The Securities and Exchange Commission has charged a former microcap CEO and a boiler room operator with pressuring senior citizens and other investors to buy penny stocks in a $20 million fraud.
Craig V. Sizer was the CEO of Sanomedics, which purportedly sold non-contact infrared thermometers, and chairman of software applications company Fun Cool Free, according to an
SEC statement Monday.
Mr. Sizer hired Miguel ''Michael'' Mesa and provided him with a list of pitch points for use by boiler room agents hired by Mr. Mesa to help him attract and defraud investors in both companies, according to the SEC. Investors were promised lucrative profits, wrongly told that their funds would be used for research and development and that there would be no sales commissions, according to the SEC statement.
“We allege that [Mr.] Sizer and [Mr.] Mesa fraudulently touted Sanomedics and Fun Cool Free stocks as profitable investments, while in fact only [Mr.] Sizer and [Mr.] Mesa and the sales agents were profiting at the expense of investors, many of whom were seniors,'' Eric Bustillo, director of the SEC's Miami Regional Office, said in the statement.
Mr. Sizer and Mr. Mesa misappropriated about 90% of the funds raised from investors, enriching themselves and paying sales commissions to the boiler-room agents, according to the regulator's complaint.
Both agreed to be barred from future penny stock offerings, while Mr. Sizer also consented to a ban from serving as an officer or director of a public company, the SEC said.
Mr. Sizer's attorney, Robert Nicholson, with Nicholson & Eastin in Fort Lauderdale, Fla., didn't immediately return a phone call seeking comment. Mr. Mesa's lawyer, Alvin Entin of Entin & Della Fera, also in Fort Lauderdale, could not be reached either.
In a related move, the U.S. Attorney's Office for the Southern District of Florida announced criminal charges Monday, according to the statement.
