Sunday, September 19, 2010

Swan Energy Inc Another Boiler Room?

Not new news, but as I come across these things it makes me wonder what is going on over at Swan Energy Inc. Sometime earlier this early this year, Heartland Energy Development Corporation was absorbed, merged or taken over by Swan Energy Inc. Swan Energy Inc. according to the Colorado Secretary of State was formed 05/06/2010. If you go to their website at, the site is not even in existence (at least it was taken down the day of this post). In previous posts that I have published on this board, you will see that I have pointed out that Heartland Energy Development Corporation has been accused several times of Boiler Room Sales Tactics with non-registered representatives selling their securities. Granted it has been ruled by a court in Texas that these "joint ventures" that Heartland Energy Development Corporation were selling were not securities but "joint ventures". It is my opinion that Heartland Energy Development Corporation was able to hind behind a description. It is unfortunate that their case was transferred to Texas to begin with. I believe that had Heartland Energy Development Corporation been forced to try their case in Denver, Colorado where they are located, a judge would have found them guilty of selling unregistered securites.

For example, if we take a look at an article about HEI Resources, Inc. a Colorado based oil and gas operation that had similar principals as Heartland Energy Development Corporation, you would see that William Mathers whom was 90 and had "diminished capacity" according to the report, was cold called from HEI Resources Inc. of Colorado Springs in 2004. The representatives of HEI Resources encouraged Mr. Mathers to invest in oil and gas "joint ventures". Of course HEI Resources denied any wrong doing. What is so wrong with sticking a 90 year old man into an investment that does not offer immediate liquidity you might ask? Nothing according to HEI Resources. Oil and Gas investments historically take time to develop, I am certain they were thinking that Mr. Mathers might enjoy the fruits of his investment well into his 100's. Right?

Mr. Mathers who is from Vermont did actually receive some payments totaling $226,950 which were not considered returns on investment but came partly from the original money alleged the suit. According to the report in the Denver Business Journal, “As a result of [the] defendants’ misrepresentations and concealments, the plaintiffs sustained losses in the form of funds that were invested in worthless and non-productive ventures, that were spent on expenses that were unrelated to the oil and gas exploration [the] defendants’ ventures were supposed to be pursuing or that were unreasonably high,” according to the complaint, which was filed in mid-December.

Notice that in this report HEI Resources and Heartland Energy Development Corporation are both named. Seems that they were associated with each other. As a matter of fact the report goes on to state, " Englewood-based Heartland Energy Development Corp. and Heartland Energy of Colorado LLC allegedly are related to HEI, and are also named in the lawsuit. " Heartland Energy Development Corporation was contacted by the Denver Business Journal and tried to obtain some type of comment but was unable to get anything.

According to a response filed from Heartland Energy Development Corporation stated that it did not carry the onus or responsibility of determining "suitability" for potential "joint venture" holders. They were certain to hide behind their description of "joint ventures" and not securities in their response so that they can continue on their merry way selling unregistered investments. You see, should Heartland Energy Development Corporation, HEI Resources or any of their other developments, (Swan Energy Inc.) have to register their securities... ahem investments... I meant joint ventures, it is altogether possible that they could not obtain registration approval. Registration would also require that all of their representatives to get registered with the proper self-regulatory organizations such as the NASD or the SEC. This would mean that their representatives would have to actually pass a test and obtain a license. Once all of this happened, would it be likely that an educated registered representative would want to force these "joint ventures" down the throats of unsuspecting or hesitant seniors in the community?

According to this article Charles Reed Cagle who owned and operated HEI Resources, also owned Heartland Energy Development Corporation according to the Alabama Securites Commission which ordered Heartland Energy Development Corporation to stop selling unregistered securities in the state in 2007. According to the report from the Denver Business Journal, the Colorado Securities Commission has dealt with Mr. Cagle and Heartland Energy Inc. it was in 2002 that the commission had held a hearingto determine whether the "joint ventures" of Heartland Energy Inc. were actually securities are not. Unfortunately the commissioner at the time decided that there was not enough evidence to determine whether or not these "joint ventures" were actually securities or not.

In the early 1990s, there was a similar issue with an organization called Kinlaw Securities. At the time Charles Reed Cagle was employed for Kinlaw Securities. Allegedly, Kinlaw Securities was using boiler room sales tactics to sell $177 million in unprofitable oil and gas securities. Joseph Kinlaw was one of the defendants named at the time as well as Charles Reed Cagle. In 1998 a federal judge in Dallas ruled that the investments were definitely not securities, but indeed they were "joint ventures". Joseph Kinlaw settled the SEC charges and was barred from the industry, the securities industry. Now how does that make any sense? How does the court rule that the "joint ventures" are not securities, yet Joseph Kinlaw was barred from the securities industry. It doesn't make any sense? Why would the court bar Joseph Kinlaw from the "securities" industry if he did not violate or engage in any illegal activities. As a matter of fact why would Joseph Kinlaw ever agree to this sentence if his "joint ventures" were ruled not to be securities?

At the conclusion of the report, there was a pending lawsuit and Arapahoe County. It seemed that Kinlaw and Koegel had moved their main offices from Dallas to Colorado Springs because of what had happened with the SEC in Texas. The lawsuit claimed that law remains associated with Cagle and HEI Resources.

When you dissect this complex animal, it seems that the same names continue to surface over and over again. That being Joseph Kinlaw, Charles Reed Cagle, Brandon Davis and John Schiffner. Now with Swan Energy Inc. taking over Heartland Energy Development Corp., it would only make sense that many of these individuals would be included in the new organization. In a previous post, I actually made a phone call to Swan Energy Inc. and asked for John Schiffner. I of course did not speak with John as I had no reason to. Once I was transferred to John Schiffner's office, I hung up the phone. I received about four or five calls that same day from Swan Energy Inc. I can only assume that it was John Schiffner and he was wanting to know who the hell is given him a phone call.

It is important to note that I have not seen any complaints against Swan Energy Inc. Of course when Heartland Energy Development Corp. was originally formed there were not any complaints or pending litigation either. Of course there was some kind of heavy affiliation with the previous principles of Kinlaw Securities and HEI Resources. It is just logic to me that Swan Energy Inc. a new entity in the state of Colorado, who most recently took over Heartland Energy Development Corp. did so in an effort to get away from the negative history o Heartland Energy Development Corp.

Thursday, September 2, 2010

Swan Energy Inc. Seems To Be Heartland Energy Development Corporation

It has been awhile since I have seen anything new on Heartland Energy Development Corporation; however, it has been fascinating to see just how interlinked Swan Energy Inc and Heartland Energy Development Corporation really are. I have cited in previous posts how Swan Energy Inc. has maintained many of the former principals and sales staff that was previously at Heartland Energy Development Corporation. I have also pointed out how several state security agencies have accused Heartland Energy Development Corporation of being a boiler room operation. With that being the case, I believe that it will only be a matter of time before Swan Energy Inc. will receive their first cease and desist. I am in high hopes that some of the investors or "joint venture" holders of Swan Energy Inc will come forward and post their experience with Swan Energy Inc.

As of late one of the most interesting things I have found was on Google. By simply searching for "Heartland Energy Development Corporation" these are the results I found:

Swan Energy Inc.

You can view a larger image of that screenshot by clicking on the image. If you will review the listings here, you will notice that the 2nd is titled Swan Energy, inc. The website that the title represents is for Heartland Energy Development Corporation as the domain there is The full URL is

Here is my question.... why would Swan Energy, Inc. even have this website up any longer. After all they have taken over Heartland Energy Development Corporation, right? Better yet, why are they titling a website for Heartland Energy Development Corporation with their company name? In my honest opinion, this was an oversight during the "merger" which never really happened. Again it is my opinion that Swan Energy Inc. has been developed so that Heartland Energy Development Corporation will not have to deal with the repercussion of their negative press. For every negative article about Heartland Energy Development Corporation or Swan Energy Inc, there is another investor or "Joint Venture" partner that will not invest money. This of course would have a negative effect on John Schiffner taking out Jessica Biel on a date (more about this in future posts).

Still looks and seems fishy. If Swan Energy would care to comment, I welcome their comments and emails as it would be more helpful hearing directly from the company. My email address is and I am glad to publish any comments you have!

Wednesday, August 11, 2010

John Schiffner, Swan Energy Inc.

Perhaps Swan Energy Inc. took over Heartland Energy Development Corporation, and it is unclear as to whether it is Swan Energy Inc. or Swan Energy Development Corporation. Nonetheless, a call to the old Heartland Energy Development Corporation phone number will result in a call to the new Swan Energy Inc. I had called to see if any of the principals from Heartland Energy Development Corporation were still available. The purpose is to find out if Swan Energy Inc. is a legitimate company that has taken over the assets of Heartland Energy Development Corporation or to find out if Swan Energy Inc. is just a shell for the old Heartland Energy Development Corporation to continue doing business without suffering the negative press that had come out over the last several years.

If you review my last post, "Is it Heartland Energy Development Corporation, or is Swan Energy Inc. A Real Company?", you will see many references throughout the post citing different cease and desist orders as well as citations and articles about Heartland Energy Development Corporation and their questionable sales tactics.

Out of curiosity, I called the new Swan Energy Inc. to find out if John Schiffner is still associated with the company. My call was transferred to John Schiffner's voicemail right away. So it is apparent that some of the old principals associated with the old Heartland Energy Development Corporation are still there. John Schiffner was of particular interest to me as he seems to pop up frequently in the different complaints that have been filed against Heartland Energy Development Corporation. For example, a simple search for John Schiffner in Google's search engine will result in several different complaints and orders from different states. If you look at this example, John Schiffner was named with Charles Reed Cagle in a order of prohibition from the State of Illinois. It seems that in this order John Schiffner had been cold calling Illinois residents offering to sell them participation interests in a joint venture called Heartland Energy, Inc. The offering documents apparently offered one participation interest unit at a cost of $10,000.00 in the Los Ojeuelos #1 Joint Venture.

It would seem that Heartland Energy Inc (HEI) failed to file with the Secretary of State an application for the registration of the securities described above as required by Illinois Securities Law. In the end, Charles Reed Cagle and John Schiffner, their officers, directors, agents, employees, members, managers, partners, affiliates and successors are prohibited from offering or selling securities in or from the State of Illinois until further Order of the Secretary of State.

So it would seem just by Swan Energy, Inc.'s decision to keep John Schiffner on board, that Swan Energy Inc. may not be all that it seems online. From the beginning of this blog I have questioned if Swan Energy, Inc. is just a new name for the old Heartland Energy Devleopment Corporation or if it was a real acquisition.

Sunday, July 18, 2010

Is it Heartland Energy Development Corporation, or is Swan Energy Inc. A Real Company?

As a native of Colorado and one that is simply interested in securities like stocks and bonds, I take a natural interest to all of the fraud that has been going on here locally. Everything from the small time Ponzi Schemer to the flat out fraudster. One company that peaked my interest was Heartland Energy Development Corporation out of Englewood, Colorado.

Denver used to be one of the biggest and most flourishing environments for penny stockbrokers or "small cap specialists" back in the mid to late 1980's. Denver has been the home of many scandals from Silverado to Blinder Robinson. So it would seem that there is always something going on in the small town of Denver, Colorado.

In 2007 The Alabama Securities Commission had issued a cease and desist order to Heartland Energy Development Corporation located at the time at 9780 Mount Pyramid Court, Suite 200, Englewood, Colorado 80112. Some of the respondents named in the cease and desist order for Heartland Energy Development Corporation were John Schiffner, Brandon Davis and Charles Reed Cagle.

According to the order, the Alabama Securities Commission states that a representative of Heartland Energy Development Corporation engaged in the offer of and/or sale of unregistered securities in the Starr County Kennard Joint Venture to a resident in Alabama. Further, it was John Schiffner who made a general solicitation or cold call to the Alabama Resident. The representative, John Schiffner mailed documents to the resident which represented Brandon Davis as the CEO of Heartland Energy Development Corporation at the time.

The offering that was mailed describes the investment offered as participation in units of interest in a joint venture which was to be formed under Texas partnership law to engage primatily in the business of exploration, production from, and operation of an oil and gas well in Starr County, Texas. The objectives of the investment was to acquire the acreage for the Wellbore and conduct operations to drill, test and if appropriate complete the prospect well. The investor in this case would be provided cash distributions from operations.

The respondents to the order, namely John Schiffner were neither registered nor exempt from registration with Securities Exhange Commission with the state of Alabama. According to the order, the units of interest are defined as a security and John Schiffner needed to be registered in order to offer these units to the public.

So basically, John Schiffner and the other officers listed above were issued a cease and desist order, and from the looks of it, that was all. What happened after that? Did anyone pursue them any further?

The entire point of this blog is to find answers to some of these questions. Heartland Energy Development Corporation does not seem to exist any longer. I have contacted Heartland Energy Development Corporation at their old phone number (303) 768-9440. Today the phones are answered "Swan Energy Inc". Who is Swan Energy Inc.? Is it just a cover up company that would clean Heartland Energy Development Corporation's scarred background with the SEC? This is what I hope to find out in future posts.