Monday, October 12, 2009

Kelly G Rogers sued by the SEC in 2007

On July 18th, 2007, the Securities and Exchange Commission filed the lawsuit; Securities and Exchange Commission vs. Global Finance & Investments, Inc Case No; 4:07cv346. This lawsuit specifically named Kelly G Rogers as a Plaintiff.

The United States Securities and Exchange Commission (“Commission”) files this Complaint against Defendants Global Finance & Investments, Inc.; Charles R. Davis, William F. Dippolito; Lucre Fund, LLC, JTA Enterprises, Inc.; William H. Clark; Level Par Investments, LLC; Kelly G. Rogers; Sterling Meridian, LLC; Ronald J. Linn; and Glenn Maske.

Kelly G Rogers involvement had been discovered by the SEC while they conducted an investigating into the "Travis Correll" Ponzi Scheme. The SEC shut down this operation in December of 2005. During the SEC research,  they came across a deposit into CR Davis's account in the name of Level Par. This caused the SEC to reach out and investigate Level Par. This contact by the SEC resulted in the following letter being sent out to all 35 Level Par Investors in August of 2006. Seems that Kelly Rogers was an active participated in the Travis Correll Ponzi scheme. In Rio Grande Mining vs. Kelly Rogers and Carrie Rogers, Plaintiffs claim that Rogers embezzled company funds and invested in the Correll scheme, having the profits paid to his personal account.

According to the complaint; Rogers’s fraudulent offering;

In January 2006, Clark told Kelly G Rogers that Clark had invested with Global Finance and was receiving profits from Global Finance’s program. In fact, drawing from the representation in Davis’s December 20, 2005 joint venture amendment, Clark represented to Rogers that he had $100 Million invested in the Global Finance investment program.

In February 2006, after Kelly G Rogers expressed an interest in participating in Global Finance’s program, Clark introduced Rogers to Davis. According to Rogers, Davis offered him a “totally secure” high-yield program involving the purchase and sale of bank debentures that paid monthly returns of up to 25 percent. Davis touted the fact that the funds would be safely deposited in an attorney’s trust account and would not be withdrawn until an actual transaction commenced or instrument was purchased.

In February 2006, Rogers was the managing member of Level Par and its sole contact with Global Finance. Rogers, using Level Par as a pooling vehicle, conducted an offering, and invested the proceeds with Global Finance. Based on Davis’s representations, Rogers prepared Level Par’s offering documents, promising investors monthly returns ranging from 3 to 10 percent. Rogers orally represented to Level Par investors that their principle was not at risk because it remained in an attorney’s trust account. In many cases, Lawyer Kelly G Rogers personally guaranteed funds invested by those in his Networking business, many who were sucked into his deals based on the relationship developed via the “Business”. Rogers also told investors that the funds would be used as collateral to trade in various bank debentures or mortgage backed securities. Rogers told one investor that “the World Bank would have to collapse to lose his investment”. Rogers raised $4.7 Million from approximately 35 investors and wire transferred all of it to Global Finance in February or March of 2006.

Rogers knew that Davis’s claims were fraudulent. First, Rogers was an investor in Correll’sheme, a similar high-yield investment program, which had ceased making promised payments. Also, Rogers was on notice that these investments were scams when he learned of the Commission’s allegations in the Correll civil action in which Robbie Gowdey, Kelly G Rogers’s friend and neighbor, was charged with violation of the federal securities law. To illustrate the friendship, Rogers had been assigned as the trustee to Robbie Gowdey’s family Trust account. Robbie Gowdey passed away on January 8, 2009.

On July 13, 2006, Global Finance notified Level Par that it had terminated their agreement and identified $775,000 in previous payments. When Level Par’s other members received Global Finance’s notification, they realized that Rogers had misappropriated $200,000 belonging to their investors and removed Rogers from Level Par.

Claims Against : Kelly Gordon Rogers

1. Violations of Sections 10(b) of the Exchange Act and Rule 10b-5.

2. Violations of Sections 17(a) of the Securities Act.

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

4. Permanently enjoins Kelly Rogers from future violations of 5(a), 5(c) and 17(a) of the securities act.


On April 9, 2007 agrees to a “Consent of Defendant Kelly G. Rogers”.

1. Defendant Kelly G. Rogers waives services of Summons and the Complaint in this action, enters a general appearance, and admits the Court’s jurisdiction over Defendant and over the subject matter of this action.

2. Without admitting or denying the allegations of the complaint(except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the Agreed Final Judgment as to Kelly G. Rogers in the form attached hereto and incorporated by reference herein, which, among other things;

• Permanently restrains and enjoins Defendant from violations of Section 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated there under;

• Orders Defendant to pay disgorgement in the amount of $100,000, plus prejudgment interest thereon in the amount of $3,360; and

• Orders Defendant to pay a civil penalty in the amount of $50,000 under Sections 20(d) of the Securities Act and Sections 21(d) of the Exchange Act.

You can download the “CONSENT OF DEFENDANT KELLY G. ROGERS” by clicking on the link. The question now becomes; did Rogers knowingly violate the terms and conditions set forth by the SEC on April 9th, 2007 when he sold the deal called Falcon Energy, LLC- -Buck Hamilton Series" or any other of these schemes that took place at or around April of 2007?

These and many more questions will be answered in the weeks and months ahead as the lawsuits begin to play out in courts. As of today, Level Par investors are still waiting for the return of their funds. In 2007, the SEC turned over $7.2 Million recovered from the Global Finance scheme and assigned Hays Financial Consulting to handle the trust. Keep in mind; while these investments were made in 2006, the final distribution has still not been made in October of 2009. Many families have been financially devastated by the schemes that were solicited for by Kelly Rogers.

Stay tuned.

Friday, October 9, 2009

Rio Grande Investors Sue Kelly G Rogers & Carrie Sewell Rogers; Claims Fraud and Embezzlement

The Rio Grande Coal Mine group has issued a complaint; To Determine Discharge ability of Debt owed to the investor group. Seven investors filed the complaint to the United States Bankruptcy Court of Eastern Texas on October 1, 2009 against bankrurptcy case No 09-42154. The group is asking the Trustees not to dismiss the debt owed to these investors as a result of an investment solicited by Lawyer Kelly G Rogers. Interestingly, Carrie Sewell Rogers is also named in the complaint. To download complain, click on the link; Rio Grande Coal Mine, LLC dba-Mexicaol.

In the statement of facts, we quote the following information directly from the lawsuit; Kelly G Rogers solicited the Plaintiff's to make an investment in Rio Grande. The solicitation occurred using wire communications in interstate commerce. Kelly G Rogers is not licensed under state or federal law to solicit investments and securities. This is a very interesting statement considering that Lawyer Kelly Gordon Rogers has been sued by the SEC and permanently restrained and enjoins Rogers from a violating variety sections in the Security act of 1933. So it makes one wonder if Lawyer Kelly G Rogers has violated the consent of this final agreement? Read the SEC Consent of Defendant Kelly G Rogers for yourself.

To continue; the solicitation made by Kelly G Rogers is a security as defined under federal law. Kelly G Rogers misrepresented the investment in Rio Grande to the plaintiffs. After receiving the investments funds from the Plaintiffs, Kelly G Rogers misappropriated and otherwise embezzled the investments made in Rio Grande by the Plaintiffs. It goes on; Kelly G Rogers used the Plaintiffs investment funds from Rio Grande bank account to participate personally in a Ponzi scheme associated with TNT Office Supply and Travis Correll. Kelly G Rogers misappropriated and embezzled Rio Grand funds from the Rio Grande bank account in order to personally participate in the Travis Correll Ponzi scheme. The Travis Correll Ponzi scheme paid money back to Kelly G Rogers and Carrie Rogers. Carrie (Sewell) Rogers participated in spending the payments received from the Ponzi scheme and making deposits of the payments from the Ponzi scheme. The payments from the Ponzi scheme were deposited into a joint bank account in the name of Kelly G Rogers and Carrie (Sewell) Rogers. Kelly G Rogers and Carrie Sewell Rogers jointly received substantial sums of money in the payback scheme from the Travis Correll Ponzi scheme. Kelly G Rogers and Carrie Sewell Rogers did not pay the money back to Rio Grande or to Rio Grande's investors, the Plaintiffs.

The Securities and Exchange Commission conducted an investigation of the Travis Correll Ponzi scheme and uncovered wire transfers authorized by Kelly G Rogers transferring money from the Rio Grande bank account in Collin County, Texas to a bank account in the name TNT office-supply. These wire transfers by Kelly G Rogers were not authorized by Plaintiffs and were not a lawful use of the funds and money belonging to Rio Grande. Kelly G Rogers never disclosed to the Plaintiffs that he was using their investment money to participate personally in a Ponzi scheme, and Plaintiffs never authorized Kelly G Rogers to use their money and their investment in Rio Grande to personally participate in the Travis Correll Ponzi scheme.

Kelly G Rogers owed Plaintiffs a fiduciary duty. Kelly G Rogers breached his fiduciary duty. Kelly G Rogers embezzled, converted and misappropriated money and funds invested by Plaintiffs in Rio Grande for his personal benefit and for the benefit of Carrie Sewell Rogers. Carrie Sewell Rogers knowingly spent money from the joint bank account controlled by her and her husband, Kelly G Rogers, which was money deposited from the Travis Correll Ponzi payments. Carrie Sewell Rogers endorsed checks from the Travis Correll Ponzi payments and deposited those checks in a bank account in Collin County, Texas that she had joint control over with her husband, Kelly G Rogers. Kelly G Rogers and Carrie Sewell Rogers engaged in a joint enterprise and civil conspiracy to defraud Plaintiffs of their investment in Rio Grande by taking money from Rio Grande, participating in the Travis Correll Ponzi scheme, and then depositing Ponzi payments from the Travis Correll Ponzi scheme in their joint bank account which both Kelly G Rogers and Carrie Sewell Rogers had access to.

Additionally, Kelly G Rogers and Carrie Sewell Rogers sold equipment belonging to Rio Grande. Kelly G Rogers and Carrie Sewell Rogers retained the proceeds from the sale for their personal benefit and have failed and refused and continue to fail and refuse to pay the proceeds from the sale of that equipment to Plaintiffs. Kelly Gordon Rogers and Carrie Sewell Rogers used the proceeds from the sale of the equipment for their personal benefit. The equipment was owned by Rio Grande and was purchased with investment funds from the Plaintiffs.

The lawsuit summarizes the following counts; ONE-FRAUD: Kelly G Rogers and Carrie S Rogers made the misrepresentations of fact noted above with knowledge of their falsity, with the intent of defraud Plaintiffs, who justifiable relied upon those misrepresentations and were damaged by Rogers’s fraud. TWO-FRAUD WHILE ACTING IN A FIDUCIARY CAPACITY: Kelly Rogers was in a fiduciary relationship with Plaintiffs. Kelly Rogers committed the fraud noted above and made the material misrepresentations of fact with knowledge of their falsity and with the intent to defraud Plaintiffs who justifiably relied upon those misrepresentations and were damaged. THREE-EMBEZZLEMENT: Kelly G Rogers and Carrie Rogers embezzled money from Plaintiffs. FOUR-NONDEBTOR SPOUCE: Carrie Rogers as a non-debtor spouse is a party so that the Court may determine the dischargebility of the debt pursuant to 11USCA 524(b)(2). FIVE-DAMAGES: The damages suffered by Plaintiffs are in excess of the minimum jurisdictional limits of the court. Debtor is also liable for punitive damages in an amount to be determined by the court.

The group is simply asking the court to disallow the automatic stay against the lawsuit that would essentially release Kelly Gordon Rogers and Carrie Sewell Rogers from any responsibility for their actions. More to come as information becomes public.

Thursday, October 8, 2009

DK Lawsuit Creditors file complaint against Kelly Gordon Rogers; Claims Fraud

Another group of investors filed a complaint to the United States Bankruptcy Court for the Eastern District of Texas-Sherman Division. Under Case No 09-42154-BTR-11, 5 entities have appealed to the court to not allow the release of this debt assigned to Lawyer Kelly G Rogers;

DK JV 1 and DK JV 2 for                286,839
Vandalai LLP and Parlai LLLP for     330,811
RTB Holdings, LTD for the amount     94,973

  Total amount identified                     $ 712,623

Following a three week arbitration hearing in May and June of 2008, the arbitration panel issued its award in the Arbitration proceeding dated April 1, 2009. The Award issued damages to these investors as a result of investing in this oil and gas entity. This group was created by several individuals, including Lawyer Kelly G Rogers. The entity was officially issued by the Recorder of Collin County on March 1st, 2005. The paperwork was submitted by Lawyer Kelly G Rogers and is posted below.

The complaint, objecting to the discharge of awards issued against Lawyer Kelly G Rogers, included all but one investment group. That group is KCR Investments, Inc which is short for "Kelly and Carrie Rogers Investments, Inc. This group represented money invested by Carrie Rogers Father, Frederic D. Sewell. Mr. Sewell is one of the founders of Netherland, Sewell & Associates, Inc. According to the site; NSAI was built on the vision and integrity of Clarence Netherland and Fred Sewell. Over 45 years later, our commitment remains the same.

Many of those who invested in these oil and gas offerings will tell you that Rogers often dropped his father-in-laws name as an investor. This was used in the context that he was giving it his stamp of approval, even though it was emphasized that we were not suppose to know this information.

Turning to the documnet, here are the counts; One-Rogers obtained money and/or property from Plaintiffs by false pretenses, by false misrepresentations, and/or by actual fraud. Two-that the debts owed by Rogers are for fraud and/or defalcation while acting in a fiduciary capacity. Finally-the arbitration panel, in the Award, specifically found Rogers liable to Plaintiffs for, inter alia, fraud and breach of fiduciary duty.

If you're keeping score at home, two groups have now asked the court to suspend the release of funds owed to them by Lawyer Kelly G Rogers. One group (Falcon Energy, LLC-Buck Hamilton Series) invested $1,400,000 and is asking the judge to preserve the $180,000 that was embezzled by Lawyer Kelly G Rogers and be assigned as a lien against the Rogers home. You may know that in Texas, your home is protected under the Homested Act. As a result, Lawyer Kelly G Rogers tried to cram as much money into this home in order to preserve his wealth from investors who have sued him. However, the first group is asking the judge to include thier $180,000 that they claim Rogers embezzled, to be applied against the home.

The second group (dicussed here on this page) have asked the judge to disallow the release of $712,623 in debt as part of a $14,341,333 total award issued as a result of the Lionheart oil and gas debacle. To our knowledge, no ruling has been issued to date.

We'll keep an eye on these issues.

Thomson Lawsuit Creditors sue Kelly Gordon Rogers: Claims Fraud and Embezzlement

Kelly Gordon Rogers is named as the defendant in another lawsuit filed on October 2nd, 2009. Bill Thompson, CR591, LLC et al v. Kelly Gordon Rogers, alleges Fraud and Embezzlement against Rogers and was filed in the United States Bankruptcy Court for the Eastern District of Texas, Plano Division. The purpose of this suit is to arrest control of these assets from Debtor and place in the hands of Plaintiffs, who provided all of the funding for the purchase of these assets.

This lawsuit involves 20 of the 22 known members of the Company consisting of approximately 95% of the preferred member’s interest. In 2007, Rogers was searching for investors for this scheme. The stated purpose of this company was to purchase mineral interests and develop oil and gas wells. At the time Rogers solicited the investors, the company owned one producing oil well, and Rogers sought sufficient funds to enable the company to "Turn Key" two gas wells and to begin drilling a third gas well, according to the lawsuit. Based a powerpoint developed by Rogers and other information, the members invested $1,400,000 with self proclaimed Laywer Kelly Gordon Rogers.

The suit claims that Lawyer Kelly G Rogers embezzled company assets while acting as managing members. According to the suit, Rogers declared the first gas well a mechanical failure and had it plugged. The second gas well also purportedly suffered from mechanical failures and was terminated. It is unknown at this time if any work at all was done on these wells or what the funds for these wells were used for. In October, 2008, work on a purported third gas well was stopped and the gas well operators transferred to Rogers the sum of $180,000. These funds were previously paid by the company to the operators to develop a third gas well and the operators' payment to Rogers was a return of the unused portion of the prepaid drilling costs for the third gas well.

It goes on; although it is undisputed that the $180,000 received from the operator was the property of the company, Rogers testified that he "borrowed" the $180,000 for his personal use. According to Rogers, the $180,000 was used for home improvement. To date, Rogers has provided no promissory note or other evidence that he "borrowed" the money. Further, Rogers has so far repaid none of the money.

According to records from the Nevada Secretary of State, Lawyer Kelly G Rogers created an entity named Falcon Energy, LLC on March 29th, 2007. The status of this corporation was "Revoked" as of April 1, 2009. This is not unusual for Lawyer Kelly Gordon Rogers. Rogers has demonstrated a clear pattern of poor standing within organizations since 2002. A check of his law license shows he was suspended (Since this story broke, Kelly G Rogers has updated his law liscence. However, the Texas State Bar is looking into the case) by the Supreme Court of Texas in both 2002 and 2008. And now this entity is officially "Revoked" by the State of Nevada because the Rogers apparently didn't pay the $125.00 fee due to the state.

In terms of this investment, Rogers solicited money to fund a supposed entity called "Falcon Energy, LLC-Buck Hamilton Series" but there is no evidence that the entity was ever created. According to the case; it is presently unclear as to the status or nature of the company. Although Rogers solicited investments in a limited liability company, and Rogers had each of the investors execute both a subscription agreement and an LLC agreement, it is unclear if Rogers actually formed the entity. A review of the Nevada Secretary of State records indicates there is no entity named "Falcon Energy, LLC-Buck Hamilton Series". A review of the Texas Secretary of State records likewise establishes there is no entity with that name. As such, it is unclear as to the exact nature of the relationship between the platiffs and Rogers. Rogers raised $1,400,000 from Plaintiffs, ostensibly for the purchase of membership interests in the company.

Amazingly, when testifying in response to a 2004 examination request made by this group to the Trustee presiding over Rogers’s bankruptcy, Rogers testified; he did, in fact, "Form a Company" but could not remember where? Rogers further testified that documents reflecting the formation of the company could be found in his prior office space, which has been taken by the landlord. Rogers have since participated in an examination of the records located in Rogers’s prior office space and have yet to locate any records of the company. It maybe that the members of the company are simply members of an unincorporated joint stock association, a general partnership, or a trust. In any event, the company has significant assets which are under the direct control of Rogers. The purpose of this suit is to arrest control of these assets from Rogers and place it in the hands of the Plantiff, who provided all of the funding for the purchase of these assets.

To see an actual "Motion for Rule 2004 examination of Kelly Gordon Rogers, click on case number
09-42154-11. This trust invested $420,000 in the "Buck Hamilton Project". Based on the quote listed in the preceeding paragraph, the 2004 Examination request must have been granted since Rogers testified that he did form a company but couldn't remember where. To quote the motion; It is well settled that the scope of examination allowed under Rule 2004 is broader than discovery allowed under Federal Rules of Civil Procedure and may be in teh nature of a "Fishing Expedition". It is well established that the scope of a Rule 2004 examination is extreamely broad and...allowed for the 'purpose of discoverign assets and unearthing frauds' and has been compared to a 'fishing expidition'.

The suit claims the following.

First, Rogers is indebted to the company in the sum of at least $180,000 on a debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.

Second, Rogers is indebted to the company in the amount of any company funds used for purposes other than in compliance of the LLC Agreement or the Subscription Agreement for false pretenses, false representations, or actual fraud.

Third, Plaintiffs request the Court declare Rogers home be subject to a constructive trust in favor of the Plaintiffs for the amount of $180,000. The basis of this request is that; (a) Rogers committed actual fraud or has committed constructive fraud through the breach of a preexisting fiduciary or confidential relationship (b) Rogers would be unjustly enriched by retaining the proceeds of the wrong and (c) there is a traceable res upon which to impress the trust.

Fourth, Plaintiffs request the Court to enter an order requiring Rogers to render a forensic audit of all transactions engaged in by Rogers.

In 2006, Kelly Rogers was sued by the SEC for his involvement as a facilitator in a ponzi scheme. The original complaint was filed on July 18th, 2007, Case 4:07cv346. Eventually, Rogers agreed to a final judgment contained in Doc 7-2, signed by Rogers. In the agreement, Rogers agrees to a variety of rules and restraints.

The ramifications of the; Bill Thompson, CR591, LLC et al v. Kelly Gordon Rogers are very important since it expose specifics of how Rogers sold securities to these investors. These details will be instrumental in answering the question; did Rogers violate his settlement with the SEC? Further, will any of these allegations assist the Collin County DA win a conviction on their indictment of Kelly Rogers? And did Rogers violate any FINRA rules when raising these funds for Falcon Energy, LLC-Buck Hamilton Series deal? For those who don't know, FINRA exists to for investor protections. They work hand in hand with the SEC. On you review their website, the headline reads; "Investor Protection, Market Interity". If you look at the SEC Case 4:07cv346 against Kelly Rogers, Marshall Gandy was the lead attorney for the SEC. If you review Marshall Gandy's new Lindedin profile, he is now Senior Regional Counsel at FINRA.

More to come.