SEC v. CHARLES TRALKA; THOMAS BRAEGELMANN; MATTHEW SULLIVAN; JORDAN E. GOODMAN; ROBERT L. BARR; and GOOD STEWARD CAPITAL MANAGEMENT, INC., No. 5:23-cv-04958, Northern District of California (Sept. 27, 2023) — Complaint

COMPLAINT

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

DANIEL BLAU (Cal. Bar No. 305008)
[email protected]
DANIEL LIM (Cal. Bar No. 292406)
[email protected]
JACOB REGENSTREIF (Cal. Bar No. 234734)
[email protected]

Attorneys for Plaintiff
Securities and Exchange Commission
Katharine E. Zoladz, Co-Acting Regional Director
Gary Leung, Regional Trial Counsel
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone: (323) 965-3998
Facsimile: (213) 443-1904
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

vs.
CHARLES TRALKA, THOMAS
BRAEGELMANN, MATTHEW
SULLIVAN, JORDAN E. GOODMAN,
ROBERT L. BARR, and GOOD STEWARD
CAPITAL MANAGEMENT, INC.,
Defendants,

And

SECURED REAL ESTATE INCOME
FUND I, LLC and SECURED REAL
ESTATE INCOME STRATEGIES, LLC,

Relief Defendants.

 Case No.

COMPLAINT

COMPLAINT
1

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Plaintiff Securities and Exchange Commission (“the Commission” or “the SEC”) alleges:
SUMMARY OF THE ACTION
1. This securities enforcement action concerns an offering fraud perpetrated by the
individuals and entities behind two real estate investment funds, Secured Real Estate Income Fund I,
LLC (“Income Fund”) and Secured Real Estate Income Strategies, LLC (“Income Strategies”)
(collectively, the “Funds” or “Relief Defendants”). From April 2016 through March 2021, Income
Fund and Income Strategies raised over $7.3 million from about 147 investors based on a series of
false promises.
2. Both of the Funds’ offering documents and marketing materials misled investors
regarding a number of material issues. First, the Funds’ offering documents and marketing materials
falsely promised the payment of reliable monthly distributions at an 8% annual rate; in reality, the
funds never made distributions anywhere close to those promised, and they never had the investments
or income to justify their promises of 8% returns. Second, the Funds’ offering documents and
marketing materials falsely boasted that managing members Charles Tralka and Thomas
Braegelmann had over fifty years of real estate investing experience; in reality, Tralka and
Braegelmann had almost no experience investing in real estate for others. Third, the Funds’ offering
documents and marketing materials falsely promised that SEC-registered investment adviser Good
Steward Capital Management, Inc. (“Good Steward”) would make the Funds’ investment decisions;
in reality, Tralka and Braegelmann primarily decided how the funds would invest. Good Steward and
Robert L. Barr, though described as the Funds’ investment adviser, primarily served only in an
administrative capacity. Finally, although Income Strategies’ offering circular stated that it would
meet its $1 million investment threshold with investments from third parties, and keep investor funds
in escrow until such time, Income Strategies in fact met this threshold through investments from
related parties Income Fund and Good Steward and also failed to keep investor funds in escrow.
3. Managing member Matthew Sullivan acted as investor relations, and managing
member Jordan E. Goodman drummed up potential investors through his syndicated radio show.
4. By their actions, Defendants Tralka, Braegelmann, Sullivan, Goodman, Good
Steward, and Barr violated the federal securities laws. Specifically: Defendants Tralka, Braegelmann,

COMPLAINT 2

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

and Sullivan violated Sections 5(a), 5(c), and 17(a)(1) and(3) of the Securities Act of 1933
(“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78u(d), 78u(e), and 78aa] and Rules 10b-
5(a)-(c) thereunder.  Goodman violated Sections 5(a) and 5(c) of the Securities Act.  Good Steward
and Barr violated Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange
Act and Rules 10b-5(a)-(c) thereunder.
5. The SEC requests, among other things, that the Court: (i) permanently enjoin
defendants Tralka, Braegelmann, Sullivan, Goodman, Good Steward, and Barr from further violating
the federal securities laws; (ii) permanently enjoin defendants Tralka, Braegelmann, Sullivan,
Goodman, and Barr from participating in the issuance, purchase, offer, or sale of any security in an
unregistered offering by an issuer; (iii) permanently bar defendants Tralka, Braegelmann, Sullivan,
and Barr from serving as an officer and director; (iv) order Defendants and Relief Defendants to pay
disgorgement with prejudgment interest; and (v) order defendants to pay civil monetary penalties
based upon these violations.
JURIDISTION AND VENUE
6. The Commission brings this action pursuant to Sections 20(b), 20(d), and 22(a) of the
Securities Act [15 U.S.C. §§ 77t(b), 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 78aa].
7. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and
22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)] and Sections 21(d), 21(e), and
27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
8. Venue is proper in this District pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)]. Acts, practices,
transactions, and courses of business that form the basis for the violations alleged in this Complaint
occurred within this district.  In addition, venue is proper in this district because Defendants Tralka
and Braegelmann reside in this district and Relief Defendants Income Fund and Income Strategies
have their principal place of business in this district.
9. Under Civil Local Rule 3-2(c) and (e), this case should be assigned to the San Jose

COMPLAINT 3

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Division because a substantial part of the events or omissions that give rise to the claims alleged
herein occurred in Santa Clara County.
DEFENDANTS
10. Charles Tralka is a resident of Santa Clara, California. He is a director and manager of
Income Fund’s managing member, SREIF Manager I, LLC and the chief investment officer of
Income Strategies’ managing member, SREIF Manager II, LLC. He has never held any securities
licenses and is not associated with any entity registered with the Commission.
11. Thomas Braegelmann is a resident of Campbell, California. He is a director and
manager of SREIF Manager I and the chief executive officer of SREIF Manager II. He has never held
any securities licenses and is not associated with any entity registered with the Commission.
12. Matthew Sullivan is a resident of Kaysville, Utah. He is a director and manager of
SREIF Manager I and the director of investor relations for SREIF Manager II. He is also the
president of Crowdventure, LLC, through which he owns 50% of SREIF Manager I and 50% of
SREIF Manager II. He formerly held a securities license in the United Kingdom but has never held
any securities licenses in the United States and is not associated with any entity registered with the
Commission.
13. Jordan E. Goodman is a resident of Durham, North Carolina. Until January 2019, he
was a director and manager of SREIF Manager I and was the investment director of SREIF Manager
II. He formerly owned 20% of SREIF Manager I and 20% of SREIF Manager II through his wholly-
owned entity, Amherst Enterprises, Ltd. He has never held any securities licenses and is not
associated with any entity registered with the Commission. In December 2018, the SEC charged
Goodman for touting and securities registration and broker-dealer registration violations involving
the Woodbridge Group of Companies, LLC. Goodman settled the charges without admitting or
denying the allegations and agreed to permanent injunctions against violating Sections 5 and 17(b) of
the Securities Act and Section 15(a) of the Exchange Act, disgorgement of $2.29 million, plus
prejudgment interest of $315,850, a $100,000 civil penalty, and a follow-on administrative
proceeding ordering collateral and penny-stock bars. See Securities and Exchange Commission v.
Jordan E. Goodman, No. 1:18-cv-25303 (S.D. Fla. filed Dec. 18, 2018); In re Jordan E. Goodman,

COMPLAINT 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Rel. No. 34-85008 (Jan. 31, 2019).
14. Good Steward Capital Management, Inc. is an Arizona corporation with its principal
place of business in Tucson, Arizona. Good Steward is owned by Robert Barr through Titan Holdings
Group, Inc., a holding company. Good Steward had one employee, Barr. Good Steward was
registered as an investment adviser with the Commission from 2016 to February 2022 when it
terminated its SEC registration. Good Steward is not state-registered and no longer functions as an
investment adviser.
15. Robert L. Barr is a resident of Tucson, Arizona. He is Good Steward’s CEO, CFO,
president, chief compliance officer and sole employee. Barr holds Series 7, 65, and 66 securities
licenses.
RELIEF DEFENDANTS
18.  Secured Real Estate Income Fund I, LLC (“Income Fund”) is a Delaware limited
liability company with its principal place of business in Campbell, California. Income Fund’s
managing member is SREIF Manager I.
19. Secured Real Estate Income Strategies, LLC (“Income Strategies”) is a Delaware
limited liability company with its principal place of business in Tucson, Arizona. Income Strategies’
managing member is SREIF Manager II.
FACTUAL ALLEGATIONS
A. The Fraudulent Income Fund Offering
20. Tralka, Braegelmann, Sullivan, and Barr created Income Fund.
21. In April 2016, Income Fund began raising money from investors.
22. Income Fund’s Private Placement Memorandum (“PPM”) and marketing materials
claimed that it would invest in a diversified portfolio of real estate loans that it would originate or
acquire and sell.
23. Income Fund’s PPM was available to the public upon request.
24. Income Fund also had a PowerPoint overview of the investment, which was available
to the public upon request from April 2016 to March 2019.
25. Income Fund also had FAQs, which were available to the public upon request from

COMPLAINT 5

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

April 2016 to March 2019.
26. Income Fund made a $30 million offering of Class A membership interests that it
claimed was exempt from registration under Rule 506(b) of Regulation D.
27. From May 2016 through March 2019, Income Fund raised approximately $4,126,469
from about 59 investors.
28. According to Income Fund’s marketing materials, Tralka and Braegelmann had
experience in investing in real estate ventures and thus were responsible for evaluating real estate
investments for the fund.
29. Income Funds’ PPM and marketing materials claimed that Good Steward and Barr
advised Income Fund.
30. Good Steward and Barr served as Income Fund’s investment adviser in name only.
31. Sullivan handled investor relations for Income Fund and his responsibilities included
providing potential investors with information and updates about the fund and answering questions.
32. Sullivan provided the Income Fund PowerPoint and the FAQs to potential investors
who expressed interest.
33. Tralka, Braegelmann, Sullivan, and Barr all reviewed and approved Income Fund’s
PPM and agreed when it was ready to be provided to investors.
34. Sullivan drafted marketing materials for Income Fund, and the marketing materials
were reviewed and approved by Tralka, Braegelmann, and Sullivan.
35. Goodman solicited investors by promoting the fund on his radio show and in one-on-
one communications with investors.
36. As of March 2019, Income Fund stopped taking new investor funds or making new
investments.
37. In addition, according to Barr, Good Steward stopped advising Income Fund in March
2019, and Income Fund does not have an investment adviser.
1. Failure to pay promised monthly distributions
38. Income Fund’s PPM and marketing materials misrepresented to investors that they
would be paid an 8% return on their investment.

COMPLAINT 6

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

39. Income Fund’s PPM stated that investors were “entitled to receive an annual preferred
return . . . on their investment . . . . equal to an annualized rate of eight percent (8.00%). . . .
calculated and distributed on a monthly basis.”
40. Income Fund’s PowerPoint overview of the investment similarly promised investors
that they would receive “a reliable stream of monthly income” – specifically, an “8% Annual Interest
Rate paid monthly.”
41. In addition, Income Fund’s April 2016 FAQs stated that the fund “pays investors an
annual dividend of 8%, payable monthly in equal installments.”
42. However, contrary to representations in Income Fund’s PPM and marketing materials,
Tralka, Braegelmann, Sullivan and Barr stopped paying investors promised monthly distributions
while Income Fund was still raising money from investors.
43. Tralka, Braegelmann, Sullivan and Barr paid only about half of the monthly
distributions promised to investors.
44. Tralka, Braegelmann, Sullivan, and Barr failed to collect interest on loans and instead
allowed interest to accrue over the course of years while still selling Income Fund’s securities.
45. Tralka, Braegelmann, Sullivan and Barr could not pay investors the return promised
because Income Fund did not collect sufficient interest on its loan investments.
46. Although Income Fund invested in eleven real estate loans, it did not collect the
interest owed on the majority of these loans.
47. Instead, the fund accrued interest on its books, and Income Fund’s bookkeeper
maintained monthly spreadsheets showing the continued accrual of interest on the loans.
48. As of March 2019, Income Fund had accrued $716,862.40 in unpaid interest
receivable by Income Fund on loans totaling approximately $3.5 million.
49. Tralka, Braegelmann and Sullivan had access to Income Funds’ books but never
reviewed them.
50. Tralka and Braegelmann admitted that they did not know if the loans were in default.
51.  Barr also had access to the books and worked directly with Income Fund’s
bookkeeper.

COMPLAINT 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

52. Income Fund continued to raise investor funds through March 2019 with no change to
these representations.
53. Income Fund stopped paying returns entirely by March 2019.
54. The representations that Income Fund would pay an 8% return were material to
investors’ decisions to invest in Income Fund.
55. When investors complained about not receiving their promised returns, Barr and
Sullivan lulled them with various explanations.
2. Misrepresentations Regarding Experienced Managers
56. Income Fund’s PPM and marketing materials misrepresented to investors that its
managers had substantial real estate experience.
57. Income Fund’s PPM represented that Tralka “over the last twenty years has bought,
held and sold multiple investment properties” and described Braegelmann as having a “30+ year
career in real estate investing, commercial construction, land development, and private lending.”
Similarly, Income Fund’s FAQs stated that Tralka and Braegelmann had a “combined total of more
than 50 years of real estate investment experience.”
58. Tralka and Braegelmann, however, had limited real estate experience.
59. Tralka was involved in real estate investing for only a few years and previously
worked for a semiconductor company.
60. Tralka had never before invested in real estate loans on anyone else’s behalf before
managing Income Fund.
61. Braegelmann had owned a landscaping company and, as a side business, flipped
houses prior to investing in real estate in the mid-1990s.
62. Braegelmann did not start raising funds from real estate investors until 2010 or 2011.
63. Similarly, Sullivan had little real estate investment experience before Income Fund.
64. The representations that Income Fund’s managers had substantial real estate
experience were material to investors’ decisions to invest in Income Fund.
3. Good Steward and Barr’s failure to make investment decisions
65. Income Fund’s PPM misrepresented that Good Steward – an SEC-registered

COMPLAINT 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

investment advisor in the relevant period that owed a fiduciary duty to its advisory clients – and its
associated person and sole employee, Barr, would be responsible for making investment decisions.
66. Specifically, the PPM stated that Good Steward, as Income Fund’s “Investment
Manager,” “is responsible for investing the capital and resources of the Fund and monitoring such
investments, as necessary, in order to achieve the Fund’s investment objective.”
67. In reality, Tralka and Braegelmann primarily decided how Income Fund would invest.
68. Barr instead served only as Income Fund’s administrator.
69. Tralka, Braegelmann, Sullivan, Barr, and Good Steward allowed Tralka and
Braegelmann to make the investment decisions for Income Fund instead of Good Steward and Barr.
70. The representations that Good Steward and Barr would be responsible for making
investment decisions were material to investors’ decisions to invest in Income Fund.
B. The Fraudulent Income Strategies Offering
71. In the spring and summer of 2017, Tralka, Braegelmann, Sullivan, and Barr decided to
start the Income Strategies investment fund. Like Income Fund, Income Strategies claimed to invest
in a diversified portfolio of real estate loans.
72. Income Strategies raised funds pursuant to a $50 million Regulation A offering that
was qualified on September 28, 2017.
73. From March 2018 through February 2019, Income Strategies raised approximately
$3,174,989.68 from about 96 investors (including investments from affiliates Income Fund and Good
Steward).
74. Income Strategies had a website from 2017 through at least 2021.
75. Income Strategies used two registered broker-dealers to solicit potential investors.
76. Income Strategies had an offering circular that was available to the public from 2017
through the present.
77. Income Strategies had a slide deck that contained an investor presentation and which
was presented to potential investors in at least 2017 and 2018.
78. Tralka, Braegelmann, Sullivan, Goodman and Barr served in the same roles for
Income Strategies as they had for Income Fund.

COMPLAINT 9

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

79. Tralka, Braegelmann, Sullivan, and Barr reviewed and approved the offering circular.
80. Tralka, Braegelmann, Sullivan, and Barr drafted and approved the fund’s website
content.
81. Tralka, Braegelmann, and Sullivan prepared, reviewed and approved the investor
presentation slide deck.
1. False and misleading representations regarding reaching the
investment minimum and escrow
82. Income Strategies’ offering circular represented to potential investors that it would not
use investor funds, and would hold them in escrow, until it raised $1 million from third party
investors.
83. Specifically, the offering circular represented that “[w]e will not start operations or
draw down on investors’ funds and admit investors as members until we have raised at least
$1,000,000 in this offering. Until the minimum threshold is met, investors’ funds will be revocable
and will be held in an escrow account . . . . .” The offering circular further explained that “[w]e will
not commence any significant investment operations until we have raised $1,000,000 from persons
who are not affiliated with us or our Managing Member.”
84. These representations, however, were false and misleading.
85. First, a lmost 85% of the purported $1 million threshold was compromised of
investment from affiliates Income Fund and Good Steward, and not from third party investors.
86. Specifically, in February 2018, approximately $215,426.60 was transferred from
Income Fund and $630,666.66 from Good Steward, for a total of $846,093, to Income Strategies.
87. Tralka, Braegelmann, Sullivan, Good Steward and Barr were responsible for these
transfers.
88. Second, once Income Strategies received funds from individual investors, in February
and March 2018, when it raised $281,000, Tralka, Braegelmann, Sullivan, and Barr started loaning
these investor funds for property development without having reached $1 million raised from third
party investors.
89. Third, because Tralka, Braegelmann, Sullivan, and Barr immediately started using

COMPLAINT 10

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

investor funds, these initial investor funds were never held in escrow as promised. In fact, it was not
until June 2018 that Income Strategies raised $1 million from third party investors.
90. Tralka, Braegelmann and Barr had planned as early as December 2017 for Income
Fund to invest in Income Strategies.
91. Tralka understood that Income Strategies could only commence investment activity
when the $1 million investment minimum was reached.
92. In addition, Sullivan understood that without the investment from affiliate Income
Fund, Income Strategies’ investor funds would remain in escrow “doing nothing” and no investments
could be made.
93. Tralka, Braegelmann, Sullivan, Barr, and Good Steward used money from Income
Strategies affiliates Income Fund and Good Steward to purportedly reach the $1 million investment
minimum necessary to begin investing.
94. The representations that funds would be held in escrow until a minimum $1 million
investment minimum were met were material to investors’ decisions to invest in Income Strategies.
2. Failure to pay promised monthly distributions
95. Similar to Income Fund, Income Strategies represented in its offering circular that it
would invest “with the goal of attaining a portfolio of real estate assets that provide attractive and
stable returns to our investors.”
96. Furthermore, Income Strategies’ investor presentation slide deck stated that it targeted
an 8% return and explicitly described “Distributions” as “[m]onthly cash distributions to investors to
pay an annualized 8.0% preferred return.”
97. Income Strategies continued to raise investor funds through approximately February
2019 without any changes to these representations.
98. Income Strategies accounting records show, however, that as early as August 2018,
two loans in the nine-loan portfolio failed to make interest payments.
99. Subsequently, in April 2020, Income Strategies’ independent auditor questioned why
two loans had stopped accruing interest and three loans had stopped paying interest. Barr responded
that two loans were in default, two loans had depleted their interest reserves, and the remaining loan

COMPLAINT 11

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

should be able to accrue interest in the future.
100. As a result, the audit report for FY 2019 stated that the creditworthiness of the
borrowers could not be substantiated and that the audit firm could provide no assurances on the
principal value or the gains and losses recorded in the financial statements.
101. As of March 2021, Income Strategies had $288,469.13 in distributions payable but had
paid only approximately $163,321.08.
102. Tralka, Braegelmann, Sullivan, and Barr failed to collect interest on loans and instead
allowed interest to accrue over the course of years while still selling Income Strategies’ securities.
103. Tralka and Braegelmann failed to review Income Strategies’ financials and did not
know whether any of the loans were in default.
104. Barr received emails from Income Strategies’ auditor and bookkeeper seeking
information related to the missing interest payments, and acknowledged that interest payments were
not being made.
105. In 2020, two Income Strategies investors complained to Sullivan and Barr that they
had not received their regular distributions and that the return on investment was below the promised
8% return.
106. In July 2020, Sullivan told one of these investors that they were trying to sell the
portfolio to repay investors. On information and belief, no such sale has occurred.
107. The representations that Income Strategies would pay an 8% annualized return were
material to investors’ decisions to invest in Income Strategies.
3. Misrepresentations regarding experienced managers
108. Like Income Fund, Income Strategies’ offering circular, its investor presentation slide
deck, and its website, misrepresented to potential investors that its managers had substantial real
estate experience.
109. The offering circular, the slide deck, and the website stated that Tralka “over the last
twenty years has bought, held and sold multiple investment properties” and described Braegelmann
as having a “30+ year career in real estate investing, commercial construction, land development, and
private lending.”

COMPLAINT 12

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

110. These representations regarding Tralka and Braegelmann’s real estate experience were
false and misleading.
111. The representations that Income Strategies’ managers had substantial real estate
experience were material to investors’ decisions to invest in Income Strategies.
4. Good Steward and Barr’s failure to make investment decisions
112. As with Income Fund, Good Steward and Barr were supposed to make the investment
decisions for Income Strategies.
113. Income Strategies’ offering circular stated that its managing member “has delegated
responsibility and authority for making investment decisions for the Company to Good Steward
Capital Management, Inc., an Arizona Corporation and investment adviser registered with the
Securities and Exchange Commission, or SEC (‘Investment Manager’).” The offering circular further
represented that “[w]e depend on our Investment Manager [Good Steward] to select our investments
and conduct our operations,” and that Good Steward, would “have the sole and absolute discretion to
determine whether or not to make, acquire or sell a particular [l]oan.”
114. These claims about Barr’s management of Income Strategies were repeated orally. An
Income Strategies investor who repeatedly spoke to Barr believed that Barr managed the fund.
115. In reality, Tralka and Braegelmann primarily decided how Income Strategies would
invest.
116. Barr instead served only as Income Strategies’ administrator.
117. Tralka, Braegelmann, Sullivan, Barr, and Good Steward allowed Tralka and
Braegelmann to make the investment decisions for Income Strategies instead of Good Steward and
Barr.
118. The representations that Good Steward and Barr would be responsible for making
investment decisions were material to investors’ decisions to invest in Income Strategies.
C. Defendants knew, or were reckless in not knowing, they were making
materially misleading statements and engaging in deceptive conduct
119. Tralka, Braegelmann, Sullivan, Good Steward and Barr knew, or were reckless or
negligent in not knowing, that they made and disseminated materially false and misleading

COMPLAINT 13

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

statements to potential investors.
120. Income Fund’s PPM, for which Tralka, Braegelmann, Sullivan, and Barr were
responsible, and its marketing materials, for which Tralka, Braegelmann and Sullivan were
responsible, falsely represented to potential investors that they would receive a reliable stream of
monthly income at 8% annually, that the fund was managed by experienced real estate investors; and
that Good Steward and Barr would make the investment decisions.
121. Income Strategies’ offering circular and website, for which Tralka, Braegelmann,
Sullivan, and Barr were responsible, and marketing materials, for which Tralka, Braegelmann and
Sullivan were responsible, made similar misrepresentations and also misrepresented that Income
Strategies would meet its $1 million threshold through third party investments.
122. Tralka, Braegelmann, Sullivan, and Barr “made” the statements at issue in Income
Fund’s PPM, Income Strategies’ offering circular, and Income Strategies’ website, because Tralka,
Braegelmann, Sullivan, and Barr drafted, reviewed, and approved Income Fund’s PPM, Income
Strategies’ offering circular, and Income Strategies’ website.
123. Tralka, Braegelmann, and Sullivan “made” the statements at issue in Income Funds’
and Income Strategies’ marketing materials because they drafted, reviewed, and approved the
marketing materials for both funds.
124. In addition, Tralka, Braegelmann, Sullivan, and Barr engaged in fraudulent and
deceptive practices and courses of business by failing to collect interest on loans and instead allowing
interest to accrue over the course of years while still selling Income Fund and Income Strategies’
securities.
125. Barr and Sullivan furthered this deception when they made lulling statements to
Income Fund investors regarding their returns.
126. Tralka, Braegelmann, Sullivan, and Barr and Good Steward engaged in deceptive
practices by allowing Tralka and Braegelmann to make the investment decisions for the fund instead
of Good Steward and Barr.
127. Tralka, Braegelmann, Sullivan, and Barr and Good Steward engaged in a scheme to
use money from affiliates Income Fund and Good Steward to purportedly reach the $1 million

COMPLAINT 14

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

threshold it needed to start investing; furthermore, based on this false threshold, they immediately
started using investor funds for loans and failed to keep these funds in escrow as promised.
128. The misrepresentations and deceptive conduct were in the offer or sale and “in
connection with” the purchase or sale because the Funds’ securities continued to be offered,
purchased and sold after the misrepresentations were made and the deceptive conduct occurred.
129. The false and misleading statements and the deceptive practices are material.
Reasonable investors would have considered these representations and deceptive acts to be important
to their investment decisions.
130. Tralka, Braegelmann, Sullivan, and Barr acted with scienter. Tralka, Braegelmann,
Sullivan, and Barr all prepared and reviewed the offering documents and had access to the Funds’
accounting records, and Tralka, Braegelmann, and Sullivan prepared and reviewed both Funds’
marketing materials.
131. Tralka, Braegelmann, Sullivan, and Barr knew, or were reckless, or, alternatively,
negligent, in not knowing, that multiple material misrepresentations were made to potential investors
and that investor funds raised by Income Strategies were used before the $1 million threshold was
properly met.
132. Good Steward acted through Barr. Therefore, Barr’s knowledge, recklessness, and/or
negligence may be imputed to Good Steward.
D. The offer and sale of investments in Income Funds was an
unregistered offer and sale of securities
133. Income Fund’s offer and sale of securities was not registered with the SEC and the
securities were offered and sold through interstate commerce.
134. There was no registration statement in effect or filed with the SEC with respect to the
offering of Income Fund.
135. No exemption applies to Income Fund’s offer and sale of securities.
136. Income Fund engaged in general solicitation.
137. Income Fund sold membership interests to investors residing throughout the United
States.

COMPLAINT 15

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

138. In addition, Income Fund failed to take reasonable steps to verify whether investors
actually qualified as accredited investors.
139. Tralka, Braegelmann, and Sullivan sold Income Fund securities because they
controlled Income Fund’s managing member, drafted the offering and marketing materials and
approved the offering.
140. Sullivan and Goodman communicated with potential investors in Income Fund.
141. Most of the investors with whom Sullivan and Goodman communicated did not have
pre-existing substantive relationships with them.
142. Sullivan and Goodman described, both orally and in writing, Income Fund’s business
and the investment to potential investors.
143. Goodman solicited investors and advertised Income Fund by promoting the fund on
his broadcast radio show and in one-on-one communications with investors.
144. Goodman provided potential investors with specific information directly related to
Income Fund, including, for example, that they could expect an 8% return on their investment.
145. Goodman also provided potential investors with Sullivan’s phone number.
146. Sullivan would then give the potential investors the same information provided by
Goodman, as well as additional detail if they asked.
FIRST CLAIM FOR RELIEF
Fraud in Connection with the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
(Against Defendants Tralka, Braegelmann, Sullivan, Good Steward, and Barr)
147. The SEC realleges and incorporates by reference paragraphs 1 through 146 above.
148. As set forth above, in connection with the purchase or sale of securities, Defendants
Tralka, Braegelmann, Sullivan, Good Steward and Barr engaged in a scheme to defraud and made
material misrepresentations to investors with scienter.  These included statements to potential
investors regarding: (1) the payment of reliable monthly distributions at an 8% annual rate; (2) Tralka
and Braegelmann’s purported real estate investing experience in excess of fifty years; (3) that SEC-
registered investment adviser Good Steward would make the funds’ investment decisions, and (4)

COMPLAINT 16

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

that Income Strategies would keep investor funds in escrow until meeting its $1 million investment
threshold with investments from third parties. These also included fraudulent and deceptive practices
and courses of business such as (1) failing to collect interest on loans and instead allowing interest to
accrue over the course of years while still selling Income Fund and Income Strategies’ securities, and
making lulling statements to Income Fund investors regarding their returns; (2) allowing Tralka and
Braegelmann to make the investment decisions for Income Fund and Income Strategies instead of
Good Steward and Barr; (3) using money from Income Fund and Good Steward to purportedly reach
the $1 million threshold for Income Strategies to start investing, and based on this false threshold,
immediately starting to use investor funds for loans and failed to keep these funds in escrow as
promised.
149. By engaging in the conduct described above, Defendants Tralka, Braegelmann,
Sullivan, Good Steward and Barr, and each of them, directly or indirectly, in connection with the
purchase or sale of a security, and by the use of means or instrumentalities of interstate commerce, of
the mails, or of the facilities of a national securities exchange:  (a) employed devices, schemes, or
artifices to defraud; (b) made untrue statements of a material fact or omitted to state a material fact
necessary in order to make the statements made, in the light of the circumstances under which they
were made, not misleading; or (c) engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon other persons.
150. By engaging in the conduct described above, Defendants Tralka, Braegelmann,
Sullivan, Good Steward and each violated, and unless restrained and enjoined will continue to
violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5(b) thereunder, 17
C.F.R. § 240.10b-5(b).
SECOND CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities
Violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act
(Against Defendants Tralka, Braegelmann, Sullivan, Good Steward, and Barr)
151. The SEC realleges and incorporates by reference paragraphs 1 through 146 above.
152. As set forth above, in connection with the purchase or sale of securities, Defendants

COMPLAINT 17

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Tralka, Braegelmann, Sullivan, Good Steward and Barr engaged in a scheme to defraud and made
material misrepresentations to investors with scienter or negligently.  These included statements to
potential investors regarding: (1) the payment of reliable monthly distributions at an 8% annual rate;
(2) Tralka and Braegelmann’s purported real estate investing experience in excess of fifty years; (3)
that SEC-registered investment adviser Good Steward would make the funds’ investment decisions,
and (4) that Income Strategies would keep investor funds in escrow until meeting its $1 million
investment threshold with investments from third parties. These also included fraudulent and
deceptive practices and courses of business such as (1) failing to collect interest on loans and instead
allowing interest to accrue over the course of years while still selling Income Fund and Income
Strategies’ securities, and making lulling statements to Income Fund investors regarding their returns;
(2) allowing Tralka and Braegelmann to make the investment decisions for Income Fund and Income
Strategies instead of Good Steward and Barr; (3) using money from Income Fund and Good Steward
to purportedly reach the $1 million threshold for Income Strategies to start investing, and based on
this false threshold, immediately starting to use investor funds for loans and failed to keep these funds
in escrow as promised.
153. By engaging in the conduct described above, Defendants Tralka, Braegelmann,
Sullivan, Good Steward and Barr, directly or indirectly, 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 employed devices, schemes, or artifices to defraud or engaged in transactions, practices, or
courses of business which operated or would operate as a fraud or deceit upon the purchaser.
154. By engaging in the conduct described above, Defendants Tralka, Braegelmann,
Sullivan, Good Steward and Barr violated, and unless restrained and enjoined will continue to violate,
Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77q(a)(1) & 77q(a)(3).
THIRD CLAIM FOR RELIEF
Unregistered Offer and Sale of Securities
Violations of Sections 5(a) and 5(c) of the Securities Act
(Against Defendants Tralka, Braegelmann, Sullivan, and Goodman)
155. The SEC realleges and incorporates by reference paragraphs 1 through 146 above.

COMPLAINT 18

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

156. Defendants Tralka, Braegelmann, Sullivan, and Goodman directly or indirectly
offered and sold Income Fund’s securities in offerings that are not registered with the SEC and that
are not subject to a valid exemption to registration.
157. By engaging in the conduct described above, Defendants Tralka, Braegelmann,
Sullivan, and Goodman, directly or indirectly, singly and in concert with others, has made use of the
means or instruments of transportation or communication in interstate commerce, or of the mails, to
offer to sell or to sell securities, or carried or caused to be carried through the mails or in interstate
commerce, by means or instruments of transportation, securities for the purpose of sale or for
delivery after sale, when no registration statement had been filed or was in effect as to such securities,
and when no exemption from registration was applicable.
158. By engaging in the conduct described above, Defendants Tralka, Braegelmann,
Sullivan, and Goodman each violated, and unless restrained and enjoined, will continue to violate,
Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c).
FOURTH CLAIM FOR RELIEF
Unjust Enrichment
(Against Relief Defendants Income Fund and Income Strategies)
159. The SEC realleges and incorporates by reference paragraphs 1 through 146 above.
160. Relief defendants Income Fund and Income Strategies received proceeds from
Defendants’ conduct, funds over which they have no legitimate claim.
161. Relief defendants Income Fund and Income Strategies obtained the ill-gotten gains
described above as part of the securities law violations alleged above, under circumstances in which
it is not just, equitable, or conscionable for them to retain the funds.
162. By engaging in the foregoing conduct, Income Fund and Income Strategies have been
unjustly enriched and must disgorge their ill-gotten gains.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court:
I.
Issue findings of fact and conclusions of law that Defendants committed the alleged

COMPLAINT 19

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

violations.
II.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
permanently enjoining Defendants Tralka, Braegelmann, Sullivan and their officers, agents, servants,
employees, and attorneys, and those persons in active concert or participation with any of them, who
receive actual notice of the judgment by personal service or otherwise, and each of them, from
violating Sections 5(a), 5(c), and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), 77e(c), and
77q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5]; enjoining Defendant Goodman, his officers, agents, servants, employees, and
attorneys, and those persons in active concert or participation with any of them, who receive actual
notice of the judgment by personal service or otherwise, and each of them, from violating Sections
5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)]; and enjoying Defendants Good
Steward and Barr and their officers, agents, servants, employees and attorneys, and those persons in
active concert or participation with any of them, who receive actual notice of the judgment by
personal service or otherwise, and each of them, from violating Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
III.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], permanently enjoining
Defendants Tralka, Braegelmann, Sullivan, Goodman, Barr and their officers, agents, servants,
employees and attorneys, and those persons in active concert or participation with any of them, who
receive actual notice of the judgment by personal service or otherwise, from, directly or indirectly,
including, but not limited to, through any entity owned or controlled by each, participating in the
issuance, purchase, offer, or sale of any security in an unregistered offering by an issuer, provided,
however, that such injunction shall not prevent each from purchasing or selling securities for his own
personal account.

COMPLAINT 20

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

IV.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and/or Section 20(e) of the
Securities Act [15 U.S.C. § 77t(e)], prohibiting Defendants Tralka, Braegelmann, Sullivan, and Barr
from acting as an officer or director of any issuer that has a class of securities registered pursuant to
Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to Section
15(d) of the Exchange Act [15 U.S.C. § 78o(d)].
V.
Order Defendants to disgorge all funds received from their illegal conduct, together with
prejudgment interest thereon, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5) and 21(d)(7) [15
U.S.C. §§ 78u(d)(3), 78u(d)(5) and 78u(d)(7)].
VI.
Order Relief Defendants to disgorge all ill-gotten gains or unjust enrichment derived from the
activities set forth in this Complaint, together with prejudgment interest thereon.
VII.
Order Defendants to pay civil penalties under Section 20(d) of the Securities Act [15 U.S.C. §
77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].
VII.
Retain jurisdiction of this action in accordance with the principles of equity and the Federal
Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that
may be entered, or to entertain any suitable application or motion for additional relief within the
jurisdiction of this Court.
///
///
///
///
///
///

COMPLAINT 21

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

VII.
Grant such other and further relief as this Court may determine to be just and necessary.

Dated:  September 27, 2023      Respectfully submitted,

/s / Daniel O. Blau
Daniel O. Blau
Jacob Regenstreif
Daniel Lim
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

COMPLAINT   
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

 
DANIEL BLAU (Cal. Bar No. 305008) 
[email protected] 
DANIEL LIM (Cal. Bar No. 292406) 
[email protected] 
JACOB REGENSTREIF (Cal. Bar No. 234734) 
[email protected] 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Katharine E. Zoladz, Co-Acting Regional Director 
Gary Leung, Regional Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 
 
 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

CHARLES TRALKA, THOMAS 
BRAEGELMANN, MATTHEW 
SULLIVAN, JORDAN E. GOODMAN, 
ROBERT L. BARR, and GOOD STEWARD 
CAPITAL MANAGEMENT, INC., 

Defendants, 
 

And 
 
SECURED REAL ESTATE INCOME 
FUND I, LLC and SECURED REAL 
ESTATE INCOME STRATEGIES, LLC,  
 

Relief Defendants. 
 

 Case No. 
 
 
COMPLAINT 
 

 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 1 of 22



 

COMPLAINT 1  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

Plaintiff Securities and Exchange Commission (“the Commission” or “the SEC”) alleges:  

SUMMARY OF THE ACTION 

1. This securities enforcement action concerns an offering fraud perpetrated by the 

individuals and entities behind two real estate investment funds, Secured Real Estate Income Fund I, 

LLC (“Income Fund”) and Secured Real Estate Income Strategies, LLC (“Income Strategies”) 

(collectively, the “Funds” or “Relief Defendants”). From April 2016 through March 2021, Income 

Fund and Income Strategies raised over $7.3 million from about 147 investors based on a series of 

false promises. 

2. Both of the Funds’ offering documents and marketing materials misled investors 

regarding a number of material issues. First, the Funds’ offering documents and marketing materials 

falsely promised the payment of reliable monthly distributions at an 8% annual rate; in reality, the 

funds never made distributions anywhere close to those promised, and they never had the investments 

or income to justify their promises of 8% returns. Second, the Funds’ offering documents and 

marketing materials falsely boasted that managing members Charles Tralka and Thomas 

Braegelmann had over fifty years of real estate investing experience; in reality, Tralka and 

Braegelmann had almost no experience investing in real estate for others. Third, the Funds’ offering 

documents and marketing materials falsely promised that SEC-registered investment adviser Good 

Steward Capital Management, Inc. (“Good Steward”) would make the Funds’ investment decisions; 

in reality, Tralka and Braegelmann primarily decided how the funds would invest. Good Steward and 

Robert L. Barr, though described as the Funds’ investment adviser, primarily served only in an 

administrative capacity. Finally, although Income Strategies’ offering circular stated that it would 

meet its $1 million investment threshold with investments from third parties, and keep investor funds 

in escrow until such time, Income Strategies in fact met this threshold through investments from 

related parties Income Fund and Good Steward and also failed to keep investor funds in escrow.   

3. Managing member Matthew Sullivan acted as investor relations, and managing 

member Jordan E. Goodman drummed up potential investors through his syndicated radio show.   

4. By their actions, Defendants Tralka, Braegelmann, Sullivan, Goodman, Good 

Steward, and Barr violated the federal securities laws. Specifically: Defendants Tralka, Braegelmann, 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 2 of 22



 

COMPLAINT 2  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

and Sullivan violated Sections 5(a), 5(c), and 17(a)(1) and(3) of the Securities Act of 1933 

(“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Section 10(b) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78u(d), 78u(e), and 78aa] and Rules 10b-

5(a)-(c) thereunder.  Goodman violated Sections 5(a) and 5(c) of the Securities Act.  Good Steward 

and Barr violated Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange 

Act and Rules 10b-5(a)-(c) thereunder. 

5. The SEC requests, among other things, that the Court: (i) permanently enjoin 

defendants Tralka, Braegelmann, Sullivan, Goodman, Good Steward, and Barr from further violating 

the federal securities laws; (ii) permanently enjoin defendants Tralka, Braegelmann, Sullivan, 

Goodman, and Barr from participating in the issuance, purchase, offer, or sale of any security in an 

unregistered offering by an issuer; (iii) permanently bar defendants Tralka, Braegelmann, Sullivan, 

and Barr from serving as an officer and director; (iv) order Defendants and Relief Defendants to pay 

disgorgement with prejudgment interest; and (v) order defendants to pay civil monetary penalties 

based upon these violations. 

JURIDISTION AND VENUE 

6. The Commission brings this action pursuant to Sections 20(b), 20(d), and 22(a) of the 

Securities Act [15 U.S.C. §§ 77t(b), 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 78aa].  

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

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)] and Sections 21(d), 21(e), and 

27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].  

8. Venue is proper in this District pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)]. Acts, practices, 

transactions, and courses of business that form the basis for the violations alleged in this Complaint 

occurred within this district.  In addition, venue is proper in this district because Defendants Tralka 

and Braegelmann reside in this district and Relief Defendants Income Fund and Income Strategies 

have their principal place of business in this district.  

9. Under Civil Local Rule 3-2(c) and (e), this case should be assigned to the San Jose 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 3 of 22



 

COMPLAINT 3  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

Division because a substantial part of the events or omissions that give rise to the claims alleged 

herein occurred in Santa Clara County. 

DEFENDANTS 

10. Charles Tralka is a resident of Santa Clara, California. He is a director and manager of 

Income Fund’s managing member, SREIF Manager I, LLC and the chief investment officer of 

Income Strategies’ managing member, SREIF Manager II, LLC. He has never held any securities 

licenses and is not associated with any entity registered with the Commission. 

11. Thomas Braegelmann is a resident of Campbell, California. He is a director and 

manager of SREIF Manager I and the chief executive officer of SREIF Manager II. He has never held 

any securities licenses and is not associated with any entity registered with the Commission. 

12. Matthew Sullivan is a resident of Kaysville, Utah. He is a director and manager of 

SREIF Manager I and the director of investor relations for SREIF Manager II. He is also the 

president of Crowdventure, LLC, through which he owns 50% of SREIF Manager I and 50% of 

SREIF Manager II. He formerly held a securities license in the United Kingdom but has never held 

any securities licenses in the United States and is not associated with any entity registered with the 

Commission. 

13. Jordan E. Goodman is a resident of Durham, North Carolina. Until January 2019, he 

was a director and manager of SREIF Manager I and was the investment director of SREIF Manager 

II. He formerly owned 20% of SREIF Manager I and 20% of SREIF Manager II through his wholly-

owned entity, Amherst Enterprises, Ltd. He has never held any securities licenses and is not 

associated with any entity registered with the Commission. In December 2018, the SEC charged 

Goodman for touting and securities registration and broker-dealer registration violations involving 

the Woodbridge Group of Companies, LLC. Goodman settled the charges without admitting or 

denying the allegations and agreed to permanent injunctions against violating Sections 5 and 17(b) of 

the Securities Act and Section 15(a) of the Exchange Act, disgorgement of $2.29 million, plus 

prejudgment interest of $315,850, a $100,000 civil penalty, and a follow-on administrative 

proceeding ordering collateral and penny-stock bars. See Securities and Exchange Commission v. 

Jordan E. Goodman, No. 1:18-cv-25303 (S.D. Fla. filed Dec. 18, 2018); In re Jordan E. Goodman, 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 4 of 22



 

COMPLAINT 4  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

Rel. No. 34-85008 (Jan. 31, 2019).   

14. Good Steward Capital Management, Inc. is an Arizona corporation with its principal 

place of business in Tucson, Arizona. Good Steward is owned by Robert Barr through Titan Holdings 

Group, Inc., a holding company. Good Steward had one employee, Barr. Good Steward was 

registered as an investment adviser with the Commission from 2016 to February 2022 when it 

terminated its SEC registration. Good Steward is not state-registered and no longer functions as an 

investment adviser.   

15. Robert L. Barr is a resident of Tucson, Arizona. He is Good Steward’s CEO, CFO, 

president, chief compliance officer and sole employee. Barr holds Series 7, 65, and 66 securities 

licenses. 

RELIEF DEFENDANTS 

18.  Secured Real Estate Income Fund I, LLC (“Income Fund”) is a Delaware limited 

liability company with its principal place of business in Campbell, California. Income Fund’s 

managing member is SREIF Manager I.   

19. Secured Real Estate Income Strategies, LLC (“Income Strategies”) is a Delaware 

limited liability company with its principal place of business in Tucson, Arizona. Income Strategies’ 

managing member is SREIF Manager II. 

FACTUAL ALLEGATIONS 

A. The Fraudulent Income Fund Offering 

20. Tralka, Braegelmann, Sullivan, and Barr created Income Fund.   

21. In April 2016, Income Fund began raising money from investors. 

22. Income Fund’s Private Placement Memorandum (“PPM”) and marketing materials 

claimed that it would invest in a diversified portfolio of real estate loans that it would originate or 

acquire and sell.   

23. Income Fund’s PPM was available to the public upon request. 

24. Income Fund also had a PowerPoint overview of the investment, which was available 

to the public upon request from April 2016 to March 2019. 

25. Income Fund also had FAQs, which were available to the public upon request from 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 5 of 22



 

COMPLAINT 5  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

April 2016 to March 2019. 

26. Income Fund made a $30 million offering of Class A membership interests that it 

claimed was exempt from registration under Rule 506(b) of Regulation D.   

27. From May 2016 through March 2019, Income Fund raised approximately $4,126,469 

from about 59 investors.   

28. According to Income Fund’s marketing materials, Tralka and Braegelmann had 

experience in investing in real estate ventures and thus were responsible for evaluating real estate 

investments for the fund.   

29. Income Funds’ PPM and marketing materials claimed that Good Steward and Barr 

advised Income Fund. 

30. Good Steward and Barr served as Income Fund’s investment adviser in name only.   

31. Sullivan handled investor relations for Income Fund and his responsibilities included 

providing potential investors with information and updates about the fund and answering questions.   

32. Sullivan provided the Income Fund PowerPoint and the FAQs to potential investors 

who expressed interest.   

33. Tralka, Braegelmann, Sullivan, and Barr all reviewed and approved Income Fund’s 

PPM and agreed when it was ready to be provided to investors.  

34. Sullivan drafted marketing materials for Income Fund, and the marketing materials 

were reviewed and approved by Tralka, Braegelmann, and Sullivan.  

35. Goodman solicited investors by promoting the fund on his radio show and in one-on-

one communications with investors.  

36. As of March 2019, Income Fund stopped taking new investor funds or making new 

investments.   

37. In addition, according to Barr, Good Steward stopped advising Income Fund in March 

2019, and Income Fund does not have an investment adviser.   

1. Failure to pay promised monthly distributions 

38. Income Fund’s PPM and marketing materials misrepresented to investors that they 

would be paid an 8% return on their investment. 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 6 of 22



 

COMPLAINT 6  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

39. Income Fund’s PPM stated that investors were “entitled to receive an annual preferred 

return . . . on their investment . . . . equal to an annualized rate of eight percent (8.00%). . . . 

calculated and distributed on a monthly basis.”   

40. Income Fund’s PowerPoint overview of the investment similarly promised investors 

that they would receive “a reliable stream of monthly income” – specifically, an “8% Annual Interest 

Rate paid monthly.”   

41. In addition, Income Fund’s April 2016 FAQs stated that the fund “pays investors an 

annual dividend of 8%, payable monthly in equal installments.”   

42. However, contrary to representations in Income Fund’s PPM and marketing materials, 

Tralka, Braegelmann, Sullivan and Barr stopped paying investors promised monthly distributions 

while Income Fund was still raising money from investors. 

43. Tralka, Braegelmann, Sullivan and Barr paid only about half of the monthly 

distributions promised to investors.   

44. Tralka, Braegelmann, Sullivan, and Barr failed to collect interest on loans and instead 

allowed interest to accrue over the course of years while still selling Income Fund’s securities.   

45. Tralka, Braegelmann, Sullivan and Barr could not pay investors the return promised 

because Income Fund did not collect sufficient interest on its loan investments. 

46. Although Income Fund invested in eleven real estate loans, it did not collect the 

interest owed on the majority of these loans.   

47. Instead, the fund accrued interest on its books, and Income Fund’s bookkeeper 

maintained monthly spreadsheets showing the continued accrual of interest on the loans.   

48. As of March 2019, Income Fund had accrued $716,862.40 in unpaid interest 

receivable by Income Fund on loans totaling approximately $3.5 million. 

49. Tralka, Braegelmann and Sullivan had access to Income Funds’ books but never 

reviewed them.   

50. Tralka and Braegelmann admitted that they did not know if the loans were in default.  

51.  Barr also had access to the books and worked directly with Income Fund’s 

bookkeeper.   

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 7 of 22



 

COMPLAINT 7  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

52. Income Fund continued to raise investor funds through March 2019 with no change to 

these representations.   

53. Income Fund stopped paying returns entirely by March 2019. 

54. The representations that Income Fund would pay an 8% return were material to 

investors’ decisions to invest in Income Fund. 

55. When investors complained about not receiving their promised returns, Barr and 

Sullivan lulled them with various explanations.   

2. Misrepresentations Regarding Experienced Managers 

56. Income Fund’s PPM and marketing materials misrepresented to investors that its 

managers had substantial real estate experience.   

57. Income Fund’s PPM represented that Tralka “over the last twenty years has bought, 

held and sold multiple investment properties” and described Braegelmann as having a “30+ year 

career in real estate investing, commercial construction, land development, and private lending.” 

Similarly, Income Fund’s FAQs stated that Tralka and Braegelmann had a “combined total of more 

than 50 years of real estate investment experience.”   

58. Tralka and Braegelmann, however, had limited real estate experience.   

59. Tralka was involved in real estate investing for only a few years and previously 

worked for a semiconductor company.   

60. Tralka had never before invested in real estate loans on anyone else’s behalf before 

managing Income Fund.   

61. Braegelmann had owned a landscaping company and, as a side business, flipped 

houses prior to investing in real estate in the mid-1990s.   

62. Braegelmann did not start raising funds from real estate investors until 2010 or 2011.   

63. Similarly, Sullivan had little real estate investment experience before Income Fund.   

64. The representations that Income Fund’s managers had substantial real estate 

experience were material to investors’ decisions to invest in Income Fund.  

3. Good Steward and Barr’s failure to make investment decisions  

65. Income Fund’s PPM misrepresented that Good Steward – an SEC-registered 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 8 of 22



 

COMPLAINT 8  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

investment advisor in the relevant period that owed a fiduciary duty to its advisory clients – and its 

associated person and sole employee, Barr, would be responsible for making investment decisions.   

66. Specifically, the PPM stated that Good Steward, as Income Fund’s “Investment 

Manager,” “is responsible for investing the capital and resources of the Fund and monitoring such 

investments, as necessary, in order to achieve the Fund’s investment objective.”   

67. In reality, Tralka and Braegelmann primarily decided how Income Fund would invest. 

68. Barr instead served only as Income Fund’s administrator. 

69. Tralka, Braegelmann, Sullivan, Barr, and Good Steward allowed Tralka and 

Braegelmann to make the investment decisions for Income Fund instead of Good Steward and Barr. 

70. The representations that Good Steward and Barr would be responsible for making 

investment decisions were material to investors’ decisions to invest in Income Fund.  

B. The Fraudulent Income Strategies Offering 

71. In the spring and summer of 2017, Tralka, Braegelmann, Sullivan, and Barr decided to 

start the Income Strategies investment fund. Like Income Fund, Income Strategies claimed to invest 

in a diversified portfolio of real estate loans.   

72. Income Strategies raised funds pursuant to a $50 million Regulation A offering that 

was qualified on September 28, 2017.   

73. From March 2018 through February 2019, Income Strategies raised approximately 

$3,174,989.68 from about 96 investors (including investments from affiliates Income Fund and Good 

Steward).   

74. Income Strategies had a website from 2017 through at least 2021. 

75. Income Strategies used two registered broker-dealers to solicit potential investors.    

76. Income Strategies had an offering circular that was available to the public from 2017 

through the present. 

77. Income Strategies had a slide deck that contained an investor presentation and which 

was presented to potential investors in at least 2017 and 2018.  

78. Tralka, Braegelmann, Sullivan, Goodman and Barr served in the same roles for 

Income Strategies as they had for Income Fund.   

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 9 of 22



 

COMPLAINT 9  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

79. Tralka, Braegelmann, Sullivan, and Barr reviewed and approved the offering circular.   

80. Tralka, Braegelmann, Sullivan, and Barr drafted and approved the fund’s website 

content. 

81. Tralka, Braegelmann, and Sullivan prepared, reviewed and approved the investor 

presentation slide deck.   

1. False and misleading representations regarding reaching the 

investment minimum and escrow 

82. Income Strategies’ offering circular represented to potential investors that it would not 

use investor funds, and would hold them in escrow, until it raised $1 million from third party 

investors.   

83. Specifically, the offering circular represented that “[w]e will not start operations or 

draw down on investors’ funds and admit investors as members until we have raised at least 

$1,000,000 in this offering. Until the minimum threshold is met, investors’ funds will be revocable 

and will be held in an escrow account . . . . .” The offering circular further explained that “[w]e will 

not commence any significant investment operations until we have raised $1,000,000 from persons 

who are not affiliated with us or our Managing Member.” 

84. These representations, however, were false and misleading.   

85. First, almost 85% of the purported $1 million threshold was compromised of 

investment from affiliates Income Fund and Good Steward, and not from third party investors.    

86. Specifically, in February 2018, approximately $215,426.60 was transferred from 

Income Fund and $630,666.66 from Good Steward, for a total of $846,093, to Income Strategies.   

87. Tralka, Braegelmann, Sullivan, Good Steward and Barr were responsible for these 

transfers. 

88. Second, once Income Strategies received funds from individual investors, in February 

and March 2018, when it raised $281,000, Tralka, Braegelmann, Sullivan, and Barr started loaning 

these investor funds for property development without having reached $1 million raised from third 

party investors.   

89. Third, because Tralka, Braegelmann, Sullivan, and Barr immediately started using 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 10 of 22



 

COMPLAINT 10  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

investor funds, these initial investor funds were never held in escrow as promised. In fact, it was not 

until June 2018 that Income Strategies raised $1 million from third party investors.   

90. Tralka, Braegelmann and Barr had planned as early as December 2017 for Income 

Fund to invest in Income Strategies.   

91. Tralka understood that Income Strategies could only commence investment activity 

when the $1 million investment minimum was reached. 

92. In addition, Sullivan understood that without the investment from affiliate Income 

Fund, Income Strategies’ investor funds would remain in escrow “doing nothing” and no investments 

could be made.   

93. Tralka, Braegelmann, Sullivan, Barr, and Good Steward used money from Income 

Strategies affiliates Income Fund and Good Steward to purportedly reach the $1 million investment 

minimum necessary to begin investing. 

94. The representations that funds would be held in escrow until a minimum $1 million 

investment minimum were met were material to investors’ decisions to invest in Income Strategies.  

2. Failure to pay promised monthly distributions 

95. Similar to Income Fund, Income Strategies represented in its offering circular that it 

would invest “with the goal of attaining a portfolio of real estate assets that provide attractive and 

stable returns to our investors.”   

96. Furthermore, Income Strategies’ investor presentation slide deck stated that it targeted 

an 8% return and explicitly described “Distributions” as “[m]onthly cash distributions to investors to 

pay an annualized 8.0% preferred return.”   

97. Income Strategies continued to raise investor funds through approximately February 

2019 without any changes to these representations.   

98. Income Strategies accounting records show, however, that as early as August 2018, 

two loans in the nine-loan portfolio failed to make interest payments.   

99. Subsequently, in April 2020, Income Strategies’ independent auditor questioned why 

two loans had stopped accruing interest and three loans had stopped paying interest. Barr responded 

that two loans were in default, two loans had depleted their interest reserves, and the remaining loan 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 11 of 22



 

COMPLAINT 11  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

should be able to accrue interest in the future.   

100. As a result, the audit report for FY 2019 stated that the creditworthiness of the 

borrowers could not be substantiated and that the audit firm could provide no assurances on the 

principal value or the gains and losses recorded in the financial statements.   

101. As of March 2021, Income Strategies had $288,469.13 in distributions payable but had 

paid only approximately $163,321.08. 

102. Tralka, Braegelmann, Sullivan, and Barr failed to collect interest on loans and instead 

allowed interest to accrue over the course of years while still selling Income Strategies’ securities.   

103. Tralka and Braegelmann failed to review Income Strategies’ financials and did not 

know whether any of the loans were in default.   

104. Barr received emails from Income Strategies’ auditor and bookkeeper seeking 

information related to the missing interest payments, and acknowledged that interest payments were 

not being made.  

105. In 2020, two Income Strategies investors complained to Sullivan and Barr that they 

had not received their regular distributions and that the return on investment was below the promised 

8% return.   

106. In July 2020, Sullivan told one of these investors that they were trying to sell the 

portfolio to repay investors. On information and belief, no such sale has occurred.   

107. The representations that Income Strategies would pay an 8% annualized return were 

material to investors’ decisions to invest in Income Strategies. 

3. Misrepresentations regarding experienced managers 

108. Like Income Fund, Income Strategies’ offering circular, its investor presentation slide 

deck, and its website, misrepresented to potential investors that its managers had substantial real 

estate experience.  

109. The offering circular, the slide deck, and the website stated that Tralka “over the last 

twenty years has bought, held and sold multiple investment properties” and described Braegelmann 

as having a “30+ year career in real estate investing, commercial construction, land development, and 

private lending.”   

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 12 of 22



 

COMPLAINT 12  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

110. These representations regarding Tralka and Braegelmann’s real estate experience were 

false and misleading.   

111. The representations that Income Strategies’ managers had substantial real estate 

experience were material to investors’ decisions to invest in Income Strategies.  

4. Good Steward and Barr’s failure to make investment decisions 

112. As with Income Fund, Good Steward and Barr were supposed to make the investment 

decisions for Income Strategies.   

113. Income Strategies’ offering circular stated that its managing member “has delegated 

responsibility and authority for making investment decisions for the Company to Good Steward 

Capital Management, Inc., an Arizona Corporation and investment adviser registered with the 

Securities and Exchange Commission, or SEC (‘Investment Manager’).” The offering circular further 

represented that “[w]e depend on our Investment Manager [Good Steward] to select our investments 

and conduct our operations,” and that Good Steward, would “have the sole and absolute discretion to 

determine whether or not to make, acquire or sell a particular [l]oan.”   

114. These claims about Barr’s management of Income Strategies were repeated orally. An 

Income Strategies investor who repeatedly spoke to Barr believed that Barr managed the fund.   

115. In reality, Tralka and Braegelmann primarily decided how Income Strategies would 

invest. 

116. Barr instead served only as Income Strategies’ administrator. 

117. Tralka, Braegelmann, Sullivan, Barr, and Good Steward allowed Tralka and 

Braegelmann to make the investment decisions for Income Strategies instead of Good Steward and 

Barr. 

118. The representations that Good Steward and Barr would be responsible for making 

investment decisions were material to investors’ decisions to invest in Income Strategies.  

C. Defendants knew, or were reckless in not knowing, they were making 

materially misleading statements and engaging in deceptive conduct 

119. Tralka, Braegelmann, Sullivan, Good Steward and Barr knew, or were reckless or 

negligent in not knowing, that they made and disseminated materially false and misleading 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 13 of 22



 

COMPLAINT 13  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

statements to potential investors.   

120. Income Fund’s PPM, for which Tralka, Braegelmann, Sullivan, and Barr were 

responsible, and its marketing materials, for which Tralka, Braegelmann and Sullivan were 

responsible, falsely represented to potential investors that they would receive a reliable stream of 

monthly income at 8% annually, that the fund was managed by experienced real estate investors; and 

that Good Steward and Barr would make the investment decisions.   

121. Income Strategies’ offering circular and website, for which Tralka, Braegelmann, 

Sullivan, and Barr were responsible, and marketing materials, for which Tralka, Braegelmann and 

Sullivan were responsible, made similar misrepresentations and also misrepresented that Income 

Strategies would meet its $1 million threshold through third party investments.   

122. Tralka, Braegelmann, Sullivan, and Barr “made” the statements at issue in Income 

Fund’s PPM, Income Strategies’ offering circular, and Income Strategies’ website, because Tralka, 

Braegelmann, Sullivan, and Barr drafted, reviewed, and approved Income Fund’s PPM, Income 

Strategies’ offering circular, and Income Strategies’ website. 

123. Tralka, Braegelmann, and Sullivan “made” the statements at issue in Income Funds’ 

and Income Strategies’ marketing materials because they drafted, reviewed, and approved the 

marketing materials for both funds. 

124. In addition, Tralka, Braegelmann, Sullivan, and Barr engaged in fraudulent and 

deceptive practices and courses of business by failing to collect interest on loans and instead allowing 

interest to accrue over the course of years while still selling Income Fund and Income Strategies’ 

securities.   

125. Barr and Sullivan furthered this deception when they made lulling statements to 

Income Fund investors regarding their returns.   

126. Tralka, Braegelmann, Sullivan, and Barr and Good Steward engaged in deceptive 

practices by allowing Tralka and Braegelmann to make the investment decisions for the fund instead 

of Good Steward and Barr.   

127. Tralka, Braegelmann, Sullivan, and Barr and Good Steward engaged in a scheme to 

use money from affiliates Income Fund and Good Steward to purportedly reach the $1 million 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 14 of 22



 

COMPLAINT 14  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

threshold it needed to start investing; furthermore, based on this false threshold, they immediately 

started using investor funds for loans and failed to keep these funds in escrow as promised.   

128. The misrepresentations and deceptive conduct were in the offer or sale and “in 

connection with” the purchase or sale because the Funds’ securities continued to be offered, 

purchased and sold after the misrepresentations were made and the deceptive conduct occurred. 

129. The false and misleading statements and the deceptive practices are material.  

Reasonable investors would have considered these representations and deceptive acts to be important 

to their investment decisions.   

130. Tralka, Braegelmann, Sullivan, and Barr acted with scienter. Tralka, Braegelmann, 

Sullivan, and Barr all prepared and reviewed the offering documents and had access to the Funds’ 

accounting records, and Tralka, Braegelmann, and Sullivan prepared and reviewed both Funds’ 

marketing materials.   

131. Tralka, Braegelmann, Sullivan, and Barr knew, or were reckless, or, alternatively, 

negligent, in not knowing, that multiple material misrepresentations were made to potential investors 

and that investor funds raised by Income Strategies were used before the $1 million threshold was 

properly met.  

132. Good Steward acted through Barr. Therefore, Barr’s knowledge, recklessness, and/or 

negligence may be imputed to Good Steward. 

D. The offer and sale of investments in Income Funds was an 

unregistered offer and sale of securities 

133. Income Fund’s offer and sale of securities was not registered with the SEC and the 

securities were offered and sold through interstate commerce.   

134. There was no registration statement in effect or filed with the SEC with respect to the 

offering of Income Fund. 

135. No exemption applies to Income Fund’s offer and sale of securities.   

136. Income Fund engaged in general solicitation. 

137. Income Fund sold membership interests to investors residing throughout the United 

States. 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 15 of 22



 

COMPLAINT 15  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

138. In addition, Income Fund failed to take reasonable steps to verify whether investors 

actually qualified as accredited investors.   

139. Tralka, Braegelmann, and Sullivan sold Income Fund securities because they 

controlled Income Fund’s managing member, drafted the offering and marketing materials and 

approved the offering.   

140. Sullivan and Goodman communicated with potential investors in Income Fund. 

141. Most of the investors with whom Sullivan and Goodman communicated did not have 

pre-existing substantive relationships with them.   

142. Sullivan and Goodman described, both orally and in writing, Income Fund’s business 

and the investment to potential investors.  

143. Goodman solicited investors and advertised Income Fund by promoting the fund on 

his broadcast radio show and in one-on-one communications with investors.   

144. Goodman provided potential investors with specific information directly related to 

Income Fund, including, for example, that they could expect an 8% return on their investment.   

145. Goodman also provided potential investors with Sullivan’s phone number.   

146. Sullivan would then give the potential investors the same information provided by 

Goodman, as well as additional detail if they asked. 

FIRST CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 

(Against Defendants Tralka, Braegelmann, Sullivan, Good Steward, and Barr) 

147. The SEC realleges and incorporates by reference paragraphs 1 through 146 above. 

148. As set forth above, in connection with the purchase or sale of securities, Defendants 

Tralka, Braegelmann, Sullivan, Good Steward and Barr engaged in a scheme to defraud and made 

material misrepresentations to investors with scienter.  These included statements to potential 

investors regarding: (1) the payment of reliable monthly distributions at an 8% annual rate; (2) Tralka 

and Braegelmann’s purported real estate investing experience in excess of fifty years; (3) that SEC-

registered investment adviser Good Steward would make the funds’ investment decisions, and (4) 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 16 of 22



 

COMPLAINT 16  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

that Income Strategies would keep investor funds in escrow until meeting its $1 million investment 

threshold with investments from third parties. These also included fraudulent and deceptive practices 

and courses of business such as (1) failing to collect interest on loans and instead allowing interest to 

accrue over the course of years while still selling Income Fund and Income Strategies’ securities, and 

making lulling statements to Income Fund investors regarding their returns; (2) allowing Tralka and 

Braegelmann to make the investment decisions for Income Fund and Income Strategies instead of 

Good Steward and Barr; (3) using money from Income Fund and Good Steward to purportedly reach 

the $1 million threshold for Income Strategies to start investing, and based on this false threshold, 

immediately starting to use investor funds for loans and failed to keep these funds in escrow as 

promised.   

149. By engaging in the conduct described above, Defendants Tralka, Braegelmann, 

Sullivan, Good Steward and Barr, and each of them, directly or indirectly, in connection with the 

purchase or sale of a security, and by the use of means or instrumentalities of interstate commerce, of 

the mails, or of the facilities of a national securities exchange:  (a) employed devices, schemes, or 

artifices to defraud; (b) made untrue statements of a material fact or omitted to state a material fact 

necessary in order to make the statements made, in the light of the circumstances under which they 

were made, not misleading; or (c) engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons. 

150. By engaging in the conduct described above, Defendants Tralka, Braegelmann, 

Sullivan, Good Steward and each violated, and unless restrained and enjoined will continue to 

violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5(b) thereunder, 17 

C.F.R. § 240.10b-5(b). 

SECOND CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act 

(Against Defendants Tralka, Braegelmann, Sullivan, Good Steward, and Barr) 

151. The SEC realleges and incorporates by reference paragraphs 1 through 146 above. 

152. As set forth above, in connection with the purchase or sale of securities, Defendants 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 17 of 22



 

COMPLAINT 17  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

Tralka, Braegelmann, Sullivan, Good Steward and Barr engaged in a scheme to defraud and made 

material misrepresentations to investors with scienter or negligently.  These included statements to 

potential investors regarding: (1) the payment of reliable monthly distributions at an 8% annual rate; 

(2) Tralka and Braegelmann’s purported real estate investing experience in excess of fifty years; (3) 

that SEC-registered investment adviser Good Steward would make the funds’ investment decisions, 

and (4) that Income Strategies would keep investor funds in escrow until meeting its $1 million 

investment threshold with investments from third parties. These also included fraudulent and 

deceptive practices and courses of business such as (1) failing to collect interest on loans and instead 

allowing interest to accrue over the course of years while still selling Income Fund and Income 

Strategies’ securities, and making lulling statements to Income Fund investors regarding their returns; 

(2) allowing Tralka and Braegelmann to make the investment decisions for Income Fund and Income 

Strategies instead of Good Steward and Barr; (3) using money from Income Fund and Good Steward 

to purportedly reach the $1 million threshold for Income Strategies to start investing, and based on 

this false threshold, immediately starting to use investor funds for loans and failed to keep these funds 

in escrow as promised.   

153. By engaging in the conduct described above, Defendants Tralka, Braegelmann, 

Sullivan, Good Steward and Barr, directly or indirectly, 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 employed devices, schemes, or artifices to defraud or engaged in transactions, practices, or 

courses of business which operated or would operate as a fraud or deceit upon the purchaser. 

154. By engaging in the conduct described above, Defendants Tralka, Braegelmann, 

Sullivan, Good Steward and Barr violated, and unless restrained and enjoined will continue to violate, 

Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77q(a)(1) & 77q(a)(3). 

THIRD CLAIM FOR RELIEF 

Unregistered Offer and Sale of Securities 

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

(Against Defendants Tralka, Braegelmann, Sullivan, and Goodman) 

155. The SEC realleges and incorporates by reference paragraphs 1 through 146 above. 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 18 of 22



 

COMPLAINT 18  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

156. Defendants Tralka, Braegelmann, Sullivan, and Goodman directly or indirectly 

offered and sold Income Fund’s securities in offerings that are not registered with the SEC and that 

are not subject to a valid exemption to registration.  

157. By engaging in the conduct described above, Defendants Tralka, Braegelmann, 

Sullivan, and Goodman, directly or indirectly, singly and in concert with others, has made use of the 

means or instruments of transportation or communication in interstate commerce, or of the mails, to 

offer to sell or to sell securities, or carried or caused to be carried through the mails or in interstate 

commerce, by means or instruments of transportation, securities for the purpose of sale or for 

delivery after sale, when no registration statement had been filed or was in effect as to such securities, 

and when no exemption from registration was applicable. 

158. By engaging in the conduct described above, Defendants Tralka, Braegelmann, 

Sullivan, and Goodman each violated, and unless restrained and enjoined, will continue to violate, 

Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c). 

FOURTH CLAIM FOR RELIEF 

Unjust Enrichment 

(Against Relief Defendants Income Fund and Income Strategies) 

159. The SEC realleges and incorporates by reference paragraphs 1 through 146 above. 

160. Relief defendants Income Fund and Income Strategies received proceeds from 

Defendants’ conduct, funds over which they have no legitimate claim. 

161. Relief defendants Income Fund and Income Strategies obtained the ill-gotten gains 

described above as part of the securities law violations alleged above, under circumstances in which 

it is not just, equitable, or conscionable for them to retain the funds. 

162. By engaging in the foregoing conduct, Income Fund and Income Strategies have been 

unjustly enriched and must disgorge their ill-gotten gains. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court: 

I. 

Issue findings of fact and conclusions of law that Defendants committed the alleged 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 19 of 22



 

COMPLAINT 19  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

violations. 

II. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

permanently enjoining Defendants Tralka, Braegelmann, Sullivan and their officers, agents, servants, 

employees, and attorneys, and those persons in active concert or participation with any of them, who 

receive actual notice of the judgment by personal service or otherwise, and each of them, from 

violating Sections 5(a), 5(c), and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), 77e(c), and 

77q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5]; enjoining Defendant Goodman, his officers, agents, servants, employees, and 

attorneys, and those persons in active concert or participation with any of them, who receive actual 

notice of the judgment by personal service or otherwise, and each of them, from violating Sections 

5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)]; and enjoying Defendants Good 

Steward and Barr and their officers, agents, servants, employees and attorneys, and those persons in 

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

personal service or otherwise, and each of them, from violating Section 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

III. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

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

Defendants Tralka, Braegelmann, Sullivan, Goodman, Barr and their officers, agents, servants, 

employees and attorneys, and those persons in active concert or participation with any of them, who 

receive actual notice of the judgment by personal service or otherwise, from, directly or indirectly, 

including, but not limited to, through any entity owned or controlled by each, participating in the 

issuance, purchase, offer, or sale of any security in an unregistered offering by an issuer, provided, 

however, that such injunction shall not prevent each from purchasing or selling securities for his own 

personal account. 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 20 of 22



 

COMPLAINT 20  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

IV.  

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and/or Section 20(e) of the 

Securities Act [15 U.S.C. § 77t(e)], prohibiting Defendants Tralka, Braegelmann, Sullivan, and Barr 

from acting as an officer or director of any issuer that has a class of securities registered pursuant to 

Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to Section 

15(d) of the Exchange Act [15 U.S.C. § 78o(d)]. 

V. 

Order Defendants to disgorge all funds received from their illegal conduct, together with 

prejudgment interest thereon, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5) and 21(d)(7) [15 

U.S.C. §§ 78u(d)(3), 78u(d)(5) and 78u(d)(7)]. 

VI. 

Order Relief Defendants to disgorge all ill-gotten gains or unjust enrichment derived from the 

activities set forth in this Complaint, together with prejudgment interest thereon. 

VII. 

Order Defendants to pay civil penalties under Section 20(d) of the Securities Act [15 U.S.C. § 

77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. 

VII. 

Retain jurisdiction of this action in accordance with the principles of equity and the Federal 

Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that 

may be entered, or to entertain any suitable application or motion for additional relief within the 

jurisdiction of this Court. 

/// 

/// 

/// 

/// 

/// 

/// 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 21 of 22



 

COMPLAINT 21  
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 
 

VII. 

Grant such other and further relief as this Court may determine to be just and necessary. 

 

Dated: September 27, 2023   Respectfully submitted, 

 
/s/ Daniel O. Blau      
Daniel O. Blau 
Jacob Regenstreif 
Daniel Lim 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 

Case 5:23-cv-04958   Document 1   Filed 09/27/23   Page 22 of 22


	A. The Fraudulent Income Fund Offering
	1. Failure to pay promised monthly distributions
	2. Misrepresentations Regarding Experienced Managers
	3. Good Steward and Barr’s failure to make investment decisions

	B. The Fraudulent Income Strategies Offering
	1.  False and misleading representations regarding reaching the investment minimum and escrow
	2. Failure to pay promised monthly distributions
	3. Misrepresentations regarding experienced managers
	4. Good Steward and Barr’s failure to make investment decisions

	C. Defendants knew, or were reckless in not knowing, they were making materially misleading statements and engaging in deceptive conduct
	D. The offer and sale of investments in Income Funds was an unregistered offer and sale of securities