SEC v. Craig V. Sizer; and Miguel Mesa, No. 1:16-cv-24106, Southern District of Florida (Sept. 26, 2016) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO.: ________________________

SECURITIES AND EXCHANGE COMMISSION, )
        )
   Plaintiff,    )
v.        )
        )
CRAIG V. SIZER and MIGUEL MESA,    )
        )
     Defendants.     )
_______________________________________________ )

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

 Plaintiff Securities and Exchange Commission (“Commission”) alleges as follows:

INTRODUCTION

1. The Commission brings  this  action against  Craig  V.  Sizer  and  Miguel  Mesa
(collectively  “Defendants”)  for  violating  the  antifraud  and broker-dealer registration provisions
of  the  federal  securities  laws  and  thereby  defrauding  at  least  600  investors  nationwide  out  of
approximately $20 million.
2. Beginning at least as early as 2009 and until August 2015, Defendant Sizer hired
Mesa  to  operate boiler-rooms  in  South  Florida  and  Southern  California  to  sell  shares  of
Sanomedics,  Inc.  (“Sanomedics”)  and  Fun  Cool  Free,  Inc.  (“Fun  Cool  Free”)  (collectively  “the
Companies”).  Sizer provided Mesa with pitch points for the boiler-room sales agents containing
materially  misleading  statements  regarding  the  Defendants’  use  of  investor  proceeds,  which
Mesa  used  to  draft  materially  misleading  boiler-room  sales  scripts.  Mesa  hired  and  oversaw
boiler  room  sales  agents  who used  the sales  scripts to  cold-call  and  fraudulently convince
investors to purchase shares of the Companies’ stock.

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3. Sizer,  directly  and  through  Mesa’s  boiler  room  sales  agents, and  Mesa,  through
his boiler room sales agents, made material misrepresentations and omissions to investors in the
Companies’  stock  regarding  the  payment  of  commissions  to  the  sales  agents.    At  Sizer  and
Mesa’s  instructions,  sales  agents  falsely  told  investors  that  no  commissions  or  fees  would  be
charged  or  paid  for  their  purchase  of  Sanomedics  and  Fun  Cool  Free  stock.    Contrary  to  the
representations  made  to  investors  and  with  Sizer’s  agreement,  Mesa  used  investor  funds  to  pay
commissions  of  between  15%  and  20%  to  the  sales  agents.    At  times,  Sizer  also  solicited
investors directly by telephone and sold shares of the Companies’ stock to investors using these
misrepresentations and omissions.
4. Mesa also took active steps to conceal the boiler room operation by directing sales
agents to falsely represent that they were employees of Sanomedics or Fun Cool Free.
5. Sizer,  directly  and  through  Mesa’s  boiler  room  sales  agents, and  Mesa,  through
his boiler room sales agents, also made material misrepresentations and omissions to prospective
investors regarding the use of the funds provided by the investors.  Sizer and Mesa directed the
sales agents to represent that the funds would be invested in the Companies, including research
and  development  for  Sanomedics  and  the acquisition  of  another  company  for  Fun  Cool  Free.
Instead,  Sizer  and  Mesa  misappropriated  approximately  90%  of  the  investor  proceeds  they
raised.
6. Defendant Sizer used at least $3 million of misappropriated investor proceeds for
his own personal benefit, including paying for personal expenses such as credit cards, residential
renovations, luxury  automobiles,  and  mortgage  payments,  and  through  ATM  withdrawals  and
checks  written  to  himself  and  others.    Defendant  Mesa  used  his  share  of  the  misappropriated

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investor  funds  to  finance  the  boiler  room  operation,  pay  commissions  to  his  boiler-room  sales
agents, and for his own use and personal benefit.
7. Moreover, because Defendant Mesa was not registered with the Commission as a
broker or dealer, he acted as an unregistered broker in violation of the registration requirements
of  the  federal  securities  laws  when  he  offered  and  sold  shares  of  the  Companies’  stock to
investors.  Defendant Sizer aided and abetted Defendant Mesa in acting as an unregistered broker
by  hiring  Mesa  to  operate  the  boiler  room  knowing  that  (1) Mesa  was  not  registered  with  the
Commission as a broker or dealer,  and (2) that Mesa would hire and direct the boiler-room sales
agents to offer and sell shares of the Companies’ stock and pay them commissions.
8. Through  their  fraudulent  conduct,  the Defendants received  millions  of  dollars  of
investor proceeds by violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and
Section  10(b)  of  the  Securities  Exchange  Act  of  1934  (“Exchange  Act”)  and  Rule  10b-5
thereunder.  In  addition,  Defendant Mesa violated Section  15(a)  of  the  Exchange  Act  and
Defendant Sizer aided and abetted Defendant Mesa’s violations of Section 15(a) of the Exchange
Act.    Unless  restrained  and  enjoined,  the  Defendants  are  reasonably  likely  to  engage  in  future
violations of the federal securities laws.
THE DEFENDANTS
9. Sizer, age 48, a  resident  of  Aventura,  Florida,  was  the  co-founder  and  former
Chief Executive Officer of Sanomedics and the former president and chairman of Fun Cool Free.
Sizer  was  a  registered  representative  formerly  associated  with  the  broker-dealers  Investors
Associates, Inc. (1992-1993) and American Investment Services, Inc. (1995-1996).  Sizer is not,
and  was  not  at  the  time  of  the  conduct  described  herein,  registered  with  the  Commission  as  a
broker or dealer or associated with one.

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10. Mesa, age 56, a resident of Miami Lakes, Florida, hired unregistered sales agents
to offer and sell to investors the securities of Sanomedics and Fun Cool Free.  In 2004 and 2006,
the  Commodities  Futures  Trading  Commission  (“CFTC”)  charged  Mesa  in  separate  civil
injunctive actions alleging antifraud violations involving trading in futures contracts and options.
See, CFTC v. Brickell Key Financial, LLC, et. al., Case No. 04-22549-CIV-PAS (S.D.FL. 2004);
and CFTC v. First International Group, Inc., Case No. 06-20979-CIV-AJ (S.D.FL. 2006).  Final
judgments in those two cases were entered against Mesa enjoining him from future violation of
laws  related  to  commodities  futures  transactions  and  he  was  permanently  barred  from  the
commodities  industry.    Mesa  is  not,  and  was  not  at  the  time  of  the  conduct  described  herein,
registered with the Commission as a broker or dealer or associated with one.
BACKGROUND OF THE COMPANIES
A. Sanomedics
11. Sanomedics,  f/k/a  “Sanomedics  International  Holdings,  Inc.,”  is  a  Delaware
corporation with  its  principal  place  of  business  in  Miami,  Florida.  It is  purportedly  in  the
business of  developing  and  selling  non-contact  infrared  thermometers.    It  became  a  publicly
traded company in July 2009 through a reverse merger with a public shell company.  It has been
an  SEC-reporting  company  since  October  27,  2010  and  is  quoted  on  OTC  Link,  which  is
operated  by  OTC  Markets  Group  Inc.,  under  the  symbol  “SIMH.”     Sizer  was  a  founder  of
Sanomedics  in  2009  and  served  as  its  Chief Executive Officer  and  director  until  in  or  about
August  2012.    Sanomedics’  stock  is  a  “penny  stock”  as  defined  by  the  Exchange  Act.    At  all
times relevant to this action, the stock’s shares traded at less than one dollar per share.  During
the  same  time  period,  Sanomedics’  stock  did  not  meet  any  of  the  exceptions  to  penny  stock
classification pursuant to Exchange Act Section 3(a)(51), 15 U.S.C. § 78c(a)(51), and Rule 3a51-

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1,  17  C.F.R.  § 240.3a51-1.    For  example  Sanomedics’  stock:  (a)  did  not  trade  on  a  national
securities exchange; (b) was not an “NMS stock,” as defined in 17 C.F.R. § 242.600(b)(47); (c)
did  not  have  tangible  assets  (i.e.,  total  assets  less  intangible  assets  and  liabilities)  in  excess  of
$5,000,000; and (d) did not have average revenue of approximately $6,000,000 for the last three
years.  See Exchange Act, Rule 3a51-1(g).
B. Fun Cool Free
12. Fun Cool Free was incorporated in Delaware on or about November 7, 2014.  Fun
Cool Free has its principal place of business in Miami, Florida.  It    is purportedly a distributor of
software  applications  (“apps”).    Sizer  was  the  president  and  a  director  of  Fun  Cool  Free  until
August 2015.
JURISDICTION AND VENUE

13. This Court has jurisdiction over 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(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa(a)].
14. This  Court  has  personal  jurisdiction  over  the  Defendants  and  venue  is  proper  in
the  Southern  District  of  Florida  because  many  of  the  acts  and  transactions  constituting  the
violations alleged in this complaint occurred in this District.  Moreover, Defendants reside in the
Southern District of Florida and Sanomedics and Fun Cool Free had their principal offices in this
District.
15. In  connection  with  the  conduct  alleged  in  the  complaint,  Defendants,  directly  or
indirectly,  singly  or  in  concert  with  others,  made  use  of  the  means  or  instrumentalities  of
interstate commerce or the mails.

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THE FRAUDULENT SCHEME
A. The Fraudulent Offer and Sale of Sanomedics Stock
16. Beginning  in  2009,  Sizer  acquired  and  gained  control  over  a  substantial  number
of shares  of  Sanomedics  stock.    In  2009,  Mesa  operated  unregistered boiler  rooms  in  South
Florida  and  Southern  California.    Sizer  engaged  Mesa  and  Mesa’s  boiler  room  operation  to
market and sell restricted shares of Sanomedics stock to the public.  At the time, Sizer knew that
Mesa was not registered with the Commission as a broker or dealer.
17. Beginning   in   2009   and   continuing   until   approximately   mid-2014,   Mesa
supervised  his  boiler  room  sales  agents  as  they  solicited  prospective  investors,  many of  whom
were  elderly  and  unsophisticated,  through  cold  calling,  thereby  raising  approximately  $18
million  from  the  sale  of  restricted  common  shares  of  Sanomedics  stock.    Sizer  provided  Mesa
pitch points to be used to sell the shares of stock, including a representation that no commissions
would be paid on the purchase of Sanomedics stock.
18. Mesa employed at least seven sales agents, purchased lists of contact information
for prospective investors, and told the sales agents that they did not need to be licensed to sell the
stock.      Mesa drafted sales   scripts   containing   material   misrepresentations   and   omissions,
including  misrepresenting  that  the  sales  agents  were  not  paid  commissions,  and  provided  the
sales  scripts  to  the  sales  agents.    Mesa  instructed  sales  agents  to  tell  investors  that  their  money
would  be  used  by  the  company  for  research  and  development.    At  times,  Mesa  monitored  the
sales  agents’  calls  as  they  solicited  prospective  investors  and  directed  them  as  to  what  to  tell
prospective investors.
19. Acting  on  Mesa’s  instructions,  the  sales  agents  offered and  sold  investors  shares
of restricted Sanomedics stock at prices set by Sizer and Mesa that ranged from $0.05 - $2.50 per

 7
share.    The  sales  agents  used  high  pressure  sales  tactics  and  promised  lucrative  profits.    For
example, sales agents told investors that a limited number of shares of stock were available at a
discount from the market price, guaranteeing them a  c onsiderable prof  it.
20. Sizer and Mesa agreed that Mesa would instruct the sales agents to tell investors
that there was no commission paid to the sales agents, when in fact, Mesa used between 15-20%
of  the  investor  funds  to  pay  such commissions.    Sales  agents,  knowing  they  were  paid
commissions,  either misrepresented  to investors  that there  were  no  fees  or  commissions  paid
for the purchase of the Sanomedics stock or failed to disclose the commissions to investors.   In
order  to  conceal  and  further  the  fraud,  the  sales  agents  used  false  names  with  investors  and
falsely told  investors  that  they  were  employees  of  Sanomedics.    At  times,  sales  agents  falsely
told investors that they were paid in shares of Sanomedics stock.
21. Sizer  also  personally  spoke  with  some investors.    Sizer  marketed  and  sold
Sanomedics  stock  to  investors  by  making  some  of  the  same  misrepresentations  made  by  the
boiler  room  sales  agents.    Sizer  and  the  sales  agents  falsely  touted  Sanomedics  as  a  profitable
investment  that  was  raising  investor  funds  to  develop  and  grow  its  non-contact  thermometer
business.    Sizer  also  told  investors  that  he  was  a  large  investor  and  co-founder  of  Sanomedics
and falsely reassured them that Sanomedics was a good value and would likely rise in price.
22. Sizer, Mesa, and the sales agents raised approximately $18 million selling shares
of Sanomedics to more than 600 investors nationwide.  Sizer and Mesa split the approximate $18
million,   and  Mesa  paid  15-20%  of  the  funds  he  misappropriated  to  the  sales  agents  as
commissions.  Sizer was aware and agreed to the payment of commissions to the sales agents.

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B.  The Fraudulent Offer and Sale of Fun Cool Free Stock
23.  By mid-2014, Sanomedics’ public share price had declined significantly making
it difficult to continue the fraudulent offer and sale of its shares, so Sizer procured Fun Cool Free
as another vehicle to continue the fraud scheme.  Sizer again engaged Mesa and his unregistered
boiler  rooms  to  solicit  investors  to  purchase  shares  of  Fun  Cool  Free  stock.    As  before, Mesa’s
sales  agents  used  high  pressure  sales  tactics  to  offer  and  sell  Fun  Cool  Free  stock  emphasizing
that investors needed to act immediately or risk missing a lucrative opportunity.    And, as with
Sanomedics, Sizer and the sales agents materially misrepresented to investors that Fun Cool Free
investor proceeds would not be used to pay sales commissions.
24. Sizer,  Mesa  and  their sales  agents  raised  approximately  $1.4  million  through  the
sale  of  Fun  Cool  Free  shares  to  nearly  70  investors  nationwide.    Sizer  and  Mesa  split  the
approximate  $1.4  million, and  Mesa  paid  15-20%  of  the  funds  he  misappropriated  to  the  sales
agents as commissions.  Sizer was aware and agreed to the payment of commissions to the sales
agents.

COUNT I
Fraud in the Offer or Sale of Securities in Violation of
Section 17(a)(1) of the Securities Act
(Against Sizer and Mesa)

25. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint
as if fully set forth herein.
26. Beginning no later than 2009 and continuing through in or about August 2015, the
Defendants,  directly  and  indirectly,  by  use  of  the  means  or  instruments  of  transportation  or
communication in interstate commerce and by use of the mails, in the offer or sale of securities,
knowingly or recklessly employed devices, schemes or artifices to defraud.

 9
27. By  reason  of  the  foregoing,  the  Defendants  directly  and  indirectly  violated,  and
unless  enjoined,  are  reasonably  likely  to  continue  to  violate, Section 17(a)(1)  of  the  Securities
Act, 15 U.S.C. § 77q(a)(1).

COUNT II

Fraud in the Offer or Sale of Securities in Violation of
Section 17(a)(2) of the Securities Act
(Against Sizer and Mesa)

28. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint
as if fully set forth herein.
29. Beginning no later than 2009 and continuing through in or about August 2015, the
Defendants,  directly  and  indirectly,  by  use  of  the  means  or  instruments  of  transportation  or
communication  in  interstate  commerce  and  by  the  use  of  the  mails,  in  the  offer  or  sale  of
securities,   negligently obtained  money  or  property  by  means  of  untrue  statements  of  material
facts and omissions to state material facts necessary to make the statements made, in the light of
the circumstances under which they were made, not misleading.
30. By  reason  of  the  foregoing,  the  Defendants  directly  and  indirectly  violated,  and
unless  enjoined,  are  reasonably  likely  to continue  to  violate, Section 17(a)(2)  of  the  Securities
Act, 15 U.S.C. § 77q(a)(2).

COUNT III
Fraud in the Offer or Sale of Securities in
Violation of Section 17(a)(3) of the Securities Act
(Against Sizer and Mesa)

31. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint
as if fully set forth herein.

 10
32. Beginning no later than 2009 and continuing through in or about August 2015, the
Defendants,  directly  and  indirectly,  by  use  of  the  means  or  instruments  of  transportation  or
communication  in  interstate  commerce  and  by  the  use  of  the  mails,  in  the  offer  or  sale  of
securities negligently engaged in acts, transactions, practices and courses of business which have
operated as a fraud or deceit upon purchasers and prospective purchasers of such securities.
33. By  reason  of  the  foregoing,  the  Defendants  directly  and  indirectly  violated,  and
unless  enjoined,  are  reasonably  likely  to  continue  to  violate,  Section 17(a)(3)  of  the  Securities
Act, 15 U.S.C. § 77q(a)(3).

COUNT IV
Fraud in Violation of Section 10(b) and
Rule 10b-5 of the Exchange Act
(Against Sizer and Mesa)
34. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint
as if fully set forth herein.
35. Beginning no later than 2009 and continuing through in or about August 2015, the
Defendants,  directly  and  indirectly,  by  use  of any  means  and  instrumentalities  of  interstate
commerce, and of the mails,  in connection with the purchase or sale of securities, knowingly or
recklessly:  (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of
material  facts  and/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 upon the purchasers
of such securities.

 11
36. By  reason  of  the  foregoing,  the  Defendants  directly  and  indirectly  violated,  and
unless enjoined, are reasonably likely to continue to violate, Section 10(b) of the Exchange Act,
15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, thereunder.

COUNT V
Unlawfully Operating as a Broker-Dealer
Without Registering with the Commission in
Violation of Section 15(a) of the Exchange Act
(Against Mesa)
37. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint
as if fully set forth herein.
38. Beginning  no  later  than  2009 and  continuing  through  in  or  about  August  2015,
Defendant  Mesa  acted as broker or  dealer  and  made  use  of  the  mails  or  any  means  or
instrumentality of interstate commerce to effect transactions in securities, or to induce or attempt
to induce the purchase or sale of securities, without being associated with a broker or dealer that
was registered with the Commission in accordance with Section 15(b) of the Exchange Act, 15
U.S.C. § 78o(b).
39. By reason of the foregoing, Defendant Mesa directly and indirectly violated, and
unless enjoined, is reasonably likely to continue to violate, Section 15(a) of the Exchange Act, 15
U.S.C. § 78o(a).

COUNT VI
Aiding and Abetting the Unlawful Operation of a
Broker-Dealer not Registered with the Commission in
Violation of  Exchange Act Section 15(a) of the Exchange Act
(Against Sizer)
40.  The Commission repeats and realleges paragraphs 1 through 24 of this complaint
as if fully restated herein.

 12
41. Beginning  no  later  than  2009  and  continuing  through  in  or  about  August  2015,
Defendant  Mesa  acted  as  broker  or  dealer  and  made  use  of  the  mails  and  any  means  or
instrumentality of interstate commerce to effect transactions in securities, or to induce or attempt
to induce the purchase or sale of securities, without being associated with a broker or dealer that
was registered with the Commission in accordance with Section 15(b) of the Exchange Act, 15
U.S.C.  §  78o(b),  and  by  reason  of  the  of  the  foregoing  violated  Section  15(a)  of  the  Exchange
Act, 15 U.S.C. § 78o(a).
42. Beginning  no  later  than  2009  and  continuing  through  in  or  about  August  2015,
Defendant  Sizer  knowingly  or  recklessly  aided  and  abetted  violations  of  Section  15(a)  of  the
Exchange Act  by  Defendant  Mesa.    Sizer  also,  directly  and  indirectly,  had  a  general  awareness
that  he  was  part  of  an  overall  activity  that  was  improper  or  illegal  and  knowingly,  or  was
extremely  reckless  in  not  knowing,  and  provided  substantial  assistance  to  violations  of  Section
15(a) of the Exchange Act.
43. By  reason  of  the  foregoing  acts,  Defendant Sizer  aided  and  abetted  and,  unless
enjoined,  is  reasonably  likely  to  continue  to  aid  and  abet  violations  of  Section  15(a) of  the
Exchange Act by Defendant Mesa.
RELIEF REQUESTED
 WHEREFORE, the Commission respectfully requests that the Court:
I.
Permanent Injunctive Relief
 Issue  a  Permanent  Injunction  restraining  and  enjoining:  (1) Defendants  Sizer  and  Mesa
from  violating  Section  17(a)  of  the  Securities  Act  and  Section  10(b)  of  the  Exchange  Act  and
Rule  10b-5(a),  (b),  and  (c)  thereunder;  (2)  Defendant  Mesa  from  violating  Section  15(a)  of  the

 13
Exchange  Act;  and  (3)  Defendant  Sizer  from  aiding  and  abetting  violations  of  Section  15(a)  of
the Exchange Act.
II.
Disgorgement
 Issue  an  Order directing  the  Defendants  to  disgorge  all  ill-gotten  profits  or  proceeds
received from  investors  as  a  result  of  the  acts  and/or  courses  of  conduct  complained  of  herein,
with prejudgment interest thereon.
III.
Civil Money Penalties
 Issue an Order directing the Defendants to pay civil money penalties pursuant to Section
20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d) of the Exchange Act, 15 U.S.C.
§ 78(d).
IV.
Penny Stock Bars

 Issue  an  Order  pursuant  to  Section  20(g)  of  the  Securities  Act,  15  U.S.C.  §  77t(g),  and
Section   21(d)(6)   of   the   Exchange   Act,   15   U.S.C.   §   78u(d)(6),   permanently barring the
Defendants from participating in any offering of a penny stock.
V.
Officer and Director Bar
 Issue an Order permanently barring Defendant Sizer from serving as an officer or director
of  any  public  company  pursuant  to  Section  20(e)  of  the  Securities  Act,  Sections  21(d)(2)  and
21(d)(5) of the Exchange Act.

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VI.
Further Relief
 Grant such other and further relief as may be necessary and appropriate.
VII.
Retention of Jurisdiction
 Further,  the  Commission  respectfully  requests  that  the  Court  retain  jurisdiction  over  this
action in order to implement and carry out the terms of all orders and decrees that may hereby be
entered,  or  to  entertain  any  suitable  application  or  motion  by  the  Commission  for  additional  relief
within the jurisdiction of this Court.
Dated:  September 26, 2016
      Respectfully submitted,

         By: s/ Alejandro O. Soto
      Alejandro O. Soto
Senior Trial Counsel
Florida Bar No. 172847
Telephone: (305) 982-6313
Email: [email protected]

      s/Eric E. Morales
Eric E. Morales
Attorney
S.D. Fla. Court ID No. A5500886
Telephone: (305) 982-6210
Email: [email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
      801 Brickell Avenue, Suite 1800
      Miami, Florida  33131
      Telephone: (305) 982-6300
      Facsimile:  (305) 536-4154

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 

 
CASE NO.: ________________________                 

 
SECURITIES AND EXCHANGE COMMISSION, ) 
        ) 
   Plaintiff,    ) 
v.        ) 
        ) 
CRAIG V. SIZER and MIGUEL MESA,   ) 
        )   
     Defendants.  ) 
_______________________________________________ ) 
 

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF 
 

 Plaintiff Securities and Exchange Commission (“Commission”) alleges as follows: 
 

INTRODUCTION 
 

1. The Commission brings this action against Craig V. Sizer and Miguel Mesa 

(collectively “Defendants”) for violating the antifraud and broker-dealer registration provisions 

of the federal securities laws and thereby defrauding at least 600 investors nationwide out of 

approximately $20 million.   

2. Beginning at least as early as 2009 and until August 2015, Defendant Sizer hired 

Mesa to operate boiler-rooms in South Florida and Southern California to sell shares of 

Sanomedics, Inc. (“Sanomedics”) and Fun Cool Free, Inc. (“Fun Cool Free”) (collectively “the 

Companies”).  Sizer provided Mesa with pitch points for the boiler-room sales agents containing 

materially misleading statements regarding the Defendants’ use of investor proceeds, which 

Mesa used to draft materially misleading boiler-room sales scripts. Mesa hired and oversaw 

boiler room sales agents who used the sales scripts to cold-call and fraudulently convince 

investors to purchase shares of the Companies’ stock.        

Case 1:16-cv-24106-JAL   Document 1   Entered on FLSD Docket 09/26/2016   Page 1 of 14



 2 

3. Sizer, directly and through Mesa’s boiler room sales agents, and Mesa, through 

his boiler room sales agents, made material misrepresentations and omissions to investors in the 

Companies’ stock regarding the payment of commissions to the sales agents.  At Sizer and 

Mesa’s instructions, sales agents falsely told investors that no commissions or fees would be 

charged or paid for their purchase of Sanomedics and Fun Cool Free stock.  Contrary to the 

representations made to investors and with Sizer’s agreement, Mesa used investor funds to pay 

commissions of between 15% and 20% to the sales agents.  At times, Sizer also solicited 

investors directly by telephone and sold shares of the Companies’ stock to investors using these 

misrepresentations and omissions. 

4. Mesa also took active steps to conceal the boiler room operation by directing sales 

agents to falsely represent that they were employees of Sanomedics or Fun Cool Free. 

5. Sizer, directly and through Mesa’s boiler room sales agents, and Mesa, through 

his boiler room sales agents, also made material misrepresentations and omissions to prospective 

investors regarding the use of the funds provided by the investors.  Sizer and Mesa directed the 

sales agents to represent that the funds would be invested in the Companies, including research 

and development for Sanomedics and the acquisition of another company for Fun Cool Free.  

Instead, Sizer and Mesa misappropriated approximately 90% of the investor proceeds they 

raised.    

6. Defendant Sizer used at least $3 million of misappropriated investor proceeds for 

his own personal benefit, including paying for personal expenses such as credit cards, residential 

renovations, luxury automobiles, and mortgage payments, and through ATM withdrawals and 

checks written to himself and others.  Defendant Mesa used his share of the misappropriated 

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investor funds to finance the boiler room operation, pay commissions to his boiler-room sales 

agents, and for his own use and personal benefit.   

7. Moreover, because Defendant Mesa was not registered with the Commission as a 

broker or dealer, he acted as an unregistered broker in violation of the registration requirements 

of the federal securities laws when he offered and sold shares of the Companies’ stock to 

investors.  Defendant Sizer aided and abetted Defendant Mesa in acting as an unregistered broker 

by hiring Mesa to operate the boiler room knowing that (1) Mesa was not registered with the 

Commission as a broker or dealer, and (2) that Mesa would hire and direct the boiler-room sales 

agents to offer and sell shares of the Companies’ stock and pay them commissions.      

8. Through their fraudulent conduct, the Defendants received millions of dollars of 

investor proceeds by violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and 

Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 

thereunder. In addition, Defendant Mesa violated Section 15(a) of the Exchange Act and 

Defendant Sizer aided and abetted Defendant Mesa’s violations of Section 15(a) of the Exchange 

Act.  Unless restrained and enjoined, the Defendants are reasonably likely to engage in future 

violations of the federal securities laws.      

THE DEFENDANTS 

9. Sizer, age 48, a resident of Aventura, Florida, was the co-founder and former 

Chief Executive Officer of Sanomedics and the former president and chairman of Fun Cool Free.  

Sizer was a registered representative formerly associated with the broker-dealers Investors 

Associates, Inc. (1992-1993) and American Investment Services, Inc. (1995-1996).  Sizer is not, 

and was not at the time of the conduct described herein, registered with the Commission as a 

broker or dealer or associated with one.   

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10. Mesa, age 56, a resident of Miami Lakes, Florida, hired unregistered sales agents 

to offer and sell to investors the securities of Sanomedics and Fun Cool Free.  In 2004 and 2006, 

the Commodities Futures Trading Commission (“CFTC”) charged Mesa in separate civil 

injunctive actions alleging antifraud violations involving trading in futures contracts and options.  

See, CFTC v. Brickell Key Financial, LLC, et. al., Case No. 04-22549-CIV-PAS (S.D.FL. 2004); 

and CFTC v. First International Group, Inc., Case No. 06-20979-CIV-AJ (S.D.FL. 2006).  Final 

judgments in those two cases were entered against Mesa enjoining him from future violation of 

laws related to commodities futures transactions and he was permanently barred from the 

commodities industry.  Mesa is not, and was not at the time of the conduct described herein, 

registered with the Commission as a broker or dealer or associated with one.   

BACKGROUND OF THE COMPANIES 

A. Sanomedics 

11. Sanomedics, f/k/a “Sanomedics International Holdings, Inc.,” is a Delaware 

corporation with its principal place of business in Miami, Florida. It is purportedly in the 

business of developing and selling non-contact infrared thermometers.  It became a publicly 

traded company in July 2009 through a reverse merger with a public shell company.  It has been 

an SEC-reporting company since October 27, 2010 and is quoted on OTC Link, which is 

operated by OTC Markets Group Inc., under the symbol “SIMH.”   Sizer was a founder of 

Sanomedics in 2009 and served as its Chief Executive Officer and director until in or about 

August 2012.  Sanomedics’ stock is a “penny stock” as defined by the Exchange Act.  At all 

times relevant to this action, the stock’s shares traded at less than one dollar per share.  During 

the same time period, Sanomedics’ stock did not meet any of the exceptions to penny stock 

classification pursuant to Exchange Act Section 3(a)(51), 15 U.S.C. § 78c(a)(51), and Rule 3a51-

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1, 17 C.F.R. § 240.3a51-1.  For example Sanomedics’ stock: (a) did not trade on a national 

securities exchange; (b) was not an “NMS stock,” as defined in 17 C.F.R. § 242.600(b)(47); (c) 

did not have tangible assets (i.e., total assets less intangible assets and liabilities) in excess of 

$5,000,000; and (d) did not have average revenue of approximately $6,000,000 for the last three 

years.  See Exchange Act, Rule 3a51-1(g). 

B. Fun Cool Free 

12. Fun Cool Free was incorporated in Delaware on or about November 7, 2014.  Fun 

Cool Free has its principal place of business in Miami, Florida.  It is purportedly a distributor of 

software applications (“apps”).  Sizer was the president and a director of Fun Cool Free until 

August 2015.     

JURISDICTION AND VENUE 
 

13. This Court has jurisdiction over 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(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa(a)]. 

14. This Court has personal jurisdiction over the Defendants and venue is proper in 

the Southern District of Florida because many of the acts and transactions constituting the 

violations alleged in this complaint occurred in this District.  Moreover, Defendants reside in the 

Southern District of Florida and Sanomedics and Fun Cool Free had their principal offices in this 

District.   

15. In connection with the conduct alleged in the complaint, Defendants, directly or 

indirectly, singly or in concert with others, made use of the means or instrumentalities of 

interstate commerce or the mails. 

 

 

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THE FRAUDULENT SCHEME 

A. The Fraudulent Offer and Sale of Sanomedics Stock 

16. Beginning in 2009, Sizer acquired and gained control over a substantial number 

of shares of Sanomedics stock.  In 2009, Mesa operated unregistered boiler rooms in South 

Florida and Southern California.  Sizer engaged Mesa and Mesa’s boiler room operation to 

market and sell restricted shares of Sanomedics stock to the public.  At the time, Sizer knew that 

Mesa was not registered with the Commission as a broker or dealer. 

17. Beginning in 2009 and continuing until approximately mid-2014, Mesa 

supervised his boiler room sales agents as they solicited prospective investors, many of whom 

were elderly and unsophisticated, through cold calling, thereby raising approximately $18 

million from the sale of restricted common shares of Sanomedics stock.  Sizer provided Mesa 

pitch points to be used to sell the shares of stock, including a representation that no commissions 

would be paid on the purchase of Sanomedics stock.   

18. Mesa employed at least seven sales agents, purchased lists of contact information 

for prospective investors, and told the sales agents that they did not need to be licensed to sell the 

stock.  Mesa drafted sales scripts containing material misrepresentations and omissions, 

including misrepresenting that the sales agents were not paid commissions, and provided the 

sales scripts to the sales agents.  Mesa instructed sales agents to tell investors that their money 

would be used by the company for research and development.  At times, Mesa monitored the 

sales agents’ calls as they solicited prospective investors and directed them as to what to tell 

prospective investors.   

19. Acting on Mesa’s instructions, the sales agents offered and sold investors shares 

of restricted Sanomedics stock at prices set by Sizer and Mesa that ranged from $0.05 - $2.50 per 

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share.  The sales agents used high pressure sales tactics and promised lucrative profits.  For 

example, sales agents told investors that a limited number of shares of stock were available at a 

discount from the market price, guaranteeing them a considerable profit.   

20. Sizer and Mesa agreed that Mesa would instruct the sales agents to tell investors 

that there was no commission paid to the sales agents, when in fact, Mesa used between 15-20% 

of the investor funds to pay such commissions.  Sales agents, knowing they were paid 

commissions, either misrepresented to investors that there were no fees or commissions paid 

for the purchase of the Sanomedics stock or failed to disclose the commissions to investors.  In 

order to conceal and further the fraud, the sales agents used false names with investors and 

falsely told investors that they were employees of Sanomedics.  At times, sales agents falsely 

told investors that they were paid in shares of Sanomedics stock.    

21. Sizer also personally spoke with some investors.  Sizer marketed and sold 

Sanomedics stock to investors by making some of the same misrepresentations made by the 

boiler room sales agents.  Sizer and the sales agents falsely touted Sanomedics as a profitable 

investment that was raising investor funds to develop and grow its non-contact thermometer 

business.  Sizer also told investors that he was a large investor and co-founder of Sanomedics 

and falsely reassured them that Sanomedics was a good value and would likely rise in price.   

22. Sizer, Mesa, and the sales agents raised approximately $18 million selling shares 

of Sanomedics to more than 600 investors nationwide.  Sizer and Mesa split the approximate $18 

million, and Mesa paid 15-20% of the funds he misappropriated to the sales agents as 

commissions.  Sizer was aware and agreed to the payment of commissions to the sales agents.   

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B.  The Fraudulent Offer and Sale of Fun Cool Free Stock  

23.  By mid-2014, Sanomedics’ public share price had declined significantly making 

it difficult to continue the fraudulent offer and sale of its shares, so Sizer procured Fun Cool Free 

as another vehicle to continue the fraud scheme.  Sizer again engaged Mesa and his unregistered 

boiler rooms to solicit investors to purchase shares of Fun Cool Free stock.  As before, Mesa’s 

sales agents used high pressure sales tactics to offer and sell Fun Cool Free stock emphasizing 

that investors needed to act immediately or risk missing a lucrative opportunity.    And, as with 

Sanomedics, Sizer and the sales agents materially misrepresented to investors that Fun Cool Free 

investor proceeds would not be used to pay sales commissions.   

24. Sizer, Mesa and their sales agents raised approximately $1.4 million through the 

sale of Fun Cool Free shares to nearly 70 investors nationwide.  Sizer and Mesa split the 

approximate $1.4 million, and Mesa paid 15-20% of the funds he misappropriated to the sales 

agents as commissions.  Sizer was aware and agreed to the payment of commissions to the sales 

agents. 

 
COUNT I 

Fraud in the Offer or Sale of Securities in Violation of  
Section 17(a)(1) of the Securities Act 

(Against Sizer and Mesa) 
 

25. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint 

as if fully set forth herein. 

26. Beginning no later than 2009 and continuing through in or about August 2015, the 

Defendants, directly and indirectly, by use of the means or instruments of transportation or 

communication in interstate commerce and by use of the mails, in the offer or sale of securities, 

knowingly or recklessly employed devices, schemes or artifices to defraud. 

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27. By reason of the foregoing, the Defendants directly and indirectly violated, and 

unless enjoined, are reasonably likely to continue to violate, Section 17(a)(1) of the Securities 

Act, 15 U.S.C. § 77q(a)(1). 

 
COUNT II 

 
Fraud in the Offer or Sale of Securities in Violation of  

Section 17(a)(2) of the Securities Act 
(Against Sizer and Mesa) 

 
28. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint 

as if fully set forth herein. 

29. Beginning no later than 2009 and continuing through in or about August 2015, the 

Defendants, directly and indirectly, by use of the means or instruments of transportation or 

communication in interstate commerce and by the use of the mails, in the offer or sale of 

securities, negligently obtained money or property by means of untrue statements of material 

facts and omissions to state material facts necessary to make the statements made, in the light of 

the circumstances under which they were made, not misleading. 

30. By reason of the foregoing, the Defendants directly and indirectly violated, and 

unless enjoined, are reasonably likely to continue to violate, Section 17(a)(2) of the Securities 

Act, 15 U.S.C. § 77q(a)(2). 

 
COUNT III 

Fraud in the Offer or Sale of Securities in 
Violation of Section 17(a)(3) of the Securities Act 

(Against Sizer and Mesa) 
 

31. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint 

as if fully set forth herein. 

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32. Beginning no later than 2009 and continuing through in or about August 2015, the 

Defendants, directly and indirectly, by use of the means or instruments of transportation or 

communication in interstate commerce and by the use of the mails, in the offer or sale of 

securities negligently engaged in acts, transactions, practices and courses of business which have 

operated as a fraud or deceit upon purchasers and prospective purchasers of such securities. 

33. By reason of the foregoing, the Defendants directly and indirectly violated, and 

unless enjoined, are reasonably likely to continue to violate, Section 17(a)(3) of the Securities 

Act, 15 U.S.C. § 77q(a)(3). 

 
COUNT IV 

Fraud in Violation of Section 10(b) and  
Rule 10b-5 of the Exchange Act 

(Against Sizer and Mesa) 

34. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint 

as if fully set forth herein. 

35. Beginning no later than 2009 and continuing through in or about August 2015, the 

Defendants, directly and indirectly, by use of any means and instrumentalities of interstate 

commerce, and of the mails, in connection with the purchase or sale of securities, knowingly or 

recklessly:  (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of 

material facts and/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 upon the purchasers 

of such securities. 

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36. By reason of the foregoing, the Defendants directly and indirectly violated, and 

unless enjoined, are reasonably likely to continue to violate, Section 10(b) of the Exchange Act, 

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

 
COUNT V 

Unlawfully Operating as a Broker-Dealer 
Without Registering with the Commission in 

Violation of Section 15(a) of the Exchange Act 
(Against Mesa) 

37. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint 

as if fully set forth herein. 

38. Beginning no later than 2009 and continuing through in or about August 2015, 

Defendant Mesa acted as broker or dealer and made use of the mails or any means or 

instrumentality of interstate commerce to effect transactions in securities, or to induce or attempt 

to induce the purchase or sale of securities, without being associated with a broker or dealer that 

was registered with the Commission in accordance with Section 15(b) of the Exchange Act, 15 

U.S.C. § 78o(b). 

39. By reason of the foregoing, Defendant Mesa directly and indirectly violated, and 

unless enjoined, is reasonably likely to continue to violate, Section 15(a) of the Exchange Act, 15 

U.S.C. § 78o(a). 

 
COUNT VI 

Aiding and Abetting the Unlawful Operation of a  
Broker-Dealer not Registered with the Commission in 

Violation of  Exchange Act Section 15(a) of the Exchange Act 
(Against Sizer) 

40.  The Commission repeats and realleges paragraphs 1 through 24 of this complaint 

as if fully restated herein. 

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41. Beginning no later than 2009 and continuing through in or about August 2015, 

Defendant Mesa acted as broker or dealer and made use of the mails and any means or 

instrumentality of interstate commerce to effect transactions in securities, or to induce or attempt 

to induce the purchase or sale of securities, without being associated with a broker or dealer that 

was registered with the Commission in accordance with Section 15(b) of the Exchange Act, 15 

U.S.C. § 78o(b), and by reason of the of the foregoing violated Section 15(a) of the Exchange 

Act, 15 U.S.C. § 78o(a). 

42. Beginning no later than 2009 and continuing through in or about August 2015, 

Defendant Sizer knowingly or recklessly aided and abetted violations of Section 15(a) of the 

Exchange Act by Defendant Mesa.  Sizer also, directly and indirectly, had a general awareness 

that he was part of an overall activity that was improper or illegal and knowingly, or was 

extremely reckless in not knowing, and provided substantial assistance to violations of Section 

15(a) of the Exchange Act. 

43. By reason of the foregoing acts, Defendant Sizer aided and abetted and, unless 

enjoined, is reasonably likely to continue to aid and abet violations of Section 15(a) of the 

Exchange Act by Defendant Mesa. 

RELIEF REQUESTED 

 WHEREFORE, the Commission respectfully requests that the Court: 

I. 

Permanent Injunctive Relief 

 Issue a Permanent Injunction restraining and enjoining: (1) Defendants Sizer and Mesa 

from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and 

Rule 10b-5(a), (b), and (c) thereunder; (2) Defendant Mesa from violating Section 15(a) of the 

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Exchange Act; and (3) Defendant Sizer from aiding and abetting violations of Section 15(a) of 

the Exchange Act.   

II. 

Disgorgement 

 Issue an Order directing the Defendants to disgorge all ill-gotten profits or proceeds 

received from investors as a result of the acts and/or courses of conduct complained of herein, 

with prejudgment interest thereon. 

III. 

Civil Money Penalties 

 Issue an Order directing the Defendants to pay civil money penalties pursuant to Section 

20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d) of the Exchange Act, 15 U.S.C. 

§ 78(d). 

IV. 

Penny Stock Bars 

 
 Issue an Order pursuant to Section 20(g) of the Securities Act, 15 U.S.C. § 77t(g), and 

Section 21(d)(6) of the Exchange Act, 15 U.S.C. § 78u(d)(6), permanently barring the 

Defendants from participating in any offering of a penny stock. 

V. 

Officer and Director Bar  

 Issue an Order permanently barring Defendant Sizer from serving as an officer or director 

of any public company pursuant to Section 20(e) of the Securities Act, Sections 21(d)(2) and 

21(d)(5) of the Exchange Act. 

 

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VI. 

Further Relief 

 Grant such other and further relief as may be necessary and appropriate.   

VII. 

Retention of Jurisdiction 

 Further, the Commission respectfully requests that the Court retain jurisdiction over this 

action in order to implement and carry out the terms of all orders and decrees that may hereby be 

entered, or to entertain any suitable application or motion by the Commission for additional relief 

within the jurisdiction of this Court. 

Dated:  September 26, 2016 

      Respectfully submitted, 

 

  
         By: s/ Alejandro O. Soto     
      Alejandro O. Soto 

Senior Trial Counsel 
Florida Bar No. 172847 
Telephone: (305) 982-6313 
Email: [email protected] 

 
       
      s/Eric E. Morales 

Eric E. Morales 
Attorney 
S.D. Fla. Court ID No. A5500886 
Telephone: (305) 982-6210 
Email: [email protected] 

 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 

      801 Brickell Avenue, Suite 1800 
      Miami, Florida  33131 
      Telephone: (305) 982-6300 
      Facsimile:  (305) 536-4154 

Case 1:16-cv-24106-JAL   Document 1   Entered on FLSD Docket 09/26/2016   Page 14 of 14

mailto:[email protected]
mailto:[email protected]

	UNITED STATES DISTRICT COURT
	SOUTHERN DISTRICT OF FLORIDA
	CASE NO.: ________________________
	SECURITIES AND EXCHANGE COMMISSION, )
	)
	Plaintiff,    )
	1. The Commission brings this action against Craig V. Sizer and Miguel Mesa (collectively “Defendants”) for violating the antifraud and broker-dealer registration provisions of the federal securities laws and thereby defrauding at least 600 investors ...
	2. Beginning at least as early as 2009 and until August 2015, Defendant Sizer hired Mesa to operate boiler-rooms in South Florida and Southern California to sell shares of Sanomedics, Inc. (“Sanomedics”) and Fun Cool Free, Inc. (“Fun Cool Free”) (coll...
	3. Sizer, directly and through Mesa’s boiler room sales agents, and Mesa, through his boiler room sales agents, made material misrepresentations and omissions to investors in the Companies’ stock regarding the payment of commissions to the sales agent...
	4. Mesa also took active steps to conceal the boiler room operation by directing sales agents to falsely represent that they were employees of Sanomedics or Fun Cool Free.
	5. Sizer, directly and through Mesa’s boiler room sales agents, and Mesa, through his boiler room sales agents, also made material misrepresentations and omissions to prospective investors regarding the use of the funds provided by the investors.  Siz...
	6. Defendant Sizer used at least $3 million of misappropriated investor proceeds for his own personal benefit, including paying for personal expenses such as credit cards, residential renovations, luxury automobiles, and mortgage payments, and through...
	7. Moreover, because Defendant Mesa was not registered with the Commission as a broker or dealer, he acted as an unregistered broker in violation of the registration requirements of the federal securities laws when he offered and sold shares of the Co...
	8. Through their fraudulent conduct, the Defendants received millions of dollars of investor proceeds by violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”)...
	9. Sizer, age 48, a resident of Aventura, Florida, was the co-founder and former Chief Executive Officer of Sanomedics and the former president and chairman of Fun Cool Free.  Sizer was a registered representative formerly associated with the broker-d...
	10. Mesa, age 56, a resident of Miami Lakes, Florida, hired unregistered sales agents to offer and sell to investors the securities of Sanomedics and Fun Cool Free.  In 2004 and 2006, the Commodities Futures Trading Commission (“CFTC”) charged Mesa in...
	11. Sanomedics, f/k/a “Sanomedics International Holdings, Inc.,” is a Delaware corporation with its principal place of business in Miami, Florida. It is purportedly in the business of developing and selling non-contact infrared thermometers.  It becam...
	B. Fun Cool Free
	12. Fun Cool Free was incorporated in Delaware on or about November 7, 2014.  Fun Cool Free has its principal place of business in Miami, Florida.  It is purportedly a distributor of software applications (“apps”).  Sizer was the president and a direc...
	JURISDICTION AND VENUE
	13. This Court has jurisdiction over 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(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa...
	14. This Court has personal jurisdiction over the Defendants and venue is proper in the Southern District of Florida because many of the acts and transactions constituting the violations alleged in this complaint occurred in this District.  Moreover, ...
	15. In connection with the conduct alleged in the complaint, Defendants, directly or indirectly, singly or in concert with others, made use of the means or instrumentalities of interstate commerce or the mails.
	16. Beginning in 2009, Sizer acquired and gained control over a substantial number of shares of Sanomedics stock.  In 2009, Mesa operated unregistered boiler rooms in South Florida and Southern California.  Sizer engaged Mesa and Mesa’s boiler room op...
	17. Beginning in 2009 and continuing until approximately mid-2014, Mesa supervised his boiler room sales agents as they solicited prospective investors, many of whom were elderly and unsophisticated, through cold calling, thereby raising approximately...
	18. Mesa employed at least seven sales agents, purchased lists of contact information for prospective investors, and told the sales agents that they did not need to be licensed to sell the stock.  Mesa drafted sales scripts containing material misrepr...
	19. Acting on Mesa’s instructions, the sales agents offered and sold investors shares of restricted Sanomedics stock at prices set by Sizer and Mesa that ranged from $0.05 - $2.50 per share.  The sales agents used high pressure sales tactics and promi...
	20. Sizer and Mesa agreed that Mesa would instruct the sales agents to tell investors that there was no commission paid to the sales agents, when in fact, Mesa used between 15-20% of the investor funds to pay such commissions.  Sales agents, knowing t...
	21. Sizer also personally spoke with some investors.  Sizer marketed and sold Sanomedics stock to investors by making some of the same misrepresentations made by the boiler room sales agents.  Sizer and the sales agents falsely touted Sanomedics as a ...
	22. Sizer, Mesa, and the sales agents raised approximately $18 million selling shares of Sanomedics to more than 600 investors nationwide.  Sizer and Mesa split the approximate $18 million, and Mesa paid 15-20% of the funds he misappropriated to the s...
	B.  The Fraudulent Offer and Sale of Fun Cool Free Stock
	23.  By mid-2014, Sanomedics’ public share price had declined significantly making it difficult to continue the fraudulent offer and sale of its shares, so Sizer procured Fun Cool Free as another vehicle to continue the fraud scheme.  Sizer again enga...
	24. Sizer, Mesa and their sales agents raised approximately $1.4 million through the sale of Fun Cool Free shares to nearly 70 investors nationwide.  Sizer and Mesa split the approximate $1.4 million, and Mesa paid 15-20% of the funds he misappropriat...
	COUNT I
	25. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint as if fully set forth herein.
	26. Beginning no later than 2009 and continuing through in or about August 2015, the Defendants, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by use of the mails, in the offe...
	27. By reason of the foregoing, the Defendants directly and indirectly violated, and unless enjoined, are reasonably likely to continue to violate, Section 17(a)(1) of the Securities Act, 15 U.S.C. § 77q(a)(1).
	28. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint as if fully set forth herein.
	29. Beginning no later than 2009 and continuing through in or about August 2015, the Defendants, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by the use of the mails, in the ...
	30. By reason of the foregoing, the Defendants directly and indirectly violated, and unless enjoined, are reasonably likely to continue to violate, Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2).
	31. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint as if fully set forth herein.
	32. Beginning no later than 2009 and continuing through in or about August 2015, the Defendants, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by the use of the mails, in the ...
	33. By reason of the foregoing, the Defendants directly and indirectly violated, and unless enjoined, are reasonably likely to continue to violate, Section 17(a)(3) of the Securities Act, 15 U.S.C. § 77q(a)(3).
	34. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint as if fully set forth herein.
	35. Beginning no later than 2009 and continuing through in or about August 2015, the Defendants, directly and indirectly, by use of any means and instrumentalities of interstate commerce, and of the mails, in connection with the purchase or sale of se...
	36. By reason of the foregoing, the Defendants directly and indirectly violated, and unless enjoined, are reasonably likely to continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, thereunde...
	37. The Commission repeats and realleges Paragraphs 1 through 24 of this Complaint as if fully set forth herein.
	38. Beginning no later than 2009 and continuing through in or about August 2015, Defendant Mesa acted as broker or dealer and made use of the mails or any means or instrumentality of interstate commerce to effect transactions in securities, or to indu...
	39. By reason of the foregoing, Defendant Mesa directly and indirectly violated, and unless enjoined, is reasonably likely to continue to violate, Section 15(a) of the Exchange Act, 15 U.S.C. § 78o(a).
	COUNT VI
	40.  The Commission repeats and realleges paragraphs 1 through 24 of this complaint as if fully restated herein.
	41. Beginning no later than 2009 and continuing through in or about August 2015, Defendant Mesa acted as broker or dealer and made use of the mails and any means or instrumentality of interstate commerce to effect transactions in securities, or to ind...
	42. Beginning no later than 2009 and continuing through in or about August 2015, Defendant Sizer knowingly or recklessly aided and abetted violations of Section 15(a) of the Exchange Act by Defendant Mesa.  Sizer also, directly and indirectly, had a g...
	43. By reason of the foregoing acts, Defendant Sizer aided and abetted and, unless enjoined, is reasonably likely to continue to aid and abet violations of Section 15(a) of the Exchange Act by Defendant Mesa.

	I.
	Permanent Injunctive Relief
	II.
	Disgorgement
	III.
	Civil Money Penalties
	IV.

	Further Relief
	S.D. Fla. Court ID No. A5500886
	Attorneys for Plaintiff