms' bank account. They transferred an 

additional $193,000 to Technicolor Minerals. They paid approximately $1.6 million to cover 

promotional expenses, approximately 32 times the amount promised in the PPM. They used 

approximately $1.1 million for loan repayment, approximately four times the amount promised 

in the PPM. And they spent approximately $1.6 million to purchase royalty interests, more than 

90% less than promised in the PPM. 

42. Vendetta Partners, at the direction of Helms and Kaelin, also used approximately 

$5.9 million to make so-called partnership-income distributions to investors. They used money 

from later investors to pay these distributions to earlier investors. In this fashion, Helms and 

Kaelin created the illusion that Vendetta Partners was a profitable enterprise when, in fact, it was 

a fraudulent Ponzi scheme. 

43. Vendetta Partners, at the direction of Helms and Kaelin, transferred 

approximately $86,737 combined to Relief Defendant Barlow and his company, Relief 

Defendant Global Venture. Neither Barlow nor Global Venture had any legitimate claim to the 

Page 9 ofl6 

   Case 1:13-cv-01036-LY Document 1 Filed 12/03/13 Page 9 of 16 



. . 

proceeds. Barlow and Global Venture acquired at least some of these proceeds in round-trip 

transactions with companies that Helms and Kaelin controlled. Helms orchestrated these 

transactions was to create fictitious income to support the fraudulent partnership-income 

distributions. 

44. For example, on November 17, 2011, Helms and Kaelin transferred $2,208,800 

from Vendetta Partners to Barlow. The next day, Barlow transferred $2,200,300 to Defendant 

Haley Oil, a company that Helms controlled, retaining $8,500. On December 5, 2011, Helms 

transferred $1.4 million from Haley Oil to Vendetta Partners and falsely recorded it as royalty 

income in Vendetta Partners' accounting system. On February 1, 2012, Helms transferred 

$550,000 from Haley Oil to Vendetta Partners and falsely recorded it as "lease bonus" income on 

Vendetta Partners' accounting system. Helms and Kaelin distributed the nearly $2 million from 

the roundtnp transactions to Vendetta Partners investors, falsely characterizing these payments 

as partnership-income distributions. Haley Oil retained investor funds totaling $245,300 that it 

received in the roundtnp transactions. 

45. On several occasions, Helms and Kaelin provided investors tours of their Austin 

office to promote their securities offerings. On at least one such tour in August 2012, they 

falsely represented to two investors that Vendetta Partners paid its operating expenses, including 

Helms and Kaelin's salaries, from the ongoing revenue stream generated by Vendetta Partners' 

royalty interest portfolio. They falsely represented that the investors would earn a return of 

150% to 200% on the investment within several months. And they represented that they would 

use the proceeds from the investors' limited-partnership purchase$3,050,000--to buy out 

another investor's limited-partnership interest. In reality, Helms and Kaelin misappropnated part 

of the investors' money, using it to cover undisclosed expenses and to pay commissions to 

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Sellers and Barrera, rather than buying out another investor. 

46. During office tours, Helms and Kaelin introduced potential investors to Vendetta 

Management's financial analyst, who was a student at the University of Texas and who had not 

yet attained a degree. Helms and Kaelin falsely stated to potential investors that the financial 

analyst had a degree from the University of Texas. Helms and Kaelin prohibited the financial 

analyst, under threat of demotion, from telling investors that he did not actually have a degree. 

47. Vendetta Partners, at the direction of Helms and Kaelin, paid Defendants Sellers 

and Barrera approximately $400,000 in commissions, which they split almost evenly, for the 

$3,050,000 investment described in paragraph 45, above. When offering the investment, 

Sellers and Barrera represented to the investors that they would split a "small" commission. In 

reality, their combined commission was more than 13% of the investment and more than eight 

times the PPM's $50,000 limit for promotional expenses. Because they did not disclose the 

actual size of their commission, their statement that it would be "small" was misleading. Sellers 

and Barrera never corrected this misstatement, even as they continued to promote other 

offeringsincluding Vesta Partners and Iron Rock partnersto the same investors. 

C. The Vesta Partners Offering 

48. Since at least, July 2012, Helms, Kaelin, Sellers, and Barrera have offered to sell 

investors securities issued by Defendant Vesta Partners. At Helms and Kaelin's direction 

through Vesta Management, Defendants Sellers and Barrera emailed two prospective investors a 

Vesta Partners presentation, describing the company and its offering. According to the 

presentation, Vesta Partners would provide investors "predictable quarterly cash distributions 

with attractive yields (targeted 15% 20% gross annual yields)" and a 300% to 500% return 

within five to seven years. It described Vesta Partners managementincluding Helms and 

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Kaelinas having a "Proven track record of consistent investor cash-flows and overall market 

performance." And it said that Helms and Kaelin had experience "managing and successfully 

exiting royalty. . . interest investments, including . . . Vendetta Royalty Partners, Ltd." 

49. These statements in the Vesta Partners presentation were false. Helms and Kaelin 

had no reasonable basis to expect that Vesta Partners would provide attractive cash-distribution 

yields or a 300% to 500% return within seven years. Indeed, their track record included the 

Vendetta Partners Ponzi schemepromoted as a business model virtually identical to that of 

Vesta Partnersin which they had never earned a legitimate profit for investors. And Vendetta 

Partners was not a successful investment by any reasonable standard. 

ft The Iron Rock Partners Offering 

50. On April 25, 2013, Iron Rock Partners filed with the Commission a Form D, 

signed by Helms as manager for Iron Rock Partners' general partner, Iron Rock Management. 

The Form D indicates that Iron Rock Partners seeks to raise $300 million over a period not to 

exceed one year. In addition to Helms, it lists the following affiliate entities as the offering 

promoters: Defendants Iron Rock Management, SeBud Minerals, Lake Rock, G3 Minerals, and 

Arcady Resources. It further says that the offering will only be solicited in Florida, New York, 

North Carolina, and Pennsylvania. 

51. The Iron Rock Form D is false and misleading. Kaelin and Sellers have actively 

promoted the Iron Rock Partners offering, but they are not disclosed as promoters on the Form 

D. And Iron Rock Partners, through Helms, Kaelin, Sellers, and other affiliated promoters is 

offering the securities in states beyond the four states listedincluding in California. 

52. On March 1, 2013, Sellers emailed an investor located in California, attaching a 

"Proposal" in which Sellers offered for sale Iron Rock Partners securities. The Proposal falsely 

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stated that investors could expect a 300% to 500% return in five to seven years. As is evident in 

Helms and Kaelin's disastrous Vendetta Partners oil-and-gas project, these earnings projections 

were baseless. It further said the Iron Rock Partners management teamincluding Helms and 

Kaelinhas an "industry reputation of honesty and trustworthiness." In fact, Helms and Kaelin 

were dishonest and untrustworthy, a fact their industry reputation reflected. Indeed others in the 

industry sued them for fraud and conspiracy. 

FIRST CLAIM 
Violations of Section 10(b) of the Exchange Act 115 U.S.C. § 78j(b)j 

and Rule lOb-5thereunder [17 C.F.R. § 240.lOb-5] 

53. Plaintiff Commission realleges and incorporates by reference paragraphs 1 

through 54 of this Complaint as if set forth verbatim. 

54. Each Defendant, by engaging in the conduct described above, directly or 

indirectly, singly or in concert with others, in connection with the purchase or sale of a security, 

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

facilities of a national securities exchange, knowingly or severely recklessly: 

a. employed a device, scheme, or artifice to defraud; 

b. made an untrue statement 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 

engaged in an act, practice, or course of business which operated or would 

operate as a fraud or deceit upon a person. 

55. By engaging in the conduct described above, each Defendant 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 lOb-Sthereunder [17 C.F.R. § 240.lOb-5]. 

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SECOND CLAIM 
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)J 

56. Plaintiff Commission realleges and incorporates by reference paragraphs 1 

through 54 of this Complaint as if set forth verbatim. 

57. Each Defendant, by engaging in the conduct above, singly or in concert with 

others, 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. knowingly or severely recklessly employed a device, scheme, or artifice to 

defraud, or 

b. (b) knowingly, recklessly, or negligently obtained money or property by 

means of an untrue statement of a material fact or an omission 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. (c) knowingly, recklessly, or negligently engaged in a transaction, practice, or 

course of business which operated or would operate as a fraud or deceit upon 

the purchaser. 

58. By reason of the foregoing, each Defendant violated, and unless enjoined, will 

continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)J. 

THIRD CLAIM 
Violations of Section 15(a) of the Exchange Act 115 U.S.C. § 78o(a)] 

59. Plaintiff Commission realleges and incorporates by reference paragraphs I 

through 54 of this Complaint as if set forth verbatim. 

60. Defendants Sellers and Barrera, by engaging in the conduct described above, 

directly or indirectly made use of the mails or means or instrumentalities of interstate commerce 

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to effect transactions in, or to induce or attempt to induce, the purchase or sale of securities, 

without being registered as a broker or dealer, or being associated with a registered broker or 

dealer in accordance with Section 15(a) (1) of the Exchange Act [15 U.S.C. § 78o(a) (1)]. 

61. Accordingly, Defendants Sellers and Barrera were brokers within the definition of 

that term in Section 3(a)(4) of the Exchange Act which defines "broker" as any person "engaged 

in the business of effecting transactions in securities for the account of others." Defendants 

Sellers and Barrera were never so registered and, acted as brokers which included: (1) 

solicitation of investors to purchase securities; (2) involvement in negotiations between the issuer 

and the investor; and (3) receipt of transaction-related compensation. 

62. By reason of the foregoing, Defendants Rizvi and Strategy Partners violated and, 

unless enjoined, will continue to violate Section 15(a)(1) of the Exchange Act [15 U.S.C. § 

78o(a) (1)]. 

REQUEST FOR RELIEF 

Plaintiff respectfully requests that this Court: 

I. 

Permanently enjoin each Defendant from violating Section 17(a) of the Securities Act [15 

U.S.C. § 77e(a)J and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule lOb-S 

[17 C.F.R. § 240.lOb-5] thereunder. 

II. 

Permanently enjoin Defendants Sellers and Barrera from violating Section 15(a) of the 

Exchange Act [15 U.S.C. § 78o(a)(1)}. 

III. 

Order each Defendant and Relief Defendant to disgorge an amount equal to the funds and 

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benefits obtained illegally, or to which that Defendant or Relief Defendant otherwise has no 

legitimate claim, as a result of the violations alleged, plus prejudgment interest on that amount. 

Iv. 

Order each Defendant to pay a civil penalty in an amount determined by the Court 

pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d) of the 

Exchange Act [15 U.S.C. § 78u(d)] for the violations alleged herein. 

V. 

Order such other relief as this Court may deem just and proper. 

Respectfully subnedTi r aAI c 
December 3, 2103 /s/Timothy S. MeCole V'( 

TIMOTHY S. McCOLE / Plaintiffs Lead Attorney 
Mississippi Bar No. 10628 
United States Securities and Exchange Commission 
Burnett Plaza, Suite 1900 
801 Cherry Street, Unit 18 

Fort Worth, Texas 76102 
Telephone: (817) 978-6453 
FAX: (817) 978-4927 
E-mail: [email protected] 

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