SEC v. Courtney Kelln, No. 1:21-cv-11276, District of Massachusetts (June 26, 2024) — Judgment

1

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
       )
SECURITIES AND EXCHANGE            )
COMMISSION,                         )
       )
               Plaintiff,          )
       )
v.                                   )          CIVIL     ACTION
                                   )          NO.     21-11276-WGY
FREDERICK L. SHARP,                )
ZHIYING YVONNE GASARCH,            )
COURTNEY     KELLN,                    )
MIKE     K.     VELDHUIS,                    )
PAUL     SEXTON,                         )
JACKSON T. FRIESEN,                )
WILLIAM     T.     KAITZ,                    )
AVTAR S. DHILLON, and              )
GRAHAM     R.     TAYLOR,                    )
       )
               Defendants.          )
       )
___________________________________)

YOUNG,     D.J.                                        June     20,     2024

JUDGMENT AS TO DEFENDANT COURTNEY KELLN

On June 13, 2023, Defendant Courtney Kelln (“Defendant” or
“Kelln”) agreed not to contest her liability for violating
Sections 5(a), 5(c), 17(a)(1) and 17(a)(3) of the Securities Act
of 1933 and Section 10(b) of the Securities Exchange Act of 1934
and Rules 10b-5(a) and (c) thereunder, and for aiding and
abetting others’ violations of those provisions.  Dkt. No. 315.
The following day, the Court entered judgment against Kelln
which included permanent injunctions and a penny stock bar.
Dkt. No. 317.  The permanent injunctions and penny stock bar

2

remain in full force and effect and are incorporated herein.
That judgment also contemplated additional monetary remedies
that would be determined by the Court at a later date, and that
Kelln would not contest liability for purposes of that
determination.  Id.  On May 8, 2024, the Court, at a hearing,
imposed a civil penalty on Kelln that is incorporated into this
judgment.  The Court held the issues of disgorgement and
prejudgment interest under advisement.  Accordingly, the Court
enters partial Judgment as follows:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating, directly or
indirectly, Section 10(b) of the Securities Exchange Act of 1934
(the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means
or instrumentality of interstate commerce, or of the mails, or of
any facility of any national securities exchange, in connection
with the purchase or sale of any security:
(a) to employ any device, scheme, or artifice to defraud;

(b) to make any untrue statement of a material fact or to
omit  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

3

(c) to  engage  in  any  act,  practice,  or  course  of
business which operates or would operate as a fraud
or deceit upon any person.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the
foregoing paragraph also binds the following who receive actual
notice of this Judgment by personal service or otherwise: (a)
Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with
Defendant or with anyone described in (a).
II.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating Section
17(a) of the Securities Act of 1933 (the “Securities Act”) [15
U.S.C. § 77q(a)] in the offer or sale of any security by the use
of any means or instruments of transportation or communication in
interstate commerce or by use of the mails, directly or indirectly:

(a) to employ any device, scheme, or artifice to defraud;

(b) to obtain money or property by means of any untrue
statement of a material fact or any omission of a
material fact necessary in order to make the
statements made, in light of the circumstances under
which they were made, not misleading; or

4

(c) to engage in any transaction, practice, or course of
business which operates or would operate as a fraud
or deceit upon the purchaser.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the
foregoing paragraph also binds the following who receive actual
notice of this Judgment by personal service or otherwise: (a)
Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with
Defendant or with anyone described in (a).

III.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating Section 5 of
the Securities Act [15 U.S.C. § 77e] by, directly or indirectly,
in the absence of any applicable exemption:
(a) Unless a registration statement is in effect as to a
security, making use of any means or instruments of
transportation or communication in interstate commerce
or of the mails to sell such security through the use
or medium of any prospectus or otherwise;
(b) Unless a registration statement is in effect as to a
security, carrying or causing to be carried through
the mails or in interstate commerce, by any means or

5

instruments of transportation, any such security for
the purpose of sale or for delivery after sale; or
(c) Making use of any means or instruments of
transportation or communication in interstate commerce
or of the mails to offer to sell or offer to buy
through the use or medium of any prospectus or
otherwise any security, unless a registration
statement has been filed with the Commission as to
such security, or while the registration statement is
the subject of a refusal order or stop order or (prior
to the effective date of the registration statement)
any public proceeding or examination under Section 8
of the Securities Act [15 U.S.C. § 77h].
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the
foregoing paragraph also binds the following who receive actual
notice of this Judgment by personal service or otherwise: (a)
Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with
Defendant or with anyone described in (a).

IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently barred from participating in an offering of penny
stock, including engaging in activities with a broker, dealer, or

6

issuer for purposes of issuing, trading, or inducing or attempting
to induce the purchase or sale of any penny stock.  A penny stock
is any equity security that has a price of less than five dollars,
except as provided in Rule 3a51-1 under the Exchange Act [17
C.F.R. § 240.3a51-1].
V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant
to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)],
Defendant is permanently restrained and enjoined from directly
or indirectly, including, but not limited to, through an entity
owned or controlled by her, participating in the issuance,
purchase, offer, or sale of any security; provided, however,
that such injunction shall not prevent Defendant from purchasing
or selling securities listed on a national securities exchange
for her own personal account.
VI.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that (i)
Defendant is jointly and severally liable with co-Defendant
Frederick L. Sharp for disgorgement of $1,582,785.00,
representing profits gained as a result of the conduct on which
she was found liable, and (ii) Defendant is liable for a civil
penalty in the amount of $904,078.00 pursuant to Section 21(d)
of the Securities Exchange Act of 1934 (“Exchange Act”) [15

7

U.S.C. § 78u].  The Court does not award prejudgment interest.
Defendant shall satisfy this obligation by paying $2,486,863.00
to the Securities and Exchange Commission within 30 days after
entry of this Judgment.
Defendant may transmit payment electronically to the
Commission, which will provide detailed ACH transfer/Fedwire
instructions upon request.    Payment may also be made directly
from a bank account via Pay.gov through the SEC website at
http://www.sec.gov/about/offices/ofm.htm.  Defendant may also
pay by certified check, bank cashier’s check, or United States
postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services
Center Accounts
Receivable Branch 6500
South MacArthur
Boulevard Oklahoma
City, OK 73169

and shall be accompanied by a letter identifying the case title,
civil action number, and name of this Court; Courtney Kelln as a
defendant in this action; and specifying that payment is made
pursuant to this Judgment.
Defendant shall simultaneously transmit photocopies of
evidence of payment and case identifying information to the
Commission’s counsel in this action.  By making this payment,
Defendant relinquishes all legal and equitable right, title, and
interest in such funds and no part of the funds shall be

8

returned to Defendant.
The Commission may enforce the Court’s judgment for
penalties by the use of all collection procedures authorized by
law, including the Federal Debt Collection Procedures Act, 28
U.S.C. § 3001 et seq., and moving for civil contempt for the
violation of any Court orders issued in this action.    Defendant
shall pay post judgment interest on any amounts due after 30
days of the entry of this Judgment pursuant to 28 U.S.C. § 1961.
The Commission shall hold the funds, together with any interest
and income earned thereon (collectively, the “Fund”), pending
further order of the Court.
The Commission may propose a plan to distribute the Fund
subject to the Court’s approval.  Such a plan may provide that
the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.
The Court shall retain jurisdiction over the administration of
any distribution of the Fund and the Fund may only be disbursed
pursuant to an Order of the Court.
Regardless of whether any such Fair Fund distribution is
made, amounts ordered to be paid as civil penalties pursuant to
this Judgment shall be treated as penalties paid to the
government for all purposes, including all tax purposes.  To
preserve the deterrent effect of the civil penalty, Defendant
shall not, after offset or reduction of any award of

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compensatory damages in any Related Investor Action based on
Defendant’s payment of disgorgement in this action, argue that
she is entitled to, nor shall she further benefit by, offset or
reduction of such compensatory damages award by the amount of
any part of Defendant’s payment of a civil penalty in this
action (“Penalty Offset”).    If the court in any Related
Investor Action grants such a Penalty Offset, Defendant shall,
within 30 days after entry of a final order granting the Penalty
Offset, notify the Commission’s counsel in this action and pay
the amount of the Penalty Offset to the United States Treasury
or to a Fair Fund, as the Commission directs.   Such a payment
shall not be deemed an additional civil penalty and shall not be
deemed to change the amount of the civil penalty imposed in this
Judgment.  For purposes of this paragraph, a “Related Investor
Action” means a private damages action brought against Defendant
by or on behalf of one or more investors based on substantially
the same facts as alleged in the Complaint in this action.
VII.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court
shall retain jurisdiction of this matter for the purposes of
enforcing the terms of this Judgment.  Further, the asset freeze
order imposed by Paragraph I of this Court’s Order dated October
7, 2021, shall continue in full force and effect until the
monetary obligation imposed by this Judgment is paid in full.

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VIII.
There being no just reason for delay, pursuant to Rule 54(b)
of the Federal Rules of Civil Procedure, the Clerk is ordered to
enter this Judgment forthwith and without further notice.

SO ORDERED.

                                             _/s/     William     G.     Young
  WILLIAM G. YOUNG
  DISTRICT JUDGE

1  

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

___________________________________ 
       ) 
SECURITIES AND EXCHANGE    ) 
COMMISSION,     ) 
       ) 
   Plaintiff,  ) 
       ) 
v.       )  CIVIL ACTION 
       )  NO. 21-11276-WGY 
FREDERICK L. SHARP,    ) 
ZHIYING YVONNE GASARCH,   ) 
COURTNEY KELLN,    ) 
MIKE K. VELDHUIS,    ) 
PAUL SEXTON,     ) 
JACKSON T. FRIESEN,    ) 
WILLIAM T. KAITZ,    ) 
AVTAR S. DHILLON, and   ) 
GRAHAM R. TAYLOR,    ) 
       ) 
   Defendants.  ) 
       ) 
___________________________________) 
 
YOUNG, D.J.        June 20, 2024 

 
JUDGMENT AS TO DEFENDANT COURTNEY KELLN 

 
On June 13, 2023, Defendant Courtney Kelln (“Defendant” or 

“Kelln”) agreed not to contest her liability for violating 

Sections 5(a), 5(c), 17(a)(1) and 17(a)(3) of the Securities Act 

of 1933 and Section 10(b) of the Securities Exchange Act of 1934 

and Rules 10b-5(a) and (c) thereunder, and for aiding and 

abetting others’ violations of those provisions.  Dkt. No. 315. 

The following day, the Court entered judgment against Kelln 

which included permanent injunctions and a penny stock bar.  

Dkt. No. 317.  The permanent injunctions and penny stock bar 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 1 of 10



2  

remain in full force and effect and are incorporated herein. 

That judgment also contemplated additional monetary remedies 

that would be determined by the Court at a later date, and that 

Kelln would not contest liability for purposes of that 

determination.  Id.  On May 8, 2024, the Court, at a hearing, 

imposed a civil penalty on Kelln that is incorporated into this 

judgment.  The Court held the issues of disgorgement and 

prejudgment interest under advisement.  Accordingly, the Court 

enters partial Judgment as follows: 

I. 

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 

permanently restrained and enjoined from violating, directly or 

indirectly, Section 10(b) of the Securities Exchange Act of 1934 

(the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 

promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means 

or instrumentality of interstate commerce, or of the mails, or of 

any facility of any national securities exchange, in connection 

with the purchase or sale of any security: 

(a) to employ any device, scheme, or artifice to defraud; 
 

(b) to make any untrue statement of a material fact or to 

omit 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 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 2 of 10



3  

(c) to engage in any act, practice, or course of 

business which operates or would operate as a fraud 

or deceit upon any person. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 

provided in Federal Rule of Civil Procedure 65(d)(2), the 

foregoing paragraph also binds the following who receive actual 

notice of this Judgment by personal service or otherwise: (a) 

Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with 

Defendant or with anyone described in (a). 

II. 
 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

is permanently restrained and enjoined from violating Section 

17(a) of the Securities Act of 1933 (the “Securities Act”) [15 

U.S.C. § 77q(a)] in the offer or sale of any security by the use 

of any means or instruments of transportation or communication in 

interstate commerce or by use of the mails, directly or indirectly: 

 
(a) to employ any device, scheme, or artifice to defraud; 

 
(b) to obtain money or property by means of any untrue 

statement of a material fact or any omission of a 

material fact necessary in order to make the 

statements made, in light of the circumstances under 

which they were made, not misleading; or 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 3 of 10



4  

(c) to engage in any transaction, practice, or course of 

business which operates or would operate as a fraud 

or deceit upon the purchaser. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 

provided in Federal Rule of Civil Procedure 65(d)(2), the 

foregoing paragraph also binds the following who receive actual 

notice of this Judgment by personal service or otherwise: (a) 

Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with 

Defendant or with anyone described in (a). 

 
III. 

 
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

is permanently restrained and enjoined from violating Section 5 of 

the Securities Act [15 U.S.C. § 77e] by, directly or indirectly, 

in the absence of any applicable exemption: 

(a) Unless a registration statement is in effect as to a 

security, making use of any means or instruments of 

transportation or communication in interstate commerce 

or of the mails to sell such security through the use 

or medium of any prospectus or otherwise; 

(b) Unless a registration statement is in effect as to a 

security, carrying or causing to be carried through 

the mails or in interstate commerce, by any means or 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 4 of 10



5  

instruments of transportation, any such security for 

the purpose of sale or for delivery after sale; or 

(c) Making use of any means or instruments of 

transportation or communication in interstate commerce 

or of the mails to offer to sell or offer to buy 

through the use or medium of any prospectus or 

otherwise any security, unless a registration 

statement has been filed with the Commission as to 

such security, or while the registration statement is 

the subject of a refusal order or stop order or (prior 

to the effective date of the registration statement) 

any public proceeding or examination under Section 8 

of the Securities Act [15 U.S.C. § 77h]. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 

provided in Federal Rule of Civil Procedure 65(d)(2), the 

foregoing paragraph also binds the following who receive actual 

notice of this Judgment by personal service or otherwise: (a) 

Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with 

Defendant or with anyone described in (a). 

 
IV. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

is permanently barred from participating in an offering of penny 

stock, including engaging in activities with a broker, dealer, or 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 5 of 10



6  

issuer for purposes of issuing, trading, or inducing or attempting 

to induce the purchase or sale of any penny stock.  A penny stock 

is any equity security that has a price of less than five dollars, 

except as provided in Rule 3a51-1 under the Exchange Act [17 

C.F.R. § 240.3a51-1]. 

V. 

 
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant 

to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], 

Defendant is permanently restrained and enjoined from directly 

or indirectly, including, but not limited to, through an entity 

owned or controlled by her, participating in the issuance, 

purchase, offer, or sale of any security; provided, however, 

that such injunction shall not prevent Defendant from purchasing 

or selling securities listed on a national securities exchange 

for her own personal account. 

VI. 
 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that (i) 

Defendant is jointly and severally liable with co-Defendant 

Frederick L. Sharp for disgorgement of $1,582,785.00, 

representing profits gained as a result of the conduct on which 

she was found liable, and (ii) Defendant is liable for a civil 

penalty in the amount of $904,078.00 pursuant to Section 21(d) 

of the Securities Exchange Act of 1934 (“Exchange Act”) [15 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 6 of 10



7  

U.S.C. § 78u].  The Court does not award prejudgment interest.  

Defendant shall satisfy this obligation by paying $2,486,863.00 

to the Securities and Exchange Commission within 30 days after 

entry of this Judgment. 

Defendant may transmit payment electronically to the 

Commission, which will provide detailed ACH transfer/Fedwire 

instructions upon request.  Payment may also be made directly 

from a bank account via Pay.gov through the SEC website at 

http://www.sec.gov/about/offices/ofm.htm.  Defendant may also 

pay by certified check, bank cashier’s check, or United States 

postal money order payable to the Securities and Exchange 

Commission, which shall be delivered or mailed to 

Enterprise Services 
Center Accounts 
Receivable Branch 6500 
South MacArthur 
Boulevard Oklahoma 
City, OK 73169 

 
and shall be accompanied by a letter identifying the case title, 

civil action number, and name of this Court; Courtney Kelln as a 

defendant in this action; and specifying that payment is made 

pursuant to this Judgment. 

Defendant shall simultaneously transmit photocopies of 

evidence of payment and case identifying information to the 

Commission’s counsel in this action.  By making this payment, 

Defendant relinquishes all legal and equitable right, title, and 

interest in such funds and no part of the funds shall be 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 7 of 10



8  

returned to Defendant. 

The Commission may enforce the Court’s judgment for 

penalties by the use of all collection procedures authorized by 

law, including the Federal Debt Collection Procedures Act, 28 

U.S.C. § 3001 et seq., and moving for civil contempt for the 

violation of any Court orders issued in this action.  Defendant 

shall pay post judgment interest on any amounts due after 30 

days of the entry of this Judgment pursuant to 28 U.S.C. § 1961. 

The Commission shall hold the funds, together with any interest 

and income earned thereon (collectively, the “Fund”), pending 

further order of the Court. 

The Commission may propose a plan to distribute the Fund 

subject to the Court’s approval.  Such a plan may provide that 

the Fund shall be distributed pursuant to the Fair Fund 

provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. 

The Court shall retain jurisdiction over the administration of 

any distribution of the Fund and the Fund may only be disbursed 

pursuant to an Order of the Court. 

Regardless of whether any such Fair Fund distribution is 

made, amounts ordered to be paid as civil penalties pursuant to 

this Judgment shall be treated as penalties paid to the 

government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Defendant 

shall not, after offset or reduction of any award of 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 8 of 10



9  

compensatory damages in any Related Investor Action based on 

Defendant’s payment of disgorgement in this action, argue that 

she is entitled to, nor shall she further benefit by, offset or 

reduction of such compensatory damages award by the amount of 

any part of Defendant’s payment of a civil penalty in this 

action (“Penalty Offset”).  If the court in any Related 

Investor Action grants such a Penalty Offset, Defendant shall, 

within 30 days after entry of a final order granting the Penalty 

Offset, notify the Commission’s counsel in this action and pay 

the amount of the Penalty Offset to the United States Treasury 

or to a Fair Fund, as the Commission directs.  Such a payment 

shall not be deemed an additional civil penalty and shall not be 

deemed to change the amount of the civil penalty imposed in this 

Judgment.  For purposes of this paragraph, a “Related Investor 

Action” means a private damages action brought against Defendant 

by or on behalf of one or more investors based on substantially 

the same facts as alleged in the Complaint in this action. 

VII. 
 
 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 

shall retain jurisdiction of this matter for the purposes of 

enforcing the terms of this Judgment.  Further, the asset freeze 

order imposed by Paragraph I of this Court’s Order dated October 

7, 2021, shall continue in full force and effect until the 

monetary obligation imposed by this Judgment is paid in full. 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 9 of 10



10  

 

VIII. 

There being no just reason for delay, pursuant to Rule 54(b) 

of the Federal Rules of Civil Procedure, the Clerk is ordered to 

enter this Judgment forthwith and without further notice. 

 
SO ORDERED.  

 

         _/s/ William G. Young  
  WILLIAM G. YOUNG 
  DISTRICT JUDGE 

 

Case 1:21-cv-11276-WGY   Document 499   Filed 06/20/24   Page 10 of 10