SEC Charges CEO and Boiler Room Operator With Fraud
Former Sanomedics and Fun Cool Free CEO Craig V. Sizer and boiler room operator Miguel 'Michael' Mesa defrauded hundreds of investors, including many seniors, of $20 million by falsely promoting penny stocks as profitable R&D investments while misappropriating 90% of funds to enrich themselves and pay commissions, leading to SEC charges, partial settlements with permanent trading and directorship bars, and parallel criminal prosecution.
The SEC charged Craig V. Sizer and Miguel 'Michael' Mesa with defrauding approximately $20 million from several hundred investors, many of whom were seniors, through fraudulent sales of penny stocks in Sanomedics Inc. and Fun Cool Free Inc. They falsely claimed investor funds would support research and development and that no sales commissions would be paid, when in fact about 90% of the proceeds were misappropriated to enrich themselves and compensate boiler-room agents. Sizer and Mesa agreed to partial settlements without admitting or denying guilt, accepting permanent bars from participating in penny stock offerings, with Sizer additionally barred from serving as a public company officer or director; financial penalties and criminal charges remain pending.
Former Sanomedics Inc. and Fun Cool Free Inc. CEO Craig V. Sizer and boiler room operator Miguel 'Michael' Mesa orchestrated a fraudulent scheme that defrauded several hundred investors—many of them seniors—out of approximately $20 million by promoting penny stocks as lucrative investments tied to legitimate businesses selling infrared thermometers and software. They misled investors by falsely claiming that funds would be used for research and development and that no sales commissions would be paid from investor money, when in reality about 90% of the proceeds were diverted to enrich Sizer and Mesa and to pay aggressive commissions to boiler-room agents. The SEC alleges that Sizer and Mesa violated Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, with Mesa also violating Section 15(a) and Sizer aiding and abetting those violations. Both have agreed to partial settlements with the SEC without admitting or denying the allegations, accepting permanent bars from participating in penny stock offerings, and Sizer has additionally been barred from serving as an officer or director of any public company. Financial sanctions will be determined by the court at a later date. In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida has filed criminal charges against both individuals. The SEC’s investigation, conducted by its Microcap Fraud Task Force in Miami, received assistance from the FBI, the U.S. Attorney’s Office, and FINRA, underscoring the coordinated nature of the enforcement response.
Exhibits & Attached Documents (1)
Extracted insights
- $20.00M $20 million $10M–$100M
- person craig v. sizer
- person future penny stock offerings
- person miguel mesa
- company officer or director of a public company
- company sanomedics inc. and fun cool free inc.
- agency Securities and Exchange Commission
- agency u.s. attorney's office for the southern district of florida
- SEC charged Craig V. Sizer and Miguel Mesa with defrauding seniors and investors
- Craig V. Sizer founded Sanomedics Inc. and Fun Cool Free Inc.
- Craig V. Sizer hired Miguel Mesa to attract and defraud investors
- Craig V. Sizer and Miguel Mesa misappropriated approximately 90 percent of investor funds
- Several hundred investors nationwide defrauded out of approximately $20 million
- Craig V. Sizer and Miguel Mesa violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
- Miguel Mesa violated Section 15(a) of the Exchange Act
- Craig V. Sizer aided and abetted Miguel Mesa's violations
- Craig V. Sizer and Miguel Mesa agreed to be barred from future penny stock offerings
- Craig V. Sizer agreed to be barred from serving as officer or director of a public company
- U.S. Attorney's Office for the Southern District of Florida announced criminal charges against Sizer and Mesa
The Securities and Exchange Commission today charged a former microcap company CEO and a boiler room operator with defrauding seniors and others who were pressured to invest in a pair of penny stock companies and promised lucrative profits. The SEC alleges that Craig V. Sizer founded Sanomedics Inc. and Fun Cool Free Inc., which were purportedly in the business of selling non-contact infrared thermometers and software applications respectively, and he hired Miguel “Michael” Mesa to help him attract and defraud investors in both companies. Sizer allegedly provided Mesa with a list of pitch points for use by boiler-room agents hired by Mesa to sell shares of the stocks based on misrepresentations that investor funds would be used for research and development and no sales commissions would be paid out of investor funds. According to the SEC’s complaint, Sizer and Mesa misappropriated approximately 90 percent of the funds raised from investors, enriching themselves and paying sales commissions to the boiler-room agents. Several hundred investors nationwide were allegedly defrauded out of a total of approximately $20 million. “We allege that Sizer and Mesa fraudulently touted Sanomedics and Fun Cool Free stocks as profitable investments while in fact only Sizer and Mesa and the sales agents were profiting at the expense of investors, many of whom were seniors,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges. Sizer and Mesa have agreed to partial settlements of the SEC’s charges without admitting or denying the allegations. They both agreed to be barred from future penny stock offerings, and Sizer agreed to be barred from serving as an officer or director of a public company. Financial sanctions will be decided by the court at a later date. The SEC’s complaint alleges that Sizer and Mesa violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Mesa also allegedly violated Section 15(a) of the Exchange Act, and Sizer allegedly aided and abetted Mesa’s violations. The SEC’s continuing investigation is being conducted by Gary M. Miller and Eric E. Morales of the Enforcement Division’s Microcap Fraud Task Force in the Miami office, and the case has been supervised by Elisha L. Frank and Jason R. Berkowitz of the Microcap Fraud Task Force. The SEC’s litigation is being led by Alejandro O. Soto. The SEC appreciates the assistance of the Federal Bureau of Investigation, U.S. Attorney’s Office for the Southern District of Florida, and Financial Industry Regulatory Authority.
The Securities and Exchange Commission today charged a former microcap company CEO and a boiler room operator with defrauding seniors and others who were pressured to invest in a pair of penny stock companies and promised lucrative profits. The SEC alleges that Craig V. Sizer founded Sanomedics Inc. and Fun Cool Free Inc., which were purportedly in the business of selling non-contact infrared thermometers and software applications respectively, and he hired Miguel “Michael” Mesa to help him attract and defraud investors in both companies. Sizer allegedly provided Mesa with a list of pitch points for use by boiler-room agents hired by Mesa to sell shares of the stocks based on misrepresentations that investor funds would be used for research and development and no sales commissions would be paid out of investor funds. According to the SEC’s complaint, Sizer and Mesa misappropriated approximately 90 percent of the funds raised from investors, enriching themselves and paying sales commissions to the boiler-room agents. Several hundred investors nationwide were allegedly defrauded out of a total of approximately $20 million. “We allege that Sizer and Mesa fraudulently touted Sanomedics and Fun Cool Free stocks as profitable investments while in fact only Sizer and Mesa and the sales agents were profiting at the expense of investors, many of whom were seniors,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges. Sizer and Mesa have agreed to partial settlements of the SEC’s charges without admitting or denying the allegations. They both agreed to be barred from future penny stock offerings, and Sizer agreed to be barred from serving as an officer or director of a public company. Financial sanctions will be decided by the court at a later date. The SEC’s complaint alleges that Sizer and Mesa violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Mesa also allegedly violated Section 15(a) of the Exchange Act, and Sizer allegedly aided and abetted Mesa’s violations. The SEC’s continuing investigation is being conducted by Gary M. Miller and Eric E. Morales of the Enforcement Division’s Microcap Fraud Task Force in the Miami office, and the case has been supervised by Elisha L. Frank and Jason R. Berkowitz of the Microcap Fraud Task Force. The SEC’s litigation is being led by Alejandro O. Soto. The SEC appreciates the assistance of the Federal Bureau of Investigation, U.S. Attorney’s Office for the Southern District of Florida, and Financial Industry Regulatory Authority.