Sep 13

Austin attorney Robert Allen Helms and his business partner, Janniece S. Kaelin, were each sentenced to 78 months in federal prison on Sept. 12 for stealing millions of dollars from investors who sank money into an oil-and-gas royalties scam.

Helms and Kaelin had pleaded guilty on April 11 to federal charges of securities fraud, conspiracy to commit securities fraud, and mail fraud.

Helms and Kaelin raised approximately $30 million from more than 100 investors in Vendetta Royalty Partners Ltd., Iron Rock Royalty Partners LP, and related ventures.

To entice investors, Helms and Kaelin falsified documents that vastly inflated the worth of Vendetta’s assets – a deception that was just one of a string of lies to gain the trust of investors.

U.S. District Judge Lee Yeakel of the Western District of Texas will schedule a separate hearing to determine how much restitution Helms and Kaelin must pay to investors. The restitution amount could reach $30 million, according to prosecutors.

Helms and Kaelin spent at least $9 million of investor money on purchases for themselves, friends, and family. They didn’t stint on luxury items, spending $600,000 on buying and remodeling houses, $400,000 for weddings, $500,000 for personal travels, and $300,000 on Helms’ collection of Mercedes-Benz and BMW vehicles.

Helms and Kaelin operated Vendetta and related companies as a Ponzi scheme by paying some investors their share of royalty payments with money from other investors.

Helms and Kaelin falsely told prospective investors that Kaelin had valuable business contracts in the oil and gas business and proprietary software that would identify investment opportunities.

The pair falsely stated to investors that there were no legal proceedings pending against them. However, they had been sued multiple times for fraud and other allegations related to the sale of royalty interests.

The U.S. Attorney’s Office in Austin prosecuted Helms and Kaelin with the investigative assistance of the Texas State Securities Board; the FBI; and the U.S. Secret Service.

Rani Sabban, an investigator with the Texas State Securities Board, provided financial analysis and other investigative assistance in the case and testified at the sentencing hearing.