1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

________________________________________________

SECURITIES AND EXCHANGE COMMISSION, §

§

Plaintiff, §

§

vs. §

§ Civil Action No.: 5:20-cv-00598

PAUL R. MONTGOMERY, JR., MICHAEL D. §

FISHER, AND JAMES H. WILLINGHAM, JR., §

§ 

Defendants. §

________________________________________________§

COMPLAINT

Plaintiff Securities and Exchange Commission (“Commission”) files this Complaint 

against Defendants Paul R. Montgomery, Jr. (“Montgomery”), Michael D. Fisher (“Fisher”), and 

James H. Willingham, Jr. (“Willingham”) (collectively “Defendants”), and alleges as follows:

I.

SUMMARY

1. From approximately June 2016 through early 2017, Montgomery, Fisher, and 

Willingham raised at least $2.7 million from approximately 15 investors by offering and selling 

securities, in the form of joint venture interests in two oil and gas projects. Defendants claimed 

that they would drill new oil and gas wells and rework existing wells in South Texas. They lured 

investors with, among other things, promises of 32% investment returns, clear limitations on how 

they would use investor funds, and representations about Montgomery’s (the would-be operator)

expertise and qualifications in the oil and gas exploration industry. 

2. But Defendants never drilled or reworked a single well for these projects. 

Defendants knew—but they never disclosed—that title to the mineral rights for most of the

contemplated wells was clouded and subject to a court-ordered injunction that effectively 
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precluded the oil and gas projects from moving forward. Contrary to how Defendants disclosed 

they would use investor proceeds, Defendants spent a significant portion of the investor funds on 

commissions to salesmen dedicated to soliciting investors. The promised investment returns 

were, at least, grossly inflated, and the claims about Montgomery’s expertise and qualifications

were lies. In the end, investors suffered a complete loss of their funds. 

3. By committing the acts alleged in this Complaint, Defendants directly or

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

acts, transactions, practices, and courses of business that violate the antifraud provisions of the 

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

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

[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. Further, Montgomery 

and Fisher also aided and abetted Willingham’s violations of these antifraud provisions. Finally, 

Defendants also violated Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) & (c)] 

by offering to sell and/or selling unregistered securities.

4. In the interest of protecting the public from any further fraudulent activity and 

harm, the Commission brings this action against Defendants seeking: (a) permanent injunctive 

relief; (b) disgorgement of ill-gotten gains; (c) accrued prejudgment interest on those ill-gotten 

gains; (d) civil penalties; and (e) all other equitable and ancillary relief to which the Court 

determines the Commission is entitled.

II.

JURISDICTION AND VENUE

5. This case involves the offer and sale of joint venture interests in oil and gas 

projects to investors. These joint venture interests are investment contracts, which are securities 

under Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b] and Section 3(a)(10) of the 
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Exchange Act [15 U.S.C. § 78c]. Thus, the Court has jurisdiction over this action under Sections

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

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

6. Defendants directly and/or indirectly made use of the mails or of the means and 

instrumentalities of interstate commerce in connection with the transactions, acts, practices, and 

courses of business described in this Complaint.

7. Venue is proper because a substantial part of the events or omissions giving rise 

to the claims occurred within the Western District of Texas, San Antonio Division, including but 

not limited to Defendants’ sales of securities, misrepresentations, acts, practices, transactions, 

and courses of business. Further, Montgomery and Fisher reside within this Division.

III.

DEFENDANTS

1. Defendant Paul Russell Montgomery, Jr., age 44, resides in Bulverde, Texas.

2. Defendant Michael David Fisher, age 40, resides in Canyon Lake, Texas.

3. Defendant James Hurst Willingham, Jr., age 72, resides in Cedar Park, Texas.

IV.

RELATED ENTITIES

8. Energon3 was a Texas corporation and a purported oil and gas operator owned by 

Montgomery. Energon3 was involuntarily dissolved in September 2016 for non-payment of 

franchise taxes, but Montgomery continued to operate the business under that name. Energon3 

purchased the oil and gas leases relevant to this lawsuit in late 2015, and then was listed in 

offering documents as the operator for both the Navarro and Seguin Projects (defined below).

9. Oil Lease Joint Venture LLC (“OLJV”) was an unregistered entity; it was neither 

a joint venture, nor a limited liability company. Defendants and their sales representatives used 

the names OLJV and later “Exxpand Energy” (defined below) to market the two oil and gas 
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projects. 

10. Exxpand Energy, LLC (“Exxpand Energy”) was a Texas limited liability 

company. Prior to Exxpand Energy’s formation, Defendants and their sales representatives used 

the names OLJV and later “Exxpand Energy” to market the two oil and gas projects. 

Willingham served as Exxpand Energy’s president. In January 2017, Willingham took steps to 

officially form Exxpand Energy, LLC as a Texas limited liability corporation.

11. Navarro Phase I, LLC was a Texas limited liability company founded by 

Willingham, who served as the entity’s president. Navarro Phase I, LLC issued the investments

in the Navarro Project (defined below).

12. Seguin Development Phase II, LLC was a Texas limited liability company 

founded by Willingham, who served as the entity’s president. Seguin Development Phase II, 

LLC issued the investments in the Seguin Project (defined below).

V.

STATEMENT OF FACTS

13. From approximately June 2016 through early 2017, Montgomery, Fisher, and 

Willingham raised at least $2.7 million from approximately 15 investors in a fraudulent scheme 

involving the offer and sale of securities, in the form of joint venture interests in two oil and gas 

ventures: the Navarro Phase I project (the “ Navarro Project”) and the Seguin Development 

Phase II project (the “Seguin Project.”) Over the course of the scheme, and as further set forth 

below, Defendants misrepresented and/or omitted numerous material facts to investors that were 

fundamental to the nature and risks of the investment offerings.

A. The Offerings

1. The Navarro Project

14. In the fall of 2015, Willingham and a former business partner decided to delve 
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into the oil and gas investment space. They chose to use Energon3—Montgomery’s Texaslicensed oil and gas operator—to acquire leases in Wilson County, Texas. Willingham and his 

partner also decided to hire Energon3 to drill four new wells and rework four existing wells 

located on a group of six leases (the “Scull and Grun Leases”) for the Navarro Project, which the 

group planned as the first of multiple joint venture projects. 

15. In April 2016, Willingham, his former partner, Montgomery, and Fisher agreed to 

hire a salesman to sell units in the Navarro Project using a commission-based compensation 

structure. In June 2016, the salesman and his sales representatives began soliciting investors for

the Navarro Project. During the course of the offering, the sales representatives, with 

Defendants’ knowledge, began using OLJV and, later, “Exxpand Energy” in the marketing 

materials. Marketing materials identified Willingham as Exxpand Energy’s president. To solicit 

investors, the sales representatives used, among other things, pop-up advertising on websites

followed by emails that attached promotional videos. The sales representatives initiated contact 

with individuals that expressed interest in the oil and gas projects, and provided them with the 

offering materials. After potential investors were identified, Montgomery and Fisher actively 

engaged in soliciting investments, each frequently participating in calls with sales representatives 

and potential investors. Willingham, Montgomery, and Fisher also took investors and potential 

investors on tours of the Scull and Grun Leases. 

16. Between June 2016 and March 2017, Defendants raised approximately $2.4 

million from 15 investors for the Navarro Project. Some of the investors were not experienced 

in oil and gas drilling or investing, and, at the time of their investments, they lacked the 

experience and knowledge necessary to manage an oil and gas joint venture. Rather, the 

investors depended entirely on Defendants and their purported expertise and experience in order 
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to earn profits from the Navarro Project.

2. Navarro Project Offering Materials

17. Willingham and his former partner created an offering brochure to solicit 

investors for the Navarro Project. The information in the marketing brochure—which 

Willingham obtained from Fisher—related primarily to oil and gas leases that Montgomery and 

Fisher had previously tried to market. The offering brochure contained, among other things, a

project summary, a description of the well locations, a use-of-proceeds chart, a description of 

Energon3’s experience and “proven success” as an operator, and biographies of Montgomery 

and others. Montgomery and Fisher reviewed and approved the marketing brochure prior to its 

dissemination to investors, and Willingham took no steps to verify that the information provided 

by Fisher was accurate. 

18. Willingham and his former partner used the information contained in the Navarro 

brochure to create the Navarro private placement memorandum (“Navarro PPM”), which 

investors and potential investors received prior to investing. According to the Navarro PPM, 

Navarro Phase I, LLC was seeking to raise $2.52 million by offering 21 joint venture units for 

$120,000 a unit. The Navarro PPM stated that the joint venture would enter into a turnkey 

contract and operating agreements with Navarro Phase I, LLC, but no such agreements were ever 

executed. The Navarro PPM also revealed that the investors were to be virtually powerless. It

specified that joint venture interest holders “will have no substantial authority over or 

involvement in operations.” 

19. Each Navarro Project investor received a suitability questionnaire and 

subscription agreement that included provisions specifying that Texas law governed the 

agreement and that investor subscriptions may be accepted or rejected by Navarro Phase I, LLC 

in its absolute discretion. 
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20. Navarro Phase I, LLC claimed that sales of the units were exempt from 

registration pursuant to the Commission’s Rule 506(c) under the Securities Act [17 CFR § 

230.506], which requires, among other things, that investors meet certain accreditation 

requirements. However, Defendants and their sales representatives relied only on investor 

representations in subscription agreements to determine whether the investors were accredited. 

They took no other reasonable steps to verify investors’ accredited status. Not surprisingly, 

some of the Navarro Project investors were unaccredited.

3. The Seguin Project

21. In early 2017, Defendants and their sales representatives began soliciting 

investors for the second phase of their oil and gas investment scheme—the Seguin Project. 

According to the Seguin Project private placement memorandum (“Seguin PPM”), Seguin 

Development Phase II, LLC, the manager of the Seguin Project, was seeking to raise $3,360,000 

by offering 24 joint venture interest units for $140,000 a unit. The Seguin Project’s stated 

objective was to rework six existing wells and drill four new wells on the same Scull and Grun 

leases that were part of the Navarro Project. 

22. The Seguin PPM, over which Willingham had ultimate authority, was very 

similar to the Navarro PPM, including specific representations about how investor proceeds 

would be used. The Seguin PPM also included statements about the joint venture entering into a 

turnkey contract and operating agreements, but again no such agreements were ever executed. 

Like the Navarro PPM, the Seguin PPM also revealed that the investors were to be virtually 

powerless. It specified that joint venture interest holders “will have no substantial authority over 

or involvement in operations.” 

23. Of the $3,360,000 they sought to raise, Defendants only raised $280,000 from a 

single investor who originally invested in the Navarro project and later decided to invest money 
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into the Seguin project based on misrepresentations about the success of the Navarro project.

B. Scull Lease Litigation 

24. Prior to soliciting investors in either project, Defendants were aware that the 

mineral interests on many of the contemplated oil and gas wells included in the Navarro and 

Seguin projects were clouded by ongoing litigation between, among others, Montgomery’s

company (Energon3) and the land owners: Scull Ranch, Ltd., et al. v. Metco Oil Corp., et al., 

Cause No. 15-11-0690-CVW in the 218th District Court of Wilson County, Texas (the “Scull 

Lease Litigation”). On November 23, 2015—just days after Energon3 acquired the Scull and 

Grun Leases—the mineral rights lessor obtained a temporary restraining order against Energon3, 

Montgomery, “those acting in concert with” Energon3, and others, enjoining them from 

exploring, producing, or performing workover operations on four of the six leases in the Navarro 

Project.1 

25. Prior to acquiring the Scull leases for the Navarro and Seguin Projects, 

Montgomery was aware of title problems that formed the basis of the Scull Lease Litigation and 

the injunction. Fisher and Willingham learned of the title issues before they received funds from 

investors in the Navarro Project. Despite this knowledge by Defendants, no one told any 

investors or prospective investors about the lease injunctions or title issues until April 2017. 

Instead, Montgomery and Willingham decided that the eight wells would be drilled and 

reworked on only the Grun lease, a limitation that was not disclosed to investors or prospective 

investors. Ultimately, Montgomery failed to drill or rework any wells on any of the project 

leases. 

 1 Prior to the expiration of the temporary restraining order, Energon3 agreed to a modified injunction that prohibited 

drilling of new wells on the affected leases and required notice to the landholders of any workover operations on 

those leases. That agreement remained in effect until April 16, 2018, when an agreed final judgment was entered 

against Energon3, Montgomery, “those acting in concert with” Energon3, and others releasing the leases and 

awarding money to the property owners for damages to the wells, leases, and surface property.
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C. Material False and Misleading Statements and Omissions

26. Defendants deceived investors about key aspects of the projects, including 

ownership of the leases, the use of investor proceeds, Montgomery’s credentials, investment 

returns, and various other elements of the projects and the offerings.

1. Ownership of the Scull and Grun Leases

27. The Navarro and Seguin PPMs represented that investor funds would be used to 

purchase the Scull and Grun Leases and that the managers of the Navarro and Seguin Projects

would not commit investor funds to the project unless the company “was satisfied that it would 

obtain title to the Leases sufficient to withstand any adverse claim of ownership that might or 

could be asserted.” 

28. Defendants knew that this representation was false. Energon3 never transferred 

the leases to the Navarro and Seguin Projects or their managers. As a result, neither the Navarro 

and Seguin Projects nor their managers ever actually owned the project leases. Moreover, 

Energon3—much less the Navarro and Seguin Projects—never had clear title to four of the six 

leases because of the Scull Lease Litigation. Thus, according to the representations in the 

Navarro and Seguin PPMs, Defendants never should have spent any of the investor funds until 

they resolved the critical impediment to the oil and gas exploration objective.

2. Use of Proceeds

29. The Navarro PPM specifically itemized the project’s estimated costs and use of 

proceeds, which are summarized as follows: 
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Navarro Project (PPM Disclosures) PPM Estimated

Costs Disclosure

Percentage 

Purchase of Leases & Existing Wells $151,200 6%

Drilling, Completion, Geology, Surveying, Engineering & 

Site Preparation $1,990,800 79%

Management & Administrative Fee $252,000 10%

Legal, Accounting, Printing & Organizational Costs $126,000 5%

Total $2,520,000

30. However, instead of spending 85% of investor funds on oil-and-gas-related 

expenses, Defendants spent no more than $150,000 of the investors’ $2.4 million on the wells 

assigned to the Navarro Project. Instead, Willingham distributed the investor funds as follows: 

• $793,000 (or 33%) in commissions to the sales representatives;

• $936,000 (or 39%) to Montgomery/Energon3;

• $221,000 (or 9%) in payments to or on behalf of Willingham; and

• $450,000 (or 19%) as a return of investment funds to a single investor.

31. The use-of-proceeds sections in the Navarro PPM did not allocate the use of any

investor funds to pay sales commissions. Yet, 33% of the proceeds were used for that 

undisclosed purpose. Moreover, the majority of investor funds that Willingham sent to 

Montgomery and Energon3 were not used for the purposes disclosed in the Navarro PPM. Of 

the $936,000 that Willingham sent to Montgomery for work on the leases, Montgomery in turn 

paid Fisher’s company approximately 38% of those funds, presumably for Fisher’s work on the 

offering documents, marketing materials and videos, and sales efforts. 

32. Similarly, Defendants represented that $2.86 million, or 84%, of the investor 

funds raised for the Seguin Project would be used for oil-and-gas-related costs. Willingham 

never used any of the investor funds for such expenses. Instead, Willingham spent the $280,000 

that was raised as follows:
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• $25,000 (or 9%) to a sales agent;

• $165,000 (59%) to Montgomery/Energon3; and

• $90,000 (32%) to Willingham.

3. Montgomery’s Credentials

33. Based on information supplied by Montgomery and Fisher, the Navarro PPM, 

marketing materials, videos, and oral representations by Willingham, Fisher, and others touted 

the qualifications, experience, and expertise of Montgomery and Energon3, including crediting

Montgomery with education and expertise that he did not receive or possess. The Navarro PPM, 

which was reviewed and approved by Willingham, stated that Montgomery had a Bachelor of 

Science in Geology from Texas A&M University. Similarly, other marketing materials 

consistently stated that Montgomery had a degree from Texas A&M University, as well as one 

from the University of Texas. However, Montgomery never attended either university. In fact, 

Montgomery only took two college courses at a community college and has no qualifications as 

a geologist or geophysicist.

34. The Navarro offering brochure touts that Energon3 has “extensive experience in 

both drilling new wells and reworking existing wells” and “their new-drill wells have an average 

IP of 50 BOPD,” suggesting a strong production rate. The brochure also touts that Energon3 

holds “the field record for well production rates.” These statements are false, which Defendants 

knew or were severely reckless in not knowing. According to data available from the Texas 

Railroad Commission, Energon3 has a poor production history.

35. The Navarro marketing brochure also stated that the “Energon3 team has decades 

of experience in secondary well production in both water and gas injection techniques.” This 

statement is also false. According to Energon3’s chief drilling engineer, Energon3 had no
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experience with injection techniques and Montgomery had little hands-on experience with oil 

and gas wells and leases. Further, both Fisher and Montgomery were aware that Montgomery 

and Energon3 had little or no success in two recent prior offerings—one of which involved the 

exact same leases later used in the Navarro and Seguin Projects. 

4. Baseless Investment Returns

36. Defendants’ sales representatives touted wholly unsupported projected returns on 

the Navarro Project, sometimes promising an annual return of 32%—a number Montgomery and 

Fisher baselessly concocted. The sales representatives also sent potential investors videos 

promoting the Navarro Project, at least one of which stated the investment was “low-risk” and

“[t]he only Realistic way to make a Guaranteed 32.278% on a Single ‘Asset Backed’

Investment.” Prior to investing, several investors also received emails describing the 32% return 

as a “worse case” scenario. Given Montgomery’s poor performance in two of his offerings 

immediately preceding the Navarro Project, there was no reasonable basis on which to project 

32% annual returns. Furthermore, the Scull Lease Litigation proved to be an additional hurdle 

for Energon3 to produce any returns, let alone returns of 32% (or higher). 

5. Other Misrepresentations and Deceptions

37. Defendants, directly and through their sales representatives, used various other 

misrepresentations and deceptions to lure investors into the Navarro and Seguin Projects. 

a. Tours

38. Several investors visited Texas, where Defendants escorted them on tours of the 

Scull and Grun Leases. Willingham and Montgomery showed at least one investor the leases 

and a purported Navarro well, without disclosing the lease title issues. Shortly after the tour, the 

investor purchased a unit in the Navarro Project and another existing investor made an additional 

investment after his tour. 
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b. Promotional Videos

39. The sales representatives also sent potential investors links to various videos that 

were rife with misleading information and created a false impression about the Navarro and 

Seguin Projects. In 2016, Fisher, with Willingham’s and Montgomery’s participation and 

assistance, created various promotional videos. Fisher and the sales representatives edited the 

video and then sent it to investors. Fisher filmed the video footage, which featured, among other 

things, Montgomery discussing the projects and the Scull and Grun Leases. Fisher narrated 

several of the short videos. The videos also included shots of what purportedly were wells on the 

Navarro and Seguin Project leases that were pumping oil and of alleged investors visiting the 

wells. 

40. In truth, wells on the pertinent leases had little production. One video showed a 

potential investor visiting the Navarro project, and speaking with Montgomery, Fisher, and 

Willingham about the wells. Sales representatives told several investors that this potential 

investor invested in two units the day he visited—in fact, he never purchased any units. 

41. Another video sent to potential investors and posted on Exxpand Energy’s 

website and on YouTube contained numerous misrepresentations and deceptions. This 12-

minute promotional video was partially filmed and edited by Fisher, and Montgomery and 

Willingham both appeared in it. The video showed, among other things, Defendants, individuals 

labeled as potential investors, and several Exxpand Energy employees touring an oil field. The 

video featured several interviews, including one of an individual described as having “invested 

over $150K before coming on the trip”—in reality, this person was a sales representative for the 

Navarro and Seguin Projects, who had not invested. Another individual interviewed in the video 

was described as a “professional investor,” but he was actually Defendants’ IT professional, who

never invested. Other individuals labeled as “potential investors” in this video were Fisher’s 
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sister-in-law and her parents, who also never invested in the projects. 

42. The sales representatives sent a third professionally narrated video to potential 

investors. The video was also posted on Exxpand Energy’s website. This video touted projected 

returns and the safety of an investment in Exxpand Energy projects. Although Defendants did 

not create or participate in this video, it was based at least in part on information provided by 

Defendants. For example, Montgomery and Fisher were the source for claims in the video that 

investing in the Navarro and Seguin Projects would yield 32% returns. In reality, the Navarro 

Project was a disaster—there was no reasonable basis to project 32% returns. Defendants took 

the proceeds and failed to drill any new wells or perform any significant work on the existing 

wells. 

D. Registration with the Commission

43. Neither the Navarro Project nor the Seguin Project or their respective securities 

are or were ever registered with the Commission.

VI.

CLAIMS FOR RELIEF

FIRST CLAIM FOR RELIEF

Violations of 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]

Against All Defendants

44. Plaintiff re-alleges and incorporates paragraphs 1 through 43 of this Complaint by 

reference as if set forth verbatim in this Claim.

45. By engaging in the acts and conduct alleged herein, Defendants, directly or 

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

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

facility of any national securities exchange, knowingly or severely recklessly:
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a. employed devices, schemes, and artifices to defraud; and/or

b. made untrue statements of material facts, or omitted to state material facts 

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

under which they were made, not misleading; and/or

c. engaged in acts, practices, and courses of business which operated as a fraud 

or deceit upon purchasers, prospective purchasers, and other persons.

46. By reason of the foregoing, Defendants 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 thereunder [17 C.F.R. §§ 240.10b-5].

SECOND CLAIM FOR RELIEF

Aiding and Abetting Violations of the Antifraud Provisions of 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)]

Against Montgomery and Fisher

47. Plaintiff re-alleges and incorporates paragraphs 1 through 43 of this Complaint by 

reference as if set forth verbatim in this Claim.

48. By engaging in the acts and conduct alleged herein, Montgomery and Fisher aided 

and abetted Willingham’s violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) 

thereunder by knowingly or recklessly providing substantial assistance to Willingham who, 

directly or indirectly, singly or in concert with others, in the purchase and sale of securities, by 

use of the means or instrumentalities of interstate commerce or by use of the mails made untrue 

statements of material facts, or omitted to state material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading.

49. By reason of the foregoing, Montgomery and Fisher, directly or indirectly, aided 

and abetted, and unless restrained and enjoined will continue to aid and abet, violations of 
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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)]. 

THIRD CLAIM FOR RELIEF

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

Against All Defendants

50. Plaintiff re-alleges and incorporates paragraphs 1 through 43 of this Complaint by 

reference as if set forth verbatim in this Claim.

51. By engaging in the acts and conduct alleged herein, Defendants, directly or 

indirectly, singly or in concert with others, in the offer and sale of securities, by use of the means 

or instruments of transportation or communication in interstate commerce or by the use of the 

mails, have:

a. knowingly or with severe recklessness employed a device, scheme, or artifice 

to defraud; and/or

b. knowingly, recklessly, or negligently obtained money or property by means of 

an untrue statement of a material fact or an omission to state a material fact 

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

under which they were made, not misleading; and/or

c. knowingly, recklessly, or negligently engaged in a transaction, practice, or 

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

the purchaser.

52. By reason of the foregoing, Defendants have violated and, unless enjoined, will 

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

FOURTH CLAIM FOR RELIEF

Aiding and Abetting Violations of the Antifraud Provisions of Section 17(a)(2) of the 

Securities Act [15 U.S.C. § 77q(a)(2)]

Against Montgomery and Fisher

53. Plaintiff re-alleges and incorporates paragraphs 1 through 43 of this Complaint by 

reference as if set forth verbatim in this Claim.

54. By engaging in the acts and conduct alleged herein, Montgomery and Fisher aided 

and abetted Willingham’s violations of Section 17(a)(2) of the Securities Act by knowingly or 

recklessly providing substantial assistance to Willingham who, directly or indirectly, singly or in 

concert with others, in the offer and sale of securities, by use of the means or instruments of 

transportation or communication in interstate commerce or by the use of the mails obtained 

money or property by means of an untrue statement of a material fact or an omission to state a 

material fact necessary in order to make the statements made, in light of the circumstances under 

which they were made, not misleading.

55. By reason of the foregoing, Montgomery and Fisher, directly or indirectly, aided 

and abetted, and unless enjoined will continue to aid and abet, violations of Section 17(a)(2) of 

the Securities Act [15 U.S.C. § 77q(a)(2)]. 

FIFTH CLAIM FOR RELIEF

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

Against All Defendants

56. Plaintiff re-alleges and incorporates paragraphs 1 through 43 of this Complaint by 

reference as if set forth verbatim in this Claim.

57. By engaging in the conduct described herein, Defendants, directly or indirectly, 

singly or in concert with others:

a. made use of the means or instruments of transportation or communication in 
18

interstate commerce or of the mails to sell, through the use or medium of 

written contracts, offering documents, prospectus, oral and written statements, 

or otherwise, securities as to which no registration statement was in effect; 

and/or

b. made use of means or instruments of transportation or communication in 

interstate commerce or of the mails to offer to sell, through the use or medium 

of written contracts, offering documents, prospectus, oral and written 

statements, or otherwise, securities as to which no registration statement had 

been filed.

58. By engaging in the conduct described above, Defendants have violated, and 

unless enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. 

§§ 77e(a) and (c)].

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a judgment: 

1. Permanently enjoining Defendants from violating Sections 5(a), 5(c), and 17(a) of 

the Securities Act [15 U.S.C. §§ 77e(a) and (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];

2. Permanently enjoining Montgomery and Fisher from aiding and abetting future 

violations of Section 17(a)(2) of the Securities Act [15 U.S.C. §§ 77q(a)(2)] and 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)];

3. Ordering Defendants to disgorge ill-gotten gains as a result of the violations 

alleged herein, plus prejudgment interest on those amounts;

4. Imposing civil penalties against Defendants pursuant to Section 20(d) of the 
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Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)] for violations of the federal securities laws as alleged herein; and

5. Imposing such other and further relief as the Commission may show itself 

entitled.

Dated: May 18, 2020 Respectfully submitted,

 Jason P. Reinsch

Jason P. Reinsch

Texas Bar No. 24040120

United States Securities and Exchange Commission

Fort Worth Regional Office

801 Cherry Street, Suite 1900

Fort Worth, Texas 76102

(817) 900-2601 (phone)

(817) 978-4927 (facsimile)

reinschj@SEC.gov

ATTORNEY FOR PLAINTIFF SECURITIES 

AND EXCHANGE COMMISSION