SEC v. Joseph M. Laura

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Marc P. Berger
Lara S. Mehraban
Thomas  P . Smith,  Jr.
Kevin P. McGrath
Margaret D. Spillane
Attorneys f or   the   P la intif f
SECURITIES  AND EXCHANGE  COMMISSION
New York  Regional  Office
Brookfield   P lace,  200  Vesey  Street,  Suite  400
New York,  New York  10281
(212) 336-0533  (McGrath)
Email: mcgrathk @s e c.gov
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW  YORK
------------------------------------------------------------------------x
SECURITIES AND EXCHANGE COMMISSION, :
:
Plaintiff, :
:
:
-agains t-:
:
:
18 CV. 5075    (      )
E
CF Case
COMPLAINT AND
JURY DEMAND
JOSEPH M. LAURA,  :
ANTHONY R. SICHENZIO, :
and WALTER GIL DE RUBIO, :
:
De fe ndants .      :
------------------------------------------------------------------------x
Th
e Securitie s  and  Exchange  Commiss ion  (“C omm is s i o n” or “SEC”)  alleges  as
follows   for  its    Compla int  against  defendants Joseph   M.  Laura  (“Laura”),   Anthony R.
Sichenzio  (“Sichenzio”)  and Wa lte r    Gil   de   R ubio  (“Gil  de Rubio”) (collectively,
“Defendants”):
SUMMARY
1.This  enforcement   action  involves a scheme by  defendants   Laura,  Sichenzio
and  Gil   de  Rubio  to defraud  investors   and  misappropr iate   and  misuse  investor   funds.    From

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at least June  2013 through   January  2017, Defendants raised  more  than  $3.7  million   from  at
least 80 investors   through   the  fraudule nt  offer and sale of securities of Pristec America,  Inc.
(“PAI”),   a  U.S.  company   incorporate d   by  Laura,  and  Pristec  AG  (“PAG”),  an  Austrian
company   that  had  rights  to a crude  oil  processing  technology.    Many   of  these  investors   were
social   and  business  acquaintances  of  the  Defendants  who were led  to believe  they were being
offered   a   special   opportunity   available   only   to   “friends   and   family.”
2. Throughout   the  relevant   period,   the  Defendants  offered  and  sold  s e c ur itie s    in
the  form  of  revenue  sharing,   stock  purchase  and  convertible   loan  agreements,   which  Laura
both drafted  and  signed,  and Sichenzio   signed.   These  investme nt contracts and  Defendants’
oral   solic itat i on   of   investors   contained   a variety of fraudulent misrepresentat i ons   and
omissions  of  material  facts concerning   the  purported  oil  processing  technology,   how
Defendants would   use  investors’   funds,   the  financia l  condit ion of  P AI  and Defendants’
purported investme nts   in  it.   The  revenue  sharing   contracts  also  contained  baseless  and/or
unreasonably optim is t ic   projections   concerning   the   timing   and   amount   of   investment   returns
investors   could   expect to realize.
3. Of  the  more  than  $3.7  million   that  the  Defendants  raised  from  investors   since
June  2013,  less  than  half  of  it    went  to  legitima te   business   uses.    Laura misappr opr iate d and
mis dir e c ted the  rest  of   it  for  his  personal  use  --    to pay his  personal  expenses  and  personal
loans.    He  also  directed  substantia l   amounts   of  these  investor funds   to  Sichenzio   and  Gil   de
Rubio for  reasons  unrelated   to  P AI’s  business.
4. Sichenzio, who held  various  corporate  positions  at PAI and  indirect ly   owned
part  of  it,  and  Gil   de  Rubio,  were aware of or recklessly  disregarded  Laura’s

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misappr opr iat i on and  misuse   of  funds,  in  part  because Laura had improper ly given  P AI
investor   funds   to  each  of  them.   Sichenzio   and   Gil   de   Rubio   solicite d   investors   into  the
scheme  without   disclos ing   Laura’s  misappr opr iat i on or  their  own  trouble d   financia l   histories
with  Laura,  and  aided  and  abetted  Laura’s  misstatements.
5. To  date,  despite  raising   more  than  $12  million   from  over  150  investors   since
2010, during which time   they  repeatedly   claimed   that  revenue  generating   contracts  were
immine nt ,  the  Defendants   have  failed  to  generate  any revenue for  their  investors  from
commercializing the  crude  oil   technology.   The  only   beneficiar ies   of  Defendants’   long-
standing   scheme  to  defraud  are  themselves.
    VIOLATIONS
6. By  engaging   in  the  conduct   described   in   this  Compla int ,  Laura violate d
Section   17(a)  of  the  Securities   Act  of  1933   (“Securities  Act”)  [15  U.S.C.  §  77q(a)],  and
Sections  10(b)   of  the  Securities   Exchange   Act  of  1934   (“Exchange   Act”)  [15  U.S.C.
§78j(b)] ,  and  Rule  10b-5   [17 C.F.R.  § 240.10b-5]  thereunder,  and violated   Section   15(a)(1)
of the Exchange Act  [15  U.S.C.  §  78o(a)(1)].   Unless  restrained  and enjoine d,   Laura  w ill
engage  in  future  violat ions  of  these provis ions.
7. By  engaging   in  the  conduct   described   in   this  Compla int ,  Sichenzio   and  Gil   de
Rubio violate d   Sections   17(a)(l)   and  (3)  of  the  Securities   Act  [15  U.S.C.  §§ 77q(a)(l)
and(3)],  and Section  10(b)  of  the  Exchange  Act [15 U.S.C. § 78j(b)] ,  and R ule s  10b-5(a)  and
(c) [17  C.F.R.  §§  240.10b-5(a)   and  (c)]  thereunder,  and  aided   and  abetted   Laura’s  violat ions
of  Section   17(a)(2)   of  the  Securities   Act  and  Section   10(b)   of  the  Exchange   Act  and  Rule
10b-5(b) , and  unless  restrained  and enjoine d,  w ill engage  in  future  violat ions  of  these

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provis ions.
 NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
8. The  Commission   brings  this  action  pursuant  to  authority  conferred  by  Section
20(b)  of  the  Securities  Act  [15  U.S.C.  §  77t(b)]  and  Section  21(d)(1)  of  the  Exchange  Act  [15
U.S.C. § 78u(d)(1)].  The Commission  seeks to restrain and permanently  enjoin  the Defendants
from engaging  in the acts, practices, transactions,  and courses of business  alleged  herein.  In
addition,  the Commission  seeks a final  judgment  (i) ordering  the Defendants to disgorge  their ill-
gotten  gains,  together  with  prejudgment   interest  thereon; and (ii)  ordering  the Defendants to pay
civil  monetary  penalties  pursuant  to  Section  20(d)  of  the  Securities  Act  [15  U.S.C.  §  77t(d)]  and
Section  21(d)(3)  of  the  Exchange  Act  [15  U.S.C.  §  78u(d)(3)].
 JURISDICTION  AND VENUE
9. The  Court   has  jurisdic t ion   of  this  action  pursuant  to 28  U.S.C.  § 1331,
Section 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  of  the  Exchange   Act  [15  U.S.C.  §§ 78u(d),
78u(e)  and 78aa].
10. Venue  is  proper   in  the  Eastern District  of New York pursuant  to  28 U.S.C.
§ 1391(b)( 2) , Section   22(a)  of  the  Securitie s   Act  [15  U.S.C.  §  77v(a)]   and  Section   27  of  the
Exchange   Act  [15  U.S.C.  §  78aa]  because  many  of  the  acts,  transactions,   practices  and
courses   of   business   constitut ing   the   violat ions   occurred   in   this   district.    For  example ,  Laura
solicite d   investors   in  the  Eastern   District   who  were  offered   and  purchased   securities,  and
PAI lis te d   its   pr inc ipa l  office  in  Staten  Island  in  various   investme nt   contracts.   Laura a ls o

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maintaine d a Staten  Island   bank  account  for  PAI,  maintained certain books   and  records   of
P AI in  an office  in  Staten  Island,  and hired a Staten  Island  accountant  for P AI.
11. In connection w ith  the conduct  alleged  in  this  Compla int ,  Defendants
dir e c tly  or indirectly  made use of the means or instrumentalities  of interstate  commerce,
the  means  or  instruments  of  transportation and communication  in  interstate  commerce,  and
the ma ils .
12. Defendants’ conduct involved  fraud, deceit, or deliberate  or reckless disregard
of regulatory   requirements,  and  resulted  in  substantial   loss,  and significant  risk of substantia l
loss,  to  other  persons.
DEFENDANTS

13. Laura, age 56,  is  a  resident  of  Spr ing f ie ld ,  New Jersey.   Laura  is  an  attorney
registered   in  New  York  and  on  retired  status  in  New  Jersey.   Laura  founded  P AI and,  during
the  majorit y   of  the  relevant   period,  he controlle d  P AI  and  held  multiple  corporate  titles,
includi ng   CEO,  P resident,  Treasurer   and  Chairman   of  the  Board.     Laura  has  no  training   in
science  or  physics   and  had  no  background   in  the  oil   business   before  becoming   involve d   in
PAI.
14. Siche nzio, age 56,  is  a resident  of Warren,  New Jersey.   During   the
relevant  period,   Sichenzio   held  multiple   officer  roles  with  P AI,  including   Vice  Chairman,
Vice  President,  and Secretary,  and was also  a Director.    Sichenzio  has been associated
w ith  various registered broker-dealers  for  over  30  years.  Sichenzio  w a s   a f f ilia te d   w ith  a
registered  broker-dea ler   in  New  York  City from October  2010 through   the  present,
includi ng during the  time  he  engaged   in  the  fraudulent   conduct  set forth  in  this

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Compla int.
15. Gil  de  Rubio, age 65,  is a resident  of Freehold,  New Jersey.  Gil   de  Rubio
owns,  in  whole   or  in  part,  several  New Jersey-based  companies  engaged  in real estate,
construction   and   landscape   contracting.      Gil  de  Rubio  raised  substantia l  amounts  of
monie s    s e lling   P A I ’ s   s e c ur itie s  to  investors   and  received  substantia l   amounts   of  investor
funds  from  P AI.
BACKGROUND OF THE RELEVANT ENTITIES
16. PAG  is  a  private  Austrian   company   founded   in  2006  for  the  purpose  of
crude   oil   processing   technology   developme nt ,   licensing   and   commercia l izat i on.    P AG
had certain  intellect ua l   property  rights,  w hic h  were  in  the  process  of  being   patented,   to  an
applicat ion for   “c old-cracking,”  a heavy  oil  processing  method that uses  pressure  wave
emissions  to  purportedl y change  the  molecular   compos it ion   of  heavy   oil   compounds.
Laura  was  introduced   to  P AG  in  or  around   December   2008.
17. Innovative   Crude   Te chnologie s, Inc. (“ICT”).    Laura  origina lly
incorpora te d an  entity  named  Pristec  America,  Inc.  in  New  Jersey  in  February   2010 for
the  purported   purpose   of  providi ng   “consult ing   services.”      In  October   2010,   Laura
renamed  this  entity  ICT.    During   the  relevant  period,   Laura  and  Sichenzio  each owned
50%  of  ICT.    In corporate  documents,   Laura  listed   the  purpose   of  ICT  as  “O il
Technology   Consulta nt.”   In  early  2011,  pursuant  to  a  purporte d  financing  contract
between  ICT  and  P AG,   ICT  acquired   an  equity   interest   in  P AG.   Accordingly,  during
most   of  the  relevant   period,   Laura  and  Sichenzio  together owned  33%  of  P AG  through
ICT.   The  rest  of  P AG  was owned primaril y by  European   investors.    In  February   2016,

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P AG  increased   its  outstanding   shares,  reducing   ICT’s  ownership   of  P AG  to
approxima te ly   23.3%.
18. Pris te c Ame rica,  Inc. (“PAI”).    In  September  2011,  ICT  and  PAG
incorpora te d   a  new  New  Jersey  entity  named  Pristec  America,  Inc.  (“P AI-NJ”), of  which
they  each  owned   50%.    In  September   2013,   ICT  and  P AG  incorporate d an  entity in
Nevada also  named  Pristec  America,   Inc.  (“P AI-NV”) that  was  also  joint ly   owned   by  ICT
and  P AG.  This   Compla int   uses  “P AI”  to  refer  to  both   P AI  entities.     At  this   time,  the
purpose  of  PAI was described  as a “strategic  alliance  partner”  to PAG responsible for
business   developme nt   and  introduct ion   of  the  technology   in  the  U.S.,  Canada,   Mexico
and  Columbia.    P A I   its e lf   had  no  independe nt   research,  developme nt   or  manufactur ing
operations.     It  had  no  offices   and  no  actual   employees.
FACTS
A. B ackground of Re lations hips  Among De fe ndants

19. Laura   introduce d   Sichenzio   to   P AI   in   April   2010 shortly   after  he
incorpora te d   it.    At  the  time,   Laura  owed  Sichenzi o   at  least  $1.3  milli on   arising   from   a
failed  real estate venture  and from loans   Sichenzio   made  to  Laura  for  his  personal   use.
Laura  convinced   Sichenzio   to  become  involve d   in  P AI,  in  part,  as  a  potentia l   means  for
Sichenzio   to  recover  the  monies   Laura  owed  him.    In  2010,   Sichenzio  provided about
$918,000   to  Laura  through  Laura’s attorney  trust  account,  with  the  understandi ng   that
Laura  would   use  some  of the  money   to  purchase  ICT’s  equity  interest  in  P AG  and  that
Laura could use  the  remainder   of  these  funds  as he chose w ithout   restriction.
20. Laura  introduce d  Gil   de  Rubio  to  P AI  in  2010.     At  the  time,  according   to

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Gil   de   R ubio,   Laura  owed  Gil   de  Rubio  at  least  $1  milli on   in   connection   a  Piscataway,
N.J.,  real estate project,  1530  Glenwood  P roperties  LLC  (“1530  Glenwood”).   Gil  de
Rubio acquired  part  of  1530   Glenwood because  Laura’s  credit  rating prevented  the
project  from  obtaining  loans,  and  based on  Laura’s  commit me n t to  take  responsibi lit y   for
any  liabilit ies   arising   from  his  time  managing  1530  Glenwood.   Laura,  however,  failed  to
pay  Gil  de  Rubio  and  the  other  contractors  to  whom  he  owed  money.
21. Separately,   Laura  owed  Gil   de  Rubio   and  his  family   $850,000   in
connection   with  personal   loans  and  other  unsuccessful   business   ventures.    Gil   de  Rubio
had  no  documente d   equity   interest   in  P AI,  but,   according   to   Gil   de   Rubio,   Laura
promise d Gil  de Rubio that  he  would   eventually   give   him   a  percentage   of  the  company.
Gil   de  Rubio   also   believed   that  the  only   way  Laura  would   be  able   to  compensate   and
repay him  and  his  family   for  their  losses  and  loans  was  through   P AI.
B. De fe ndants   B e gin Soliciting  Inve s tme nts Through  Fals e  Pre te ns e s
22. The Defendants  made little  distinction  between  the two active  Pristec
America  entities  and used  them  interchangea bly   in  dealings   with  investors.     For  example,
Laura  drafted  investment   contracts  under  the  name  of  “Pristec  America,   Inc.,”  described
as  “a  corporation   created  under   the  laws  of  the  State  of  New  Jersey”  during   late  2010   and
early  2011,   when  no  such  corporation   existed.    After  P AI-NV  was incorporate d,  some
contracts  described  P AI as a New Jersey corporation  but  provide d  a Nevada  address;
other  contracts  referred  to  the  Nevada  corporation   but  used  a  Staten  Island  address,  and
some contracts  directed  payments  to be made to ICT “d/b/a  Pristec America.”
23. In  or  around   August   2010,   Laura  and  Sichenzio   began  solic it ing   money

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from  a  large   number   of  investors ,   many   of  whom   ultima te ly   signed   or  agreed  to
investme nt   contracts.      Laura   and   Sichenzio   misled   these investors in  a variety  of ways.
For  example,  they  falsely  c la imed  that  P AI  owned  and  had  exclusive worldw ide   rights  to
profit  from  the c old-cracking technology.  In  fact,  PAI  had  no license to  use  PAG’s
technology until  2014,  and  that  license  granted  only PAI-NV exclusive  rights  in  only
countries ,   the   U.S.,  Mexico,   Canada  and  Colombia ,  with  non-exclus ive   rights  elsewhere.
24. Second, Laura  and  Sichenzio  made baseless  claims  regarding  the  projected
amount   and  timing   of  revenue  investors  would  receive.    For  example,  the  majorit y   of  the
revenue  sharing  contracts promised PAI investors   a  set  payoff   per  oil  barrel  processed
and  contained   schedules showing   product ion   dramatica lly   increasing.   Some  contracts  set
forth  increases  from  10,000   barrels/day   in  month  1  to  200,000   barrels/day   in   month   13,
with  profits  continuing   at  that  rate for at least five  years  in  some  contracts,   and  even
longer in  others.
25. In  truth,  during both the  2010-2013   and  the  2013-2017   periods  no  contracts
for   commercia l   oil   product ion   actually   existed.  Further,   during   the  2010-2013 period  P AI
had  no  license   to  the  technology   and  P AI   investors   had   no   contractual   right   to   any
revenues   that  P AG  might   generate  from  the  technology.
26.   According   to  the  CEO  of  P AG,   there  was  no  corporate   action   authorizi ng
P AI,  or  Laura  or  Sichenzio,   to  enter  into   revenue   sharing   contracts,  and  any  U.S.
investme nts   were  expected   to  be  in  the  form  of  convertible   loans.
27. Laura drafted and  was a signator y,  as PAI’s Chairma n  or  President, on  a ll
of the  investme nt   contracts;  Sichenzio,  as  PAI’s  Vice  Chairman,  was  also  a  signatory  on

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many   of  these  contracts;  and  Gil   de  Rubio   was  a  signatory   on  certain contracts  for
investors   he   solicite d.
28. Multiple  statements  in  the contracts  were untrue.  Most signif ica nt ly
mis le a d in g  were statements c la iming  that  funds  would   be  used  for  working   capital
purposes   and  that  full-scale  commercial  oil  processing   was  expected  to  begin  immine nt ly.
I n  r e a lity,  P AI  had  no  contractual   arrangements   for  commercia l   oil   production.   And,
from   the  very  start,  Laura  commingle d,   misappropr iate d   and  misused   millions   of  dollars
of  investor  funds.
29. For  example,  a revenue  sharing  contract  with  Investor  A,  dated  June  2011,
stated  that  Investor   A’s  funds   would   be  used  to  build   two  carbon   activator   units   and  that
liens   would   be  filed   on  the  units   as  collatera l   for  the  investme nt.     These statements  were
false,  as  no  new  units  were  ever built,   and  liens   were  already   in  place  on  the  existing
activator  units  securing  pre-existing   debt.
30. In fact, Laura a lmos t  immedia te ly   misappropr iate d   the  majorit y   of  Investor
A’s  money   for  other  uses.    Investor  A wired   $500,000   to  P AI’s  bank  account   on  June  7,
2011.    By  the  next  day,  June  8,  2011,   Laura  had  depleted   the  entire  pre-existing  balance
in  P AI’s  account  ($18,000).     That  same  day,  Laura  promptly   began  spending   Investor  A’s
money   by  sending   $133,000   of  those  funds   to  Sichenzio,   $15,000   to  a  friend   and  $10,000
to  himself.     The  follow ing   day,  June  9,  2011,   Laura  used  $50,000   of  Investor   A’s  money
to  repay  a  June  6,  2011  infusion   of  $50,000 from  Gil   de  Rubio   that  Laura  had  used
primaril y   pay  for  a luxur y  suite at  the  Meadowlands   Stadium   and  for  concert  tickets.
Laura  used  Investor   A’s  money   the  follow ing   month  to  pay:   $170,000 in  cash  and

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transfers  to  himself;  $25,000 to  a  white  collar  defense  lawyer;  over  $15,000   in  other
personal  expenses  such  as liquor,  gym fees,  sporting   goods   and  gas;  and $22,000  to  other
friends  and associates.
31. The  Defendants  directed  investors  to  write  checks,  or  wire  funds,  primarily
to  two attorney  trust  accounts  associated  with  Laura’s  Staten  Island   law  partnership and
to  a P AI   business   checking   account.    Laura  controlle d   the  movement   of  P AI  funds   into
and  out  of  these accounts,  and  was the sole  signatory  on  the P AI account.    Sichenzio   and
Gil  de Rubio  were aware of the  amount  of  investor  funds  being  raised  because  they
he lped  Laura  s olic it   inve s tor s ,   induce   these  investors   to  sign   contracts,  and  collect   funds.
By  April   2013,   the  Defendants   had  raised   over  $8.5  million   from  approximate ly 70
investors.
C.   Laura  M is appropriate s   Inve s tor Funds
32. During   this  period,  Laura misappr opr iated    over  $4  million   of  the  $8.5
milli on   of   P AI  investor   funds,  including  approximate l y $1.8  million  that  Laura
transferred  to  his   personal  accounts,  withdrew in  cash  or  pa id  hims e lf   in  checks  written to
cash;  and  over  $1.3  million   in  personal   expenditures ,   including   almost   $340,000   for
entertainme nt,   including   luxury   suites   at   various   sports   stadiums ,   tickets   to   other   sporting
events  and  live   shows,   and  payments   to  casinos;   over  $250,000   in   payments   to  purported
consultants   or  other  individua ls   and  entities   who,   in  reality   were  acquaintances   of  Laura
who  provide d   no  (or  nomina l)   goods   or  services   to  P AI;  $84,000   in  rent,   deposits,
moving   expenses  and  home-maintenance  fees, including  for Laura’s personal  home;
$15,000   in  payments   made  to  Laura’s  “Fast  Break  Basketball   Center”  business;   and

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$3,500   in  payments   for  educationa l   expenses  for  Laura’s  college-age d   child.    Laura a ls o
transferred  approxima te ly  $1 millio n  of  investor   funds  to  Sichenzio.
33. Of  the  remaining  approximate ly $4.4 milli on  in  investors’   funds,  only
$2.67  million  was wired  to PAG.   About  $300,000  was returned to   origina l   investors   who
demanded   their  money   back,  and  those  repayments  appear  to  have  been  made  from
subsequent   investors’   funds.
34. Laura subsequent ly told an  accountant for  PAI  that he  had  “borrowed” a
large amount of  investor   funds  for  his  personal   use  and  intended   to  pay  these  amounts
back.  Laura,  however,   minimi ze d   the  amount   of  money   he  had  “borrowe d,”   claiming   it
was approximate ly  $1 milli on.   Laura did  not  repay  any  of  this  money  to  P AI,  nor  did  he
report   any  of  the  funds   he  misappr opr ia ted   from   P AI  as  wages  or  salary.
35. No  later  than  September   2011,   the  Defendants   began  to  receive   complaints
from   P AI   investors ,   including   Investor   A,   as well  as requests   for  accountings   of  how  their
money   had  been  spent.
36. From  2011  through  the  end  of  May  2013,  Laura  transferred  over  $1  milli on
in  P AI  investor   funds  to Sichenzio’s  personal  bank  account.    Sichenzio  knew  or
recklessly or  neglige nt ly  disregarded that Laura  was misappropr iat ing   P AI  investor   funds
because he was aware that PAI was earning  no revenues  at this  time.  In  addition   to  the
$1  millio n  Sichenzio   received  from  Laura,  Sichenzio   directly   misappropr iate d   $60,000
from two P AI investors  by  deposit ing   their  investme nts  into  his  personal   bank  account
and  using  the  money  for  personal  expenses.
37. During   this   period,   Gil   de   Rubio   loaned  money  to  Laura for  personal   use.

13

At Gil   de   R ubio’s  request,  Laura agreed  to  repay  these  monies   from  investor  funds.    A
number   of  investors  were never  informe d that  the ir   money would  be  used to  repay  Gil   de
Rubio for personal   loans   he  made  to  Laura.
38. By at least  October  2011,  Gil   de   R ubio  was aware,  or  recklessly  or
neglige nt ly disregarded,  that  Laura could   not  account  for,  or was misdirec ting, large
portions   of   P AI   investme nt   funds.    D ur ing  this   time ,  Gil  de   R ubio  s e nt  mult ip le   e ma ils
reflecting his   understanding that  Laura  could   not  account   for  investor   funds,   and
acknowledging   his   responsibil it y   for   those  funds.    For  example ,   in  February  2012,  Gil  de
Rubio emailed   Laura  about  requests  from  P AG  for  funds  to  pay  development   expenses.
He  wrote:  “I’m  not  certain  where  you  spent  the  previous   money   I  sent  and  I’m  not  sure
why  you  are running  short.   P lease  respond   and  let  me  know  a  break  down  on  what  you
have  spent  so  far.    As  you  know   I  am  responsible   for  all   money   raised  here  in   the  U.S...”
39. In  at  least  January,   February,   March,  October  and  November   of  2012,  Gil
de  Rubio   received spreadsheets  from  the  CEO of  P AG  showing funds   P AG  had  received
from  PAI.  These spreadsheets reflected that  Laura failed   to  send  P AG a   s ignif ic a n t
amount   of  the  investor   funds   that Defendants  had  raised.    Gil   de  Rubio,   acknowledging
the  signif ica nce   of  these  payment  shortfalls,   suggested   that  the  CEO of  P AG  speak  to
Sichenzio.      And  in  September  2012,  Gil  de  Rubio  received  an  email  forwarded  by  the
CEO  of  P AG  discussing  concerns about  potentia l  PAI  shareholder   litiga t ion   if  investors
learned  that “Joe  [Laura]  has  taken  huge  commiss i o ns...”
40. As further  evidence  that Gil   de  Rubio  knew  that Laura was  using   P AI
investor   funds  for  imprope r   purposes,  in  March  2012,   Laura  provide d   P AI  funds  to  Gil   de

14

Rubio’s   company   as repayment  for  personal services Gil   de   R ubio  provided   Laura
unrelated   to  P AI.   By  July   2012,   Gil   de  Rubio   was  aware  that  Laura  had  directed   the
majorit y   of  a  $200,000   investme nt   in  P AI  to  Sichenzio   for  his   personal   use.    And  in
September   2012,   Laura  provide d   Gil   de  Rubio   with  P AI  funds   for  the  purpose   of
repaying a personal debt  to  Gil   de    R ubio’ s    s is ter.
41. On  May  1,  2013,   only   $311.94  was left  in  P AI’s  bank  account,  P AI owed
at least  $400,000 in  outstanding convertible  loans  to  investors,  plus  interest,  and PAI
owed an  unknown   amount   of  debt  incurred   by  Laura.   Neither   P AI  nor  P AG  had  yet
entered  into  a commercial  contract  for  use  of  the  c old-cracking technology.   Laura  and
Sichenzio   explaine d   to   Gil   de   Rubio   that   PAI  was “over”  unless they could  raise
additiona l   funds.
D. De fe ndants’   Solicitations    of  Inve s tme nts   fro m June 2013 through January  2017

42. Between June  2013  and  January  2017,  the  Defendants  raised  $3.7  milli o n
from approximate l y 80 indivi dua ls   to  whom   they  offered securities   of  P AI  and  P AG.
These  securities   were  in   the  form  of  revenue  sharing,  stock  purchase   and  convertible   loan
agreements.    The  majorit y   of  the  investme nts   were  in  revenue  sharing  agreements  in
amounts   ranging   from   $2,500   to   $310,000.    Many   of  these individua ls   were
inexper ience d   investors   and/or   of  modest   wealth   and  income ,   including  barber  shop
employees ,   construction   workers   and   tradesmen,   an   HVAC   technicia n   and   a   retired
police  officer.    Defendants   led  many   of  these  investors   to  believe   they  were  being   offered
a   unique   and   valuable   investment   opportunit y   available   only   to   “friends   and  family.”
43. Laura  drafted  and was a signator y on  all   the  revenue  sharing,   convertible

15

loan  and  share  purchase  contracts.    Sichenzi o was a signatory on these agreements
through at least mid-2014,  in  his  capacity  as  a PAI officer.
44. The  major it y   of  the  investme nt  funds  were deposite d,  or  w ir e d,  into and
then pooled   in  one  of  several  bank  accounts  in  the  name  of  P AI-NJ, ICT,  and PAI-NV,
includi ng   bank  accounts  in  Staten  Island   through   at  least  May  2014.   Laura  had  control
over,   and  was  the  sole  signator y   on,   these  accounts  at all  relevant  times.    Sichenzi o   and
Gil   de  Rubio  s olic ite d  investor funds  and  directed  investors   to  write   checks  or  wire  funds
to  these  accounts.
E. Fals e  State me nts   about  the  Us e  of  Inve s tme nt Proce e ds  and De fe ndants ’
M is appropri atio n  and  M is us e  of Inve s tor Funds

45. Laura  controlled  the  flow  of  funds  into   and  out  of  the  P AI  and  ICT
accounts.    Each of the investment  agreements made  representations   about  how  investors ’
funds  would  be used.   Specifica lly,  all  of  the  contracts  stated  that either PAI (referring  to
either  the New Jersey or Nevada corporation) or “Pristec”  (defined  as PAI and  PAG,
collective ly) was in  need  of  financing for  “working   capital”   in  order “to  fund  the
internationa l   roll-out   of  [its  ]  patented  technology.”
46. Laura  also  made  specific   verbal  misrepresentations   to  various   investors
about   the  use  of  funds,   claiming   to  many   investors   that  funds   would   be  used  to  buy   or
build   the  units   or  compone nts   that  housed  the  technology.     For  example,  Laura  made  the
follow ing   misrepresentat ions   to   investors   prior   to   their   investments:
a. Laura  told  Investor  C that  funds from  his  investme nt  would   be  used  for
machinery.  Investor   C  invested   on  or  about  June  5,  2014.
b. Laura  told  Investor  D that  the  money  from  his  investme nt  would   be

16

used  to  procure   or  build   cold-cracking  units,  or  would   be   spent  on
lawyers,   patents  and  accountants.     Investor  D first  invested   on  or  about
June 10,  2014,  and  invested   additiona l   funds   in  January   and  May  2015.
c. Laura told Investor E that  his  funds   would   be  used  for  the  expansion   of
the  technology   and  to  build   equipme nt.    Investor   E  invested   on  or  about
June  12,  2015.
d. Laura  told  Investor  F that  investor   funds  would   be  used  to  build   cold-
cracking  machine  demonstrat i ons  in  Europe.    Investor  F invested  on or
about  June  20,  2016.
47. Gil  de   R ubio  ma de   s imila r   misrepresenta t ions  about   the  use  of  funds,
omitt ing   to  disclose   what  he  knew  about  Laura’s  misappropr iat ion  and  other  red  flags   of
financia l  misconduc t.    For  example,  Gil  de Rubio made  the  follow ing   misrepresentat ions
to  investors   prior   to  their  investments:
a. Gil  de  Rubio  told  Investor G  that  the  funds   would   be  used  to  buy   or
build   more  equipme nt.     Investor  G  invested  on  or  about  April  24,  2014.
b. Gil  de  Rubio  told  Investor H  that his   money   would   be  used  to  put  units
together   for  trial   runs.    Investor   H  invested   on  or  about  June  5,  2014.
c. Gil  de  Rubio  told  Investor I  that his   funds  would  be used for  patents
and attorneys’   fees.  Investor I  first  invested  on  or  about  November  10,
2014,   and  invested   additiona l   funds  later  in  November   and  December
2014.
48. In truth, no  units   were  purchased   or  manufacture d   during   the  relevant

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period.   Moreover,  contrary  to  the representations  made,  a   signif ica nt   portion   of   the
investors’   funds   raised  during   this  period  were used  to  pay  for  Laura’s  personal  expenses,
to  make  payments   to  Sichenzio   and  Gil   de  Rubio and to  pay  for  businesses  and  debt
unrelated   to   PAI’s purporte d   oil   processing   technology   activit ies.
49. From mid-Ma y   2013  through   January  2017,  Laura  misappr opr iate d
approxima te ly   half  of  the  investor   funds  he  raised.    He  also  misappr opr iate d   proceeds
from  a  joint   venture  partner  of  P AI (the “JV Partner”).    In  total,   Laura  misappr opr ia te d  at
least  $3.7  million  from  P AI  accounts   for  his  personal   benefit,  for  the  benefit   of  his   family
and  other  associates,  to  pay  non-bus iness   expenses,   and  for  the  benefit   of  Sichenzi o   and
Gil   de   R ubio.
50. First,  Laura  directly   took  about  $1.1  million   through  transfers  to  his
personal   accounts,   cash  withdrawa ls   and  checks  written   to  himself.
51. Second, Laura  misappropr iate d an  additiona l   approxima te ly  $2  million  that
he  spent  for  his   own  benefit  or sent to individua ls   and  entities  who provide d   no
documente d   services   to  P AI  in  the  relevant   period.  For  example,   Laura  spent  or
transferred:
a. $440,900  to various  individua ls  and entities  who provided  no documented
services or goods  to P AI.  Laura  subsequent l y   admitted   that  some  of
these  individua ls   were  contractors   related  to  1530   Glenwood,  which
was  owned  by  Gil   de  Rubio,   Laura’s  sister,  and  Laura’s  close  friend;
b. $220,000   to   settle   a   lawsuit   brought   against   Laura,   1530   Glenwood   and
Laura’s  close  friend,   alleging  a real  estate-based scam;

18

c. $170,000   to  an  indivi dua l  and  his   company,   both   of  which   were
connected  to  that  same  real estate scam;
d. $213,800   to  an  indivi dua l  (and  his  purported   consult ing   company)  who
a llegedly introduce d   Laura  to P AI but  provide d  no documente d services
during   the  relevant   period;
e. $113,100 to a friend, who Laura claimed  functioned as Laura’s
personal  driver;
f. $87,464. 35 to insurance  and  medical  companies  for  expenses  for
himself ,   his  family   and  others;
g. $46,600   on  dining   and  travel  having   no,  or  only   pretextual,  relation   to
PAI business – which   does  not  include   hundreds   of  thousands  of  dollars
Laura  and  Sichenzio  spent  on  first  class  travel  and  luxury
accommodat i ons  at times  when  P AI was struggling  to stay  afloat;
h. $35,700  to Ally  Financial  and other entities  for personal  loans;
i. $24,200   on   retail   expenses,   including   groceries,   clothing   at   the   large
r e ta il  s tor e,  flowers  and  party  supplie s;
j. $17,250  on his  college-aged  child’s  education;
k. $13,500   on  rent  for  his  personal   residence;  and
l. $12,700   on  fees  paid  to  health   clubs  and  gyms;  $10,000   on  automobile
expenses,  including   EZ-P ass  and  gasoline.
52. Defendants’  misappropr iat i on  a ls o  include d   deposit ing   certain   investor
funds  directly   into  their  personal  bank  accounts.

19

a. On  April   7,  2015,   Laura  deposited  into  his  personal  account  $10,000
from   an  investor   that  should   have  gone   to  P AI  and  then  spent the
money on  cash  withdrawa ls ,   retail   goods   and  payments   to  his   ex-w if e
and  a friend.
b. Sichenzio   deposited   into   his   personal   checking   account   two   checks
each  in  the  amount   of  $25,000   from   two  P AI  investors   on  June  25,
2013,   and  a  $15,000   check  from  a  third   P AI  investor   on  August  8,
2013.     Sichenzio   spent   these  funds   on  cash  withdrawa ls   and  personal
expenses,   including   dining,   college   tuition   fees   for   his   child,   mortgages ,
personal   credit  cards,  and  landscaping.
c. On  October   24,  2014,   Gil   de  Rubio   deposited  into  his  personal  account
an investor  check  for $20,000.   And  Gil  de Rubio  took  another
investor’s   $100,000   investme nt   in   P AG   equity   as   a   purported   “loan
payback”   without   even  first  deposit ing   it  in  any  P AI  or  ICT  or  P AG
bank  account.
53. Although  Sichenzi o  and  Gil  de  Rubio  each transferred  funds  to  P AI   or  ICT
bank  accounts  controlled   by  Laura  during   the   relevant   period,   each   Defendant  has made
conflict ing   and  self-serving  statements  as to whether  those  funds  were capital
contribut ions   or  loans  to  P AI  or  for  Laura’s  personal   use.   In  any  event,  Sichenzio   and  Gil
de  Rubio  each  received  amounts   well  in  e xc ess  of  what  they  provided   to  P AI:    Sichenzio
received   a  net  of  at  least  $522,000   and  Gil   de  Rubio   received   a  net  of  at  least  $249,000.
54. Laura  and  Sichenzio   have,  on  certain  occasions   during   the  scheme,

20

admitted   to   certain  business  associates  that they  took  funds  from  P AI  for  themselves.
F.  De fe ndants   Kne w The ir  Re pre s e ntations  Re garding  the  Inte nde d Us e  of
Inve s tor Funds   We re  Fals e

55. Laura  knew  that,  and  Sichenzio  and  Gil  de Rubio knew or recklessly  or
neglige nt ly disregarded evidence  that,  Laura  was  routine ly   misappr opr ia t ing  investors’
funds  when  they  solicited   investors   between  2013  and  2017  by making false
representations  that  investor  funds  would  be  used  only  for  legitima te  business  purposes.
56. Laura  knew  at  the  time  he  made  these  representations   that  he  had  routinely
used,   and  would   continue   to  use,  investor  monies  for his  personal  benefit,  as he had  no
other  source  of  consistent   income   at  this  time.    And  Gil  de Rubio and  Sichenzi o  could
not,  in  good   faith,  make  the ir   representations   as  to  the  specific   use  of  the  investors’
monies,   given   the ir   knowledge   that   Laura   routine ly   used   investor   monies   for   improper
purposes and  that  there  was  no  oversight   or  control   over  his  use  of  investor   monies.
57. By  further   example,  Laura, Sichenzio   and   Gil   de   Rubio   conducted   an
aggressive  investor  pitch to  Investor  D  in  A pr il  2015, during   which   the  investor   requested
financial  statements  and disclos ure   documents.      Laura  was  evasive  and  put  off  the
request.      He   subsequent ly   admitted   to   Gil  de  Rubio that  he  could   not  provide   these
documents   because,  among   other  things,   he  had  never  completed   accurate  bookkeeping
and  never  filed  tax  returns  for  PAI.  Laura then  provided  Gil  de Rubio  with  redacted  P AI
bank   statements,   and  Laura  explained   that  the redactions  indicated  payments   made  to
non-PAI  related  indivi dua ls  and  entities.    Gil  de  Rubio  discussed  this  informat i on  with
Sichenzio,   who  took  no  action  in  response.    Gil  de  Rubio  did  not  inform  the  investor  of
what Laura  had  shown   him  or  what  it  meant,  i.e.,  that  Laura  was  commingl ing   P AI  funds

21

and  misappropr iat ing   them   for  non-PAI  uses.
58. Gil   de  Rubio  has  also  admitted   that,  by at least no  later  than  the  summer  of
2015,   he  knew  that  Laura  and  Sichenzio  had  taken  large  amounts   of  money  from PAI for
personal  use.
G. Laura  M ade  Additional M ate rial M is re pre sentations  and Siche nzio and  Gil  de
Rubio Aide d and  Abe tte d thos e M isrepre sentations

59. As part  of their  scheme  to  defraud   investors ,  the  Defendants   misled
investors   with   exaggerated,   unfounde d   representations   about   returns,   misleading
representations   about   the  financia l   health   of  P AI,  and  misrepresenta t ions   about   their  own
investme nt   in  P AI  or  P AG.
 a. The  Re ve nue  Sharing  Contracts
60. The  revenue  sharing  contracts  provided  for  returns   based on  a specified
share  of  revenue   per  barrel   of  oil   produced and  was based  on the  amount  invested,
typically  $.001  for  each $10,000  invested.    The contracts include d   an  estimated   schedule
for  oil   production   and  made  representations   about   investor   returns  based on the timin g
and  volume   of  production set forth  in  the detailed personalize d schedules.   These
scheduled payouts,   over  five  years  of  product ion,  amounted    to  over  a 1000%  return  and,
in  some  cases,  over a 2000%  return  on  investme nt.
61. For  example,  a contract  for an  investment   of  $100,000 stated  that,   at  init ia l
production   of  10,000   barrels   of  oil   per  day,  the  investor   would   receive  $100  per  day;  at
peak production   of  200,000   barrels   per  day  – w hic h,   according   to   the  schedule  provide d,
would   be  reached  within   12  months  – the  investor   would   receive  $2,000   per  day.  The

22

contract,  accordingly,  projected   that  the  investor would  receive  over  $2.84   million   in  5
years  based  on  a  $100,000   investment.
62. None  of  these  contracts,  however,  contained   any  explanat ion  of the  basis
for  these  projections   or  any  cautionar y   language   regarding   the  various   factors  that  could
interfere  with  or  prevent  the  investors  from  receiving   the  astronomica l,  scheduled  rate of
returns   on  investme nt ,   or  indeed   any  returns.
63. In  addition,  the  written  contracts  dated  between  June  and  September   of
2013  specifica lly   represented,   without   reasonable   basis,   that  P AI “anticipates  product ion
to  begin   on  or  about   April   1,  2014.”
64. The  revenue  sharing   contracts  Laura  wrote  also  included   false  statements
about   P AI’s  ownership   of  the  technology   and  facilit ies.     Contracts   between   investors   and
either  PAI-NJ or PAI-NV  claimed   that  P AI  “owns   exclusive   globa l   rights   to  certain
‘TECHNOLOGY’   for   heavy   oil   upgrading   and   refining   including   intellec t ua l   property
rights,   knowledge   and   facilit ies   for   cold   cracking   and   reforming,   visbreaking   and
desulpher i zat ion,   remote   activation   and   shielding[.]”      In  truth,  P AI never  owned  exclusive
rights   to  the  oil   processing   technology.    A nd  w hile    it  eventually obtained  a licensing
agreement   with  PAG  in  2014,  that  agreement  limited  PAI’s  exclusive rights   to  just   four
countries.
65. Indeed,  as late as July  23,  2014,  Laura acknowle dge d   in  an  email  to  the
CEO of  P AG  that no license  agreement had yet  been  finalize d.     In  late  October   2014,
Laura  and  the  invent ors   documente d   and  backdated  to  October  31,  2013  a  “Patent,
Technology   And  Know-How”  license  to PAI-NV  from  the  invent ors   of  the  cold-cracking

23

technology,  who   “own[]  exclusive ly   and  beneficia lly   all  rights  in  and  to”  the  technology.
The license  granted  PAI-NV  the  “exclusive   right”   to  use  the  existing   patents  and
informat ion only   in  the  U.S.,  Mexico,  Canada, and C olom b ia,   and  granted  only   non-
exclusive  rights  elsewhere.   There is no evidence  that PAI-NJ  ever  owned   any  valid
intellec t ua l   property   or  “know ledge”   rights,   or  that  any  P AI  entity   ever  owned   rights   to
a ny  f a c ilit ie s .
 b. The Convertible Loan Agreements
66. The convertible   loan  agreements  provide d   that  the  investor   would   lend   a
specified amount   of  principa l  to  P AI for  a  certain  time  period  along  with  a  stated  interest
rate,  typicall y   12  months   and  10%,   respectively.   The convertible  loan  agreements  falsely
referred  to  PAI’s  “internationa l   roll-out  of its  patented  . . . technology.”   P AI had  no
patented  technology.
67. Because PAI never generated  income  from licensing the  oil  processing
technology,  most  of  the convertible  loan investors   did  not  receive  their  pr inc ipa l   ba c k.
Moreover, any  interest  payments  investors received were minima l,  and some  appear  to
have  been  paid  using  funds  derived   from  subsequent investors.
 c.  The  Share  Purchase Agreements
68. The P AG share purchase  agreements  offered  stock  of  P AG  as  a  defined
percentage   ownership   of  the  company,   at  a  valuation   of  $100,000,000,   or  $952.38   per
share.
 d.     De fe ndants ’ Additional M is re pre s e ntations  Re garding
Comme rcial  De ve lopme nt of the  Oil Proce s s ing Technology

69. The  Defendants made  oral  misrepresentations  in  conversations   with

24

various  potentia l  investors  which   lacked  a  reasonable   basis  and  misleadingly  suggested
that  P AI had  or was immine nt l y  signing deals  that  would   result  in  deployme nt   of  the
technology in  a commercial  setting within   months,  and that  payouts  on  investor   contracts
would  begin  shortly.    For  example,   the  Defendants  made  the  follow ing
misrepresentations   to  investors   prior   to  their   investments:
a. Sichenzio  and  Laura  told Investor J,  who  invested   on  or  about  June  6,
2013,  that  production   would   take  place  within   1  to  2  years.
b. Laura  told  Investor  K,  who  invested   on  or  about  August  8,  2013,  that
there was a “cutoff  date” to make investments  because production
would  begin  in  April   2014   as represented in  the  investme nt   contract.
c. Gil   de  Rubio  told Investor  G,  who  invested   on  or  about  April   24,  2014,
that  P AI  was  going   to  go  public ,   and  that  Investor  G  would  be earning
tens  of  thousands   of  dollars   within  several months   to  a  year,  based  on  a
purported agreement  with  Venezuela   and  a  purported contract  with
China  worth  a “couple  billion.”
d. Laura and  Gil   de  Rubio  told Investor  C,  who  invested   on  or  about  June
5,  2014,   that  production   contracts  had  been  signed   in  Venezuela   and
Estonia, even  though  those agreements  were only for pilot  tests,  not
production.
e. Laura f a ls e ly  told  Investor  D,  who  invested   on  or  about  June  10,  2014
and  invested additiona l   funds  in  January  and  May  2015,  that  P AI  had
been  offered  $500  million   from  the  United  Arab  Emirates   for  its

25

technology,   that  they  had  a  “sure  deal”  elsewhere  that  would   make
them  billi ons ,   and  that  there  was  a  lender   in  the  country   of  Georgia
planning   to  invest   $12  million.
f. Gil  de  Rubio  and  Laura  told Investor  H,  who  invested   on  or  about  June
5,  2014,  that  there  would   be  a  one  year  turnaround before  payouts
began,  and  that  if  that didn’t  happen,  he  could  “cash  out”  his
investme nt.
g. Gil   de  Rubio  told Investor L,  who  invested   on  or  about  November   5,
2014,  that  he  would  begin  getting  payouts  within  18  months.
h. Laura told Investor M,  who  invested   on  or  about  February  13,  2015,
that  P AI  would   go  into  product ion  in  6 months to  1 year.    Gil   de  Rubio
told  the  investor   that  he  would   earn  between  $50,000   and  $250,000  a
year on  a $50,000  investment.
i. Laura told Investor N,  who  invested  on  or  about  July  29,  2016,   that  PAI
was “on  the verge”  of a major  production  contract.
j. Laura  told  Investor O,  who  invested   in   a  convertible   loan   on  or  about
January  17,  2017,  that  P AI  was  just   about   to  close  a  big  deal,  and  that
Investor  O needed  to  invest  shortly   otherwise   he  would   not  need
Investor  O’s money.
70. In  addition   to  oral  misrepresentat ions ,  Laura  wrote  a PAI “Business  Plan”
that  Gil  de Rubio provide d   to  at  least  two  investors  by  in  2013   and  2014.  The  Business
P la n  suggested that  commercial  contracts  were imminent – e.g.,  “After  reviewing   the

26

results   of  the  pilot   in  Venezuela ,   P DVSA  [the  Venezuelan   state-owned  oil  agency]  has
indic a te d   to  P r is te c   its   de s ir e    to  r oll   this    technology   out   commercia lly   within
Venezuela...  Over  a  six  year  time  horizon   we  will   reach  [total] production   capacity  of  at
least  . . . One   Million   Four   Hundred   Thousand   (1,400,000)   bpd   utilizing   our   various
business  models.”    The  Business   P lan  carried   no  disclaimers   or  disclos ures   of  risk  factors,
or of the actual  obstacles  PAI was already  experiencing  in Venezuela.
71. Indeed,  as early  as November  2013,  Sichenzio  conceded  to  one investor
that  it  was  unclear  how  P AI  would   monetize   this  relations hip   with  P DVSA  because  the
Venezuelan   governme nt   was   fiscally   unstable.
72. Formal  testing  with  P DVSA  did  not  take  place  until  April  2014.
According  to  a November  2014  letter that Laura  drafted  to  the  Venezuelan   authorit ies,
which Sichenzi o  reviewed,  the  unit  in  Venezuela  “lied  idle  and  non-working” after the
April  test through  at least  November  25,  2014,  and PDVSA was “prevent ing [PAI] from
obtaining   business   internationa ll y.”      Laura   was a ls o  aware that the research and
developme nt  arm of PDVSA had   circulated   negative   internal   reports   concerning   the
technology   to   potentia l   clients.    Venezuela  declined  to enter into  a commercial  contract  to
use the  technology.
73. Indeed,   P AI  and  P AG  repeatedly   failed   to  move   past  the  pilot   stage  to  any
contract   for  commercia l   use  of  the  technology.
  e. De fe ndants ’  Knowle dge   of  the   Subs tantial   Ris ks   Impacting
Proje cte d  Inve s tor Re turns
74. The Defendants  were aware of,  or  recklessly   or  neglige nt ly   disregarded,

27

that PAI’s  rights   to  use  the  oil   processing   technology   were  non-existe nt   until   2014   and
then   P AI’s   exclusive   rights   were   limite d   to   only   four   countries.
75. The  Defendants  a ls o  had  no  reasonable   basis  to  anticipate   that  product ion
would  begin  on  or  about  April  2014,  as  set  forth  in  various  revenue  sharing  agreements  in
2013,  and  no  reasonable   basis  to  assert  the less specific projections   and  valuations.
76. Defendants’ representations were  based  primar ily   on  purported   anticipate d
contracts  with  entities  either  owned  or  regulated  by  foreign  governme nts ,   and  with
business   partners  who  often  proved   to  be   unr e lia b le .    This  presented  numerous   polit ica l ,
legal,   regulator y   and   economic   hurdles   and  risks  with  which  Defendants  were woefully
inexper ience d   and  unsuccessful   in  dealing.    Defendants   failed   to  adequately   disclose
these  risks   to  various   investors.
77. For  example,  the   oil   processing   technology   was   entirely   untested   in   a
commercial  setting  and it had been rejected  on at least one occasion  because of safety
concerns.   Even  assuming  the technology  was effective, to  reach  the  projected   oil
production   levels   Defendants   would   have  had  to  fund   the  manufacture   of  numerous
additiona l   cold-cracking   units,   each  costing   more  than  $1  milli on.   Defendants,  however,
had  insuffic ie nt   funds  and  no  existing   contracts  to  manufacture   the  needed  units.
78. Indeed, during   the  relevant   period,   P AG  never  had  more  than  two
mechanica l   units  capable  of  processing   oil.   One  of  those  units   was  located   in  Venezuela,
where,  after  a  2011   pilot   agreement,   it  took   nearly   2  years  of  preparatory   work  to  begin
limite d   testing  in  March  2013.    P AI  itself  had  no  units.
79. As late  as 2017,  P AG’s oil  processing  unit  was described  as no  more  than  a

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“crude  machine”   by  Investor  O,  who had  some   knowledge   of  oil  r e f inin g  and  who  vis ite d
Austria  to  observe  the  cold-cracking   technology.
80. Indeed, Defendants documente d   their   own  awareness  of  the  risks   factors.
For  example,  in  August  2013,  Laura  helped  to  draft  a  four-page  statement  of  Risk   Factors
in  connection   with  a  proposed Series  A  offering   that  was  not  comple te d.   The  risk   factors
include d:
a. “We  have  incurred   net  losses  since  our  inception   and  expect  to  incur
net losses for  the  foreseeable   future.”
b. “Our  technologies   are  commercially   untested,   and  therefore,  the
successful   developme nt   and  commercia liza t ion   of  our  technologies
[remain] subject   to  signif ica nt   uncertaint y.    We completed  a
commercia l   pilot   program   and   are   currently   conducting   an   industr ia l
pilot   program.    The results  of  these pilot  programs  are not  a guarantee
of   future   economic   viabilit y,   and   other   pilot   programs   are   contemplate d
to   continue   calibrat ing   our   technology.  Commerc ia l   contracts   to  install
or  use  our  technologies   are   incumbe nt   upon   several  certifications   and
transaction  details  such  as  licensing  terms.”
c. “We  may  not  be  able  to  obtain   and  maintain   intellec t ua l   property
protection   for   our   technology   and  product   and,  in  the  future,  may  be  a
party   to   intellect ua l   property   litigat i on   that   could adversely  affect our
business....O ur  existence  depends,  in  part,  on  the  patent  rights  licensed
from  third  parties  with  respect  to  our  technologies....O ur   patent

29

positions   and   those   of   other   similar   companies   are   uncertain   and
involve   complex   legal   and  factual  questions.”
d. “The  assumptions   underlyi ng   our  projections   may  not  prove  to  be
reasonable,   and  actual  results  achieved   during   the  projected   periods
may  vary  materially   from   the   project ions ....O ur   financia l   projections
are  based  on  generalize d   assumptions   relating   to,  among   other  things ,
acceptance  of  our  products   and  technologies   and  the  timing   of  the
introduc t ion   and  adoption   of  such  products   and  technologies ....T he
assumptions   underlying   the  projections   may  not  prove   to  be  reasonable,
and   actual   results   achieved   during   the   projected   periods   will   inevitabl y
vary  from  the  projections.”
81. Sichenzio  received the statement  of Risk  Factors and  was aware,  or
neglige nt ly   or   recklessly  disregarded,  the  disclos ures   of  signif ica nt   risk.  Sichenzio   also
knew,  based  on  emails   from  Laura  in  A pr il,  August  and  September   2013,  and  in   October
2014, that P AI had no  valid  license  agreement  for  the  oil   processing   technology.
82. Gil   de   R ubio  received an email   from  Laura  no  later  than  September   11,
2013 which   made  clear  that  P AI  had  no  valid   license   to  the  technology.   Gil   de  Rubio
also  received   the  statement  of  Risk  Factors  no  later  than  September   2015.   In  addition,   he
received  documents   from   Laura  throughout   the  relevant   period   that  indicate d   that  P AI
had  no  ownership   of  any  patents.
83. Given   this   history,   and  the  above-referenced   risks,  all  of  which  Defendants
knew  or  recklessly   or  neglige nt ly   disregarded,   the  Defendants   had  no  reasonable   basis  for

30

their  representations   regarding:  (i)  when   P AI,  or  for  that  matter  P AG,  would   enter  into   oil
processing   contracts;  ( ii)  when  oil  processing   would   commence;  ( iii)  what  oil   processing
volume  would  be  achieved  and when;  and  (iv)  how  much,  if   a ny,  revenue  would   be  paid
to  P AI  investors.
 6. De fe ndants ’  Additional  Fals e  State me nts
84. Sichenzio   and  Gil   de  Rubio made  multiple  statements   and  omissions  that
materially  misled  investors  into  believing  that  Defendants  had  “skin   in   the  game,”  that
they   were   financia lly   trustworthy   and/or   had   business   expertise.      For  example,  prior  to
Investor  J making  his  investme nt on  or  about   June  6,  2013,   Sichenzio   falsely  told  him,  in
substance, that   Sichenzio   had   invested   many   millions   of   his   own   personal   funds  in  P AI.
85. Gil  de   R ubio  f a ls e ly  told certain investors   that  he  was  an  investor   in   P AI.
For  example,   Gil   de  Rubio  made   the   follow ing   misrepresenta t ions   to   investors   prior   to
their  investme nts:
a. He told  Investor  G,  who  invested   on  or  about  April   24,  2014,  that  he
had  invested  “all  his  savings”  in  P AI.
b. He told Investor  D,  who  invested   on  or  about  June  1,  2014,  that  he  had
invested   over  $1  milli on   in  P AI.
c. He told Investor  H,  who  invested   on  or  about  June  5,  2014,  that  he  was
a “passive  investor”  in  P AI.
d. He told Investor  C,  who  invested   on  or  about  June  5,  2014, and  Investor
P,  who  invested   on  or  about  December  16,  2014,  that  he was an
investor  in  P AI.

31

e. He told Investor Q,  who  invested  on  or  around  September   30,  2014,
and  later  invested   in  October  2014  and  April   10,  2015,  that  he had
invested   and  “put   a  lot   [of  money]   in”  to  P AI.
f. He told Investor  L,  who  invested   on  or  about  November   5,  2014,  that
he  was  an  investor   and  would  only  be paid  as an investor.
g. He told Investor I,  who  invested   on  or  about   November   10,   2014,  that
he  had  invested   more  than  $50,000.
h. He told Investor N,  who  invested   on  or  about  July  29,  2016,  that he was
an  investor   and  had  put  money   into  P AI.
86. When the  Defendants   discussed the ir   own financia l   contribut i ons   and
Laura’s  claimed  business  expertise,  the  Defendants  did  not  dis c los e  to  various   investors,
includi ng  Investors D, H,  and J,  that  Laura  owed  Sichenzi o,   Gil   de  Rubio   and  other
indivi dua ls   milli ons   of  dollars   from  other  ventures  that  had  incurred   signif ica nt   losses  due
to Laura’s  mismana ge me nt.    Defendants a ls o  knew -  -   but did  not  disclose  -   -  that Laura’s
poor f ina nc ia l   his tor y  preclude d   Laura  from  receiving business   or  personal   credit,  or
loans   or   mortgages   through   banks   or   other   typical   financia l   institut i ons.   In fact,  Laura
could not  obtain  even a credit  card  and  was  reliant   on  friends   or  relatives   for  any  credit-
based  transactions.
H.      De fe ndants ’ Atte mpts  to Conceal the ir Fraudule nt  Sche me

87. In  order  to  conceal   the  Defendants’ scheme to  defraud   investors ,  Laura
repeatedly  failed  to  provide  accurate  and  complete  informat i on  to  an accountant hired  by
PAI concerning   incoming   and   outgoing   P AI   funds.   After  November   2013,   Laura  never

32

provide d   the  accountant   with   access  to  P AI  or  ICT  bank   statements.     Laura  ensured  that
no tax returns could   be  filed  for  PAI  or  ICT,  and  that  no  accurate  f ina nc ia l   dis c los ure
records – which would   have  revealed   the  full   extent  of  Laura’s  misappr opr ia t ion   and
misuse  of P AI funds  – could   be  compile d.
88. In  furtherance   of  their   scheme  to  defraud,   Defendants  a ls o  concealed  their
misappr opr iat i on  of  investor  funds  and  P AI’s  precarious  financia l  condit ion  by  not
maintaining  a complete set of executed  contracts, a contempora ne ous   list   of  investors,  the
amount   of  their  investme nts , and the  interest   payments  due or  revenue  payments   to  which
they were entitled.    Defendants  also  did  not  document   funds  they purportedly   lent  to,  or
borrowed  from,  PAI.
89. In order  to  conceal  and  further   the  scheme,  Laura,  Sichenzio  and  Gil   de
Rubio continue d   to  make  misrepresenta t ions   to  investors   who  asked  questions.
90. For  example,  in  November   2014,  in  response   to  an  investor’s   request   that
his   $100,000   investme nt   be   returned,   Laura stated that  the  investor  would  receive  a
$250,000   payment   “in   lieu   of  the  schedule[d]   revenue   share  payments   which   were  to  total
One   Milli on   Six   Hundred   and   Sixty   Eight   Thousand   ($1,668,000. 00)   in   Sixty   (60)
payments   once  production   began.”   Laura claimed  that the  investor’s   repayment   would
take   place   after   a   purported   scheduled   $15   million   “funding   round”—w hic h   never
occurred.    The  investor   never  received  his  money   back.
91. Sichenzio,   in  November   2014,   on  the  same  day  that he  received  a  copy  of
Laura’s  letter  concerning   the   proble ms   delaying   the   Venezuela n pilot  program,  emailed
an  investor  stating that  a  pilot   contract  with  CNP C  -   the  Chinese   governme nt   petroleum

33

company – would   take  only   90  days  and  that  “all  goals  set  forth  in  contract  will   be  easily
attainable  due to succes[s] of certified  tests in . . .  in  [V]enezuela.”
92. Gil   de  Rubio  made  multiple   false c la ims   to Investor  A,  who  regularly
compla ined to  Laura,  Sichenzio   and  Gil   de  Rubio  about   red  flags  of  potentia l  fraud he
observed after he invested.   For  example ,   in  May  2014,  Investor  A  expressed  concerns
that  P AI  might   be  “just   another  one  of  those  orchestrated   scams,  quasi-Ponzi  schemes,
etc...”  and  asked  for  a  financia l   status  report  and  a  representation   in  writing   as  to  how  his
$500,000 investme nt had  been  spent.     Gil   de  Rubio   responded by claiming   to  have
personally provide d  $700,000  to  P AI and f a ls e ly  s ta ting  that  “I  have  seen  the  company
checkbook   register   and   have   received   documentat i on   of   every   transaction   involving   [the
purported  $700,000].   I have  yet to witness  anything  questiona ble.”   He stated,  without
basis,   that  the  investor’s   shares  would   be  worth  “$10,000   per  share  with  the  first  deal  we
sign   that  are  presently   on  the  table.”
93. Later, Gil  de   R ubio  f a ls e ly  c la ime d  to Investor  A  that he had  invested  his
life   savings   in  P AI  and  that  he  had  access  to  all  of  P AI’s  financia l   and  other  records  and
that  “every  dollar”   had  been  accounted   for  and  was  spent  on  P AI  expenses,   and  that
accordingly  he was “confide nt  that my  investme nt  is safe as I know  everything  we have  is
aboveboard.”   He further  claimed that  he was a “princ ipa l”  of P AI,  but  that,   due  to  his
felony crimina l   record,   he  “chose   not  to  be  public ly   acknowledge d   so  not  to  expose   the
company   to  any  discredit.”
94. I n  mid-2016,   Laura  and  Sichenzio   approached  an  entity   that  eventually
became the JV Partner and  proposed   that  the JV Partner  lend them  the  funds   to  repay

34

what  they  had  wrongfully   taken  from  P AI.  Laura  also proposed   that   the JV Partner  give
Laura  funds  – $1.5  milli on  – off the  books,   and  in  exchange  Laura  would give the JV
Partner  a license  to certain purported P AI intellect ua l  property for  free.  The JV Partner
was  uncomforta ble   with  this  request  and  refused.    In  discussions   with  the JV Partner
during   this  time  period,   Laura  and  Sichenzio   also  admitte d   they  did  not  pay  any  taxes  on
the  money  they  misappr opr iate d  from  P AI.    Gil  de  Rubio  was aware of,  and  facilitated,
these  discussions  with  the JV  Partner.
95. Gil  de  Rubio  received  complaints  from  multiple  other investors   throughout
2016,   including   at  least  one  investor   who  asked  for  financia l   statements   and  other  updated
informat ion.  Gil  de  Rubio  did  not  provide  the  requested  financia l  informat i on.
96. Laura  and  Sichenzio  a ls o  repeatedly lie d  about  the P AI investor  funds
Sichenzio  took.   Sichenzio  claimed in  separate  FINRA   and  SEC  investigat ions that  the
funds   he  took   from  P AI  were repayments  for funds he earlier  contributed  – which,   he
said,   were  not  investme nts  but  rather  funds  that  he could   take  back  at  any  time.
Subsequent ly, Laura  and  Sichenzio  claimed  to  investors  and  other  individua ls   associated
with  PAI that Sichenzio’s init ia l   payments   were,  in  fact,  investme nt s   but   that  Sichenzio’ s
lawyer advised to  describe   these  payments   as loans  or advances  in  order  to  minim ize
liability.
97. Gil   de  Rubio  was aware that a full  examination  of PAI’s bank  records
would  reveal  the  Defendants’  misappropr iat ion  and  malfeasance,  and  he attempted  to
convince   others  to  conceal  the  truth.    In  August   2016,   while   the  SEC  investigat ion   was
ongoing,   Gil   de   Rubio   and   others  discussed   the  need  to  “Quantif y   debt  by  [Laura]  and

35

pay back...Pay  back or re initiate  all  debts.”  In  an  October  10,   2016   email,  after  he  had
been  subpoenaed  by  the  SEC staff, Gil  de Rubio expressed  concerns  about  the
investigat ion.    Specifically,  he  urged  the  need  to  review   bank  statements   and  “work  out
an  explanat ion   for  every  transaction   and  find  a  way  to  resolve  those  transactions   that  may
present  a proble m.”
98. The  Defendants   did  not  inform   P AG  about  the  large  quantit y   of  revenue
sharing  agreements  they had  committe d   to  on  behalf  of  P AI  until   late  2016.   Between
2010  and  2016,   Defendants   promise d   over  $.90  per  barrel  in  revenues  to  be  paid  to
investors.      After  learning   about   the  contracts,  the CEO of  P AG  described   them  as  a
“Damocles   sword”  threatening  the  livelihood   of  both   P AI  and  P AG,  because neither  P AI
nor  P AG  could   pay  out  these  promise d   amounts  without   bankrupt ing   the companies.    In
fact, PAG  was seeking  only $1.00   per  barrel  in  royalties   in  its  proposed   oil   production
contracts,  which  no  entity  ever agreed  to.
99. Despite   the  misappr opr ia t ion   and  financia l   disarray,  in  late  2016  and  early
2017  the  Defendants  offered   to  convert  the  PAI investors ’ revenue  sharing   agreements
and  convertible   loans  into   P AG  equity,   and  even  purported   to  convert  some  of  these
agreements  into  P AG  equity without the  investors’  consent.    Investors  were  not provide d
material  disclosures   concerning   the conversion,  such  as the true financia l   condit ion   of
PAI or PAG.    Nor  were  investors   advised  what  had  been  done   with  the ir   funds   to  date  or
provide d the basis  for  Defendants’ valuation   of  the  proffered securities.
I. Evide nce  of Ongoing Fraud

100. Despite   having   been   removed   from   the ir   officer   roles  at  PAI  by A pr il 2017,

36

Laura  and  Sichenzio   appear  to  be  continui ng   to  raise  funds   in  the  name  of  P AI,  and
continuing   to   spend  those  funds  on  themselves.    Laura  opened   a  new  bank  account   in
PAI’s  name  in  June  2017,  and  accepted  $525,000   in  apparent  investme nt   funds  through
December  2017.     Only   $90,000   of  these  funds  was transferred to  P AG.  A majorit y  of  the
investme nt   funds  appears  to  have  been  spent  for  the  benefit   of  Laura  and  Sichenzio,
includi ng:  le ga l  defense fees  for  Laura  in  his  personal   capacity  ($125,000) ; payments  to
no-show  “consulta nts”  ($71,700); checks  or  wires  to  Laura,  and cash  withdrawa ls
($63,300);  investor  repayment  ($25,000); payments  to  Sichenzio   ($12,000) ;   retail
expenses  ($9,740);  and payments  for  insurance  for  Laura  ($1,800).
J. Laura  Acte d as  an Unre gis tere d B roker

101. Laura has never been registered as  a  broker  or  dealer  with  the  SEC  or
associated  with  a  broker  or  dealer  registered  with  the  SEC.
102. Throughout   the   relevant   period,   Laura   actively   solicite d   investme nts   from
dozens  of  investors  and  ultima te ly   sold   them   securities   of  P AI  and  P AG.  Laura  drafted
the  contracts  and  handled  negotiat ions   with  investors ,   includi ng   providi ng   advice   about
the merit  of the  investments.   He had telephone   conversations   or   in-person   meetings   with
many   investors   where  he  negotiate d   investme nt   amounts   and  discussed   returns.    Laura
had  control   of  the  relevant   bank   accounts   and  regularly handled   investor   funds.
103. Laura acted as the “closer”  for  many of  the  investors   introduced to  P AI  or
P AG by the other  Defendants  and  others,  and  handled   most  of  the  final  negotiat ions,
contractin g,  and  payment   details   for  the  investors   they  solicite d.

37

FIRST  CLAIM  FOR  RELIEF
Violations    of  Se curitie s   Act  Se ction  17(a)
(Laura)

104. P aragraphs   1  through  103 are realleged  and  incorporated  by  reference
herein.
105. Laura,  by engaging in  the  conduct  described  above,  dir e c tly  or  indir e c t ly ,
in  the  offer  or  sale  of  securities,  by  the  use  of  the means  or  instrume nts  of transportation
or communication  in interstate  commerce or  by  use  of  the  mails:
a. knowingly   or   recklessly   employe d   devices,   schemes,   or   artifices  to
defraud;
b. knowingly,   recklessly   or   negligent ly   obtained   money   or   property   by
means of untrue  statements  of material  fact or omissions  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
c. knowingly,   recklessly   or   negligent ly   engaged   in   transactions ,   practices,   or
courses  of  business   which   operated   or  would   operate   as  a  fraud  or  deceit
upon  purchasers  of  securities.
106. By  engaging   in  the  conduct   described  above,  Laura  violated,   and  unless
restrained   and  enjoine d   will   in  the  future  violate ,   Sections   l  7(a)(l),   (2),  and  (3)  of  the
Securities  Act  [15 U.S.C. §§ 77q(a)(l) ,  (2),  and (3)].
SECOND CLAIM FOR RELIEF
Violations    of  Exchange   Act  Se ction  10(b)  and  Rule   l0b-5
(Laura)

107. P aragraphs   1  through  103 are realleged  and  incorporated  by  reference

38

herein.
108. Laura,  by engaging in  the  conduct  described  above,  dir e c tly  or  indir e c t ly ,
in  connection   with   the  purchase   or  sale  of  securities, by  the  use  of  the means  or
instrumentalities  of interstate  commerce, or of  the  mails,   or  of  any f a c ility  of  any nationa l
securities  exchange,  knowingly   or  recklessly:
a. employed  devices,  schemes,  or  artifices  to defraud;

b. made untrue  statements  of a material  fact or omitted  to state a material  fact
necessary  in  order  to  make  the  statements  made,  in  the  light   of  the
circumstances  under  w hic h  they were made,  not  mis le a d in g;  and
c. engaged in  acts,  practices,  or  courses  of  business  w hic h  operated  or  would
operate  as a fraud  or  deceit  upon other persons.
109. By  engaging   in  the  conduct   described   above,  Laura  violated,   and  unless
restrained   and  enjoine d   will   in  the  future  violate ,   Section   10(b)  of  the  Exchange   Act  [15
U.S.C.  §  78j(b)]   and  Rules  10b-5(a) ,   (b),   and  (c)  thereunder   [17  C.F.R.  §§  240.10b-5 (a) ,
(b),  and  (c)].
THIRD CLAIM FOR RELIEF
Violations  of Se curitie s  Act Se ctions  17(a)(1) and (3)
 (Siche nzio and Gil de  Rubio)

110. P aragraphs  1  through 103 are realleged  and incorporate d by reference
herein.
111. Sichenzio   and  Gil   de  Rubio,  by engaging in  the  conduct  described   above,
directly   or  indirect ly,   in  the  offer  or  sale  of  securities,   by  the  use  of  the means  or
instrume nts  of transportat ion   or   communica t ion   in   interstate  commerce  or  by  the  use  of

39

the   ma ils:
a. knowingly   or   recklessly   employe d   devices,   schemes,  or artifices  to
defraud;  and
b. knowingly,  recklessly  or  neglige nt ly engaged in  transactions ,  practices,  or

courses  of  business   which   operated   or  would   operate   as  a  fraud  or  deceit
upon   purchasers   of  securities.
112. By  engaging   in  the  conduct   described   above,  Sichenzio  and  Gil  de Rubio
violate d,   and   unless   restrained   and   enjoined   will   in   the   future   violate ,   Sections   17(a)(l)
and  (3)  of  the  Securities   Act  [15  U.S.C.  §§  77q(a)(l)   and  (3)].
FOURTH  CLAIM  FOR  RELIEF
Violations  of Exchange Act Section 10(b) and Rules 10b-5(a)
and  (c)
(Siche nzio  and  Gil  de   Rubio)

113. P aragraphs   1  through  103 are  realleged   and  incorporated   by  reference
herein.
114. Sichenzio   and  Gil   de  Rubio,  by engaging in  the  conduct  described  above,
directly   or  indirect ly,   in  connection   with  the  purchase  or  sale  of  securities, by  the  use  of
the means or instrumentalities  of interstate  commerce, or of  the  mails,   or  of  any f a c ilit ie s
of  any national  securities  exchange,  knowingly   or  recklessly:
a. employe d   devices,   schemes,   or  artifices   to  defraud;  and

b. engaged in  acts, practices,  or  courses  of  business  w hic h  operated  or
would  operate  as a fraud  or  deceit  upon other  persons.
115. By  engaging   in  the  conduct   described   above,  Sichenzio  and  Gil  de Rubio
violate d,   and  unless   restrained   and  enjoined   will   in  the  future   violate ,   Section   10(b)   of  the

40

Exchange  Act  [15 U.S.C. § 78j(b)]  and R ule s  10b-5(a)  and (c) thereunder  [17 C.   F.R.  §§
240.10b- 5(a)  and (c)].
FIFTH  CLAIM FOR RELIEF
Aiding  and  Abe tting  Violations   of  Se curitie s   Act  Se ction
17(a)(2)
(Siche nzio  and  Gil  de   Rubio)

116. P aragraphs   1  through  103 are  realleged   and  incorporated   by  reference
herein.
117. By  virtue   of  the  foregoing,  Sichenzio   and  Gil   de  Rubio,  singly   or  in
concert,  directly   or  indirect l y,  knowingly   or  recklessly  provide d   substantia l   assistance   to
Laura,  who  by  use  of  the  means  or  instrume nts   of  transportat ion   or  communica t ion   in
interstate  commerce  or  by  use  of the mails,  in the offer or sale of securities, obtained
money  or  property  by  means  of  untrue   statements   of  material   fact  or  omissions   to  state
material   facts  necessary  in  order  to  make  the  statements  made,  in  light   of  the
circumstances   under  which  they  were  made,  not  misleading.
118. By  virtue   of  the  foregoing,  Sichenzio   and  Gil   de  Rubio aided  and  abetted,
and,   unless   restrained   and   enjoine d,   will   continue   aiding   and   abetting,   violat ions   of
Section  17(a)(2)  of the Securities   Act,  15  U.S.C.  §  77q(a)(2).
SIXTH  CLAIM FOR RELIEF
Aiding  and  Abe tting  Violations   of  Exchange   Act  Se ction
10(b)  and  Rule   l0b-5 (b)
(Siche nzio  and  Gil  de   Rubio)

119. P aragraphs   1  through  103  are  realleged   and  incorporate d   by  reference
herein.
120. By  virtue   of  the  foregoing,   Sichenzio   and  Gil   de  Rubio,  singly   or  in

41

concert, directly  or  indirect l y,  provided  knowing  and  substantia l  assistance  to  Laura, who,
directly   or  indirect ly,  in  connection   with  the  purchase  or  sale  of  securities,   knowingl y   or
recklessly used  the  means  or  instrume nta l it ies   of  interstate   commerce,   or  of  the  mails,   or
of  any f a c ility   of   any national   securities  exchange  to  make  untrue  statements  of  a  material
fact or to omit  to state material  facts necessary in order to make the statements  made,  in
the  light   of  the  circumstances   under   which   they  were  made,   not  misleading.
121. By  virtue   of  the  foregoing, Sichenzio   and  Gil   de  Rubio aided  and  abetted
and,   unless   restrained   and   enjoine d,   will   continue   aiding   and   abetting,   violat ions   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).
SEVENTH  CLAIM FOR RELIEF
Violations  of Exchange  Act Section 15(a)(1)
(Laura)

122. P aragraphs   1  through  103 are  realleged   and  incorporated   by  reference
herein.
123. Laura,   by  engaging   in  the  conduct   described   above,   directly   or  indirect ly,
made  use  of  the  mails   or  any means or instrumentalities  of interstate  commerce  to effect
transactions   in,   or  to  induce   or  attempt   to  induce   the  purchase   or  sale  of,  securities,
without  being  registered  as  a  broker  or  dealer,  or  being  associated  with  a  registered
broker  or  dealer  in  accordance  with  Section   15(b)   of  the  Exchange  Act [15  U.S.C.
§ 78o(b)].
124. By  virtue   of  the  foregoing,   Laura  violate d   and,  unless   enjoine d,   will
continue   to  violate   Section   15(a)(1)   of  the  Exchange   Act  [15  U.S.C.  §  78o(a)(1)].

42

PRAYER  FOR RELIEF

WHEREFORE, the  Commis s ion   respectfully   requests  that  the  Court:

A. P ermanently   enjoin Laura  from  viola t in g ,  directly  or  indirect ly,   Sections
17(a)  of  the  Securities  Act; Sections   10(b)  and  15(a)(1)  of  the  Exchange  Act; and Exchange
Act R ule  10b-5;
B. Permanently  e njoin  Sichenzio   and  Gil   de  Rubio from  viola t in g ,  dir e c tly  or
indirect ly,   Sections   17(a)(l)   and  (3)  of  the  Securities   Act;  Section   10(b)   of  the  Exchange
Act;  and  Exchange  Act R ule s  10b-5(a)  and (c) and  permanent ly   enjoin  Sichenzio   and  Gil   de
Rubio from,  dir e c tly  or  indirect ly,  aiding   and  abetting  viola t ions   of   Section  17(a)(2)  of  the
Securities   Act;  Section   10(b)   of  the  Exchange   Act;  and Exchange  Act  R ule  10b-5(b)    by
other  persons;
C. Order  each of the  Defendants  to disgorge   the  ill-got te n   gains   obtained   as   a
r e s ult  of  the  conduct   alleged   in   this  Compla int ,   with   prejudgme nt   interest;
D. Order  each of the  Defendants  to  pay c ivil money penalties  pursuant  to  Section
20(d)   of  the  Securities   Act  [15  U.S.C. §  77t(d)]  and  Section  2l(d)(3)   of  the  Exchange   Act
[15 U.S.C. § 78u(d)(3)] ;  and
E. Gra nt  such further  r e lie f  as the Court  may  deem  jus t  and appropria te.

43

    JURY DEMAND
 P laintiff   demands  that  this  case  be  tried  by  a  jury.
Dated:  New  York,   New  York
September  7,  2018
      SECURITIES AND EXCHANGE COMMISSION

B y:  /s/ Marc P. Berger
Marc P. Berger
Regional  Director
Lara S. Mehraban
Thomas  P . Smith,  Jr.
Kevin P. McGrath
Margaret D. Spillane
New York  Regional  Office
Brookfield   P lace,  200  Vesey  Street,  Suite  400
New York,  New York  10281
(212)  336-0533 (McGrath)
Ema il:  [email protected]

Attorneys  for  the P la intif f

1 

Marc P. Berger 
Lara S. Mehraban 
Thomas P. Smith, Jr. 
Kevin P. McGrath 
Margaret D. Spillane 
Attorneys for the Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place, 200 Vesey Street, Suite 400 
New York, New York 10281 
(212) 336-0533 (McGrath)
Email: [email protected]

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
------------------------------------------------------------------------x 
SECURITIES AND EXCHANGE COMMISSION, :

:
Plaintiff, : 

:
:

-against- :
:
: 

18 CV. 5075    (      ) 

ECF Case 

COMPLAINT AND 
JURY DEMAND 

JOSEPH M. LAURA,  : 
ANTHONY R. SICHENZIO, : 
and WALTER GIL DE RUBIO, :

:
Defendants.    : 

------------------------------------------------------------------------x 

The Securities and Exchange Commission (“Commission” or “SEC”) alleges as 

follows for its Complaint against defendants Joseph M. Laura (“Laura”), Anthony R. 

Sichenzio (“Sichenzio”) and Walter Gil de Rubio (“Gil de Rubio”) (collectively, 

“Defendants”): 

SUMMARY 

1. This enforcement action involves a scheme by defendants Laura, Sichenzio

and Gil de Rubio to defraud investors and misappropriate and misuse investor funds.  From 

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at least June 2013 through January 2017, Defendants raised more than $3.7 million from at 

least 80 investors through the fraudulent offer and sale of securities of Pristec America, Inc. 

(“PAI”), a U.S. company incorporated by Laura, and Pristec AG (“PAG”), an Austrian 

company that had rights to a crude oil processing technology.  Many of these investors were 

social and business acquaintances of the Defendants who were led to believe they were being 

offered a special opportunity available only to “friends and family.”   

2. Throughout the relevant period, the Defendants offered and sold securities in 

the form of revenue sharing, stock purchase and convertible loan agreements, which Laura 

both drafted and signed, and Sichenzio signed.  These investment contracts and Defendants’ 

oral solicitation of investors contained a variety of fraudulent misrepresentations and 

omissions of material facts concerning the purported oil processing technology, how 

Defendants would use investors’ funds, the financial condition of PAI and Defendants’ 

purported investments in it.  The revenue sharing contracts also contained baseless and/or 

unreasonably optimistic projections concerning the timing and amount of investment returns 

investors could expect to realize.  

3. Of the more than $3.7 million that the Defendants raised from investors since 

June 2013, less than half of it went to legitimate business uses.  Laura misappropriated and 

misdirected the rest of it for his personal use -- to pay his personal expenses and personal 

loans.  He also directed substantial amounts of these investor funds to Sichenzio and Gil de 

Rubio for reasons unrelated to PAI’s business. 

4. Sichenzio, who held various corporate positions at PAI and indirectly owned 

part of it, and Gil de Rubio, were aware of or recklessly disregarded Laura’s 

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misappropriation and misuse of funds, in part because Laura had improperly given PAI 

investor funds to each of them.  Sichenzio and Gil de Rubio solicited investors into the 

scheme without disclosing Laura’s misappropriation or their own troubled financial histories 

with Laura, and aided and abetted Laura’s misstatements. 

5. To date, despite raising more than $12 million from over 150 investors since 

2010, during which time they repeatedly claimed that revenue generating contracts were 

imminent, the Defendants have failed to generate any revenue for their investors from 

commercializing the crude oil technology.  The only beneficiaries of Defendants’ long-

standing scheme to defraud are themselves.  

    VIOLATIONS 

6. By engaging in the conduct described in this Complaint, Laura violated 

Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], and 

Sections 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. 

§78j(b)], and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and violated Section 15(a)(1) 

of the Exchange Act [15 U.S.C. § 78o(a)(1)].  Unless restrained and enjoined, Laura will 

engage in future violations of these provisions. 

7. By engaging in the conduct described in this Complaint, Sichenzio and Gil de 

Rubio violated Sections 17(a)(l) and (3) of the Securities Act [15 U.S.C. §§ 77q(a)(l) 

and(3)], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rules 10b-5(a) and 

(c) [17 C.F.R. §§ 240.10b-5(a) and (c)] thereunder, and aided and abetted Laura’s violations 

of Section 17(a)(2) of the Securities Act and Section 10(b) of the Exchange Act and Rule 

10b-5(b), and unless restrained and enjoined, will engage in future violations of these 

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provisions. 

 NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT  

8. The Commission brings this action pursuant to authority conferred by Section 

20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d)(1) of the Exchange Act [15 

U.S.C. § 78u(d)(1)].  The Commission seeks to restrain and permanently enjoin the Defendants 

from engaging in the acts, practices, transactions, and courses of business alleged herein.  In 

addition, the Commission seeks a final judgment (i) ordering the Defendants to disgorge their ill-

gotten gains, together with prejudgment interest thereon; and (ii) ordering the Defendants to pay 

civil monetary penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and 

Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. 

 JURISDICTION AND VENUE 

9. The Court has jurisdiction of this action pursuant to 28 U.S.C. § 1331, 

Section 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 of the Exchange Act [15 U.S.C. §§ 78u(d), 

78u(e) and 78aa]. 

10. Venue is proper in the Eastern District of New York pursuant to 28 U.S.C.  

§ 1391(b)(2), Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the 

Exchange Act [15 U.S.C. § 78aa] because many of the acts, transactions, practices and 

courses of business constituting the violations occurred in this district.  For example, Laura 

solicited investors in the Eastern District who were offered and purchased securities, and 

PAI listed its principal office in Staten Island in various investment contracts.  Laura also 

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maintained a Staten Island bank account for PAI, maintained certain books and records of 

PAI in an office in Staten Island, and hired a Staten Island accountant for PAI.  

11. In connection with the conduct alleged in this Complaint, Defendants 

directly or indirectly made use of the means or instrumentalities of interstate commerce, 

the means or instruments of transportation and communication in interstate commerce, and 

the mails. 

12. Defendants’ conduct involved fraud, deceit, or deliberate or reckless disregard 

of regulatory requirements, and resulted in substantial loss, and significant risk of substantial 

loss, to other persons. 

DEFENDANTS 
 

13. Laura, age 56, is a resident of Springfield, New Jersey.  Laura is an attorney 

registered in New York and on retired status in New Jersey.  Laura founded PAI and, during 

the majority of the relevant period, he controlled PAI and held multiple corporate titles, 

including CEO, President, Treasurer and Chairman of the Board.  Laura has no training in 

science or physics and had no background in the oil business before becoming involved in 

PAI.   

14. Sichenzio, age 56, is a resident of Warren, New Jersey.  During the 

relevant period, Sichenzio held multiple officer roles with PAI, including Vice Chairman, 

Vice President, and Secretary, and was also a Director.  Sichenzio has been associated 

with various registered broker-dealers for over 30 years.  Sichenzio was affiliated with a 

registered broker-dealer in New York City from October 2010 through the present, 

including during the time he engaged in the fraudulent conduct set forth in this 

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Complaint. 

15. Gil de Rubio, age 65, is a resident of Freehold, New Jersey.  Gil de Rubio 

owns, in whole or in part, several New Jersey-based companies engaged in real estate, 

construction and landscape contracting.  Gil de Rubio raised substantial amounts of 

monies selling PAI’s securities to investors and received substantial amounts of investor 

funds from PAI.   

BACKGROUND OF THE RELEVANT ENTITIES 

16. PAG is a private Austrian company founded in 2006 for the purpose of 

crude oil processing technology development, licensing and commercialization.  PAG 

had certain intellectual property rights, which were in the process of being patented, to an 

application for “cold-cracking,” a heavy oil processing method that uses pressure wave 

emissions to purportedly change the molecular composition of heavy oil compounds.  

Laura was introduced to PAG in or around December 2008.   

17. Innovative Crude Technologies, Inc. (“ICT”).  Laura originally 

incorporated an entity named Pristec America, Inc. in New Jersey in February 2010 for 

the purported purpose of providing “consulting services.”  In October 2010, Laura 

renamed this entity ICT.  During the relevant period, Laura and Sichenzio each owned 

50% of ICT.  In corporate documents, Laura listed the purpose of ICT as “Oil 

Technology Consultant.”  In early 2011, pursuant to a purported financing contract 

between ICT and PAG, ICT acquired an equity interest in PAG.  Accordingly, during 

most of the relevant period, Laura and Sichenzio together owned 33% of PAG through 

ICT.  The rest of PAG was owned primarily by European investors.  In February 2016, 

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PAG increased its outstanding shares, reducing ICT’s ownership of PAG to 

approximately 23.3%.   

18. Pristec America, Inc. (“PAI”).  In September 2011, ICT and PAG 

incorporated a new New Jersey entity named Pristec America, Inc. (“PAI-NJ”), of which 

they each owned 50%.  In September 2013, ICT and PAG incorporated an entity in 

Nevada also named Pristec America, Inc. (“PAI-NV”) that was also jointly owned by ICT 

and PAG.  This Complaint uses “PAI” to refer to both PAI entities.  At this time, the 

purpose of PAI was described as a “strategic alliance partner” to PAG responsible for 

business development and introduction of the technology in the U.S., Canada, Mexico 

and Columbia.  PAI itself had no independent research, development or manufacturing 

operations.  It had no offices and no actual employees. 

FACTS  

A.  Background of Relationships Among Defendants  
 

19. Laura introduced Sichenzio to PAI in April 2010 shortly after he 

incorporated it.  At the time, Laura owed Sichenzio at least $1.3 million arising from a 

failed real estate venture and from loans Sichenzio made to Laura for his personal use.  

Laura convinced Sichenzio to become involved in PAI, in part, as a potential means for 

Sichenzio to recover the monies Laura owed him.  In 2010, Sichenzio provided about 

$918,000 to Laura through Laura’s attorney trust account, with the understanding that 

Laura would use some of the money to purchase ICT’s equity interest in PAG and that 

Laura could use the remainder of these funds as he chose without restriction.   

20. Laura introduced Gil de Rubio to PAI in 2010.  At the time, according to 

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Gil de Rubio, Laura owed Gil de Rubio at least $1 million in connection a Piscataway, 

N.J., real estate project, 1530 Glenwood Properties LLC (“1530 Glenwood”).  Gil de 

Rubio acquired part of 1530 Glenwood because Laura’s credit rating prevented the 

project from obtaining loans, and based on Laura’s commitment to take responsibility for 

any liabilities arising from his time managing 1530 Glenwood.  Laura, however, failed to 

pay Gil de Rubio and the other contractors to whom he owed money.    

21. Separately, Laura owed Gil de Rubio and his family $850,000 in 

connection with personal loans and other unsuccessful business ventures.  Gil de Rubio 

had no documented equity interest in PAI, but, according to Gil de Rubio, Laura 

promised Gil de Rubio that he would eventually give him a percentage of the company.  

Gil de Rubio also believed that the only way Laura would be able to compensate and 

repay him and his family for their losses and loans was through PAI.  

B. Defendants Begin Soliciting Investments Through False Pretenses 

22. The Defendants made little distinction between the two active Pristec 

America entities and used them interchangeably in dealings with investors.  For example, 

Laura drafted investment contracts under the name of “Pristec America, Inc.,” described 

as “a corporation created under the laws of the State of New Jersey” during late 2010 and 

early 2011, when no such corporation existed.  After PAI-NV was incorporated, some 

contracts described PAI as a New Jersey corporation but provided a Nevada address; 

other contracts referred to the Nevada corporation but used a Staten Island address, and 

some contracts directed payments to be made to ICT “d/b/a Pristec America.”   

23. In or around August 2010, Laura and Sichenzio began soliciting money 

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from a large number of investors, many of whom ultimately signed or agreed to 

investment contracts.  Laura and Sichenzio misled these investors in a variety of ways.  

For example, they falsely claimed that PAI owned and had exclusive worldwide rights to 

profit from the cold-cracking technology.  In fact, PAI had no license to use PAG’s 

technology until 2014, and that license granted only PAI-NV exclusive rights in only  

countries, the U.S., Mexico, Canada and Colombia, with non-exclusive rights elsewhere.  

24. Second, Laura and Sichenzio made baseless claims regarding the projected 

amount and timing of revenue investors would receive.  For example, the majority of the 

revenue sharing contracts promised PAI investors a set payoff per oil barrel processed 

and contained schedules showing production dramatically increasing.  Some contracts set 

forth increases from 10,000 barrels/day in month 1 to 200,000 barrels/day in month 13, 

with profits continuing at that rate for at least five years in some contracts, and even 

longer in others.   

25. In truth, during both the 2010-2013 and the 2013-2017 periods no contracts 

for commercial oil production actually existed.  Further, during the 2010-2013 period PAI 

had no license to the technology and PAI investors had no contractual right to any 

revenues that PAG might generate from the technology.  

26.   According to the CEO of PAG, there was no corporate action authorizing 

PAI, or Laura or Sichenzio, to enter into revenue sharing contracts, and any U.S. 

investments were expected to be in the form of convertible loans.   

27. Laura drafted and was a signatory, as PAI’s Chairman or President, on all 

of the investment contracts; Sichenzio, as PAI’s Vice Chairman, was also a signatory on 

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many of these contracts; and Gil de Rubio was a signatory on certain contracts for 

investors he solicited.   

28. Multiple statements in the contracts were untrue.  Most significantly 

misleading were statements claiming that funds would be used for working capital 

purposes and that full-scale commercial oil processing was expected to begin imminently.  

In reality, PAI had no contractual arrangements for commercial oil production.  And, 

from the very start, Laura commingled, misappropriated and misused millions of dollars 

of investor funds.  

29. For example, a revenue sharing contract with Investor A, dated June 2011, 

stated that Investor A’s funds would be used to build two carbon activator units and that 

liens would be filed on the units as collateral for the investment.  These statements were 

false, as no new units were ever built, and liens were already in place on the existing 

activator units securing pre-existing debt.   

30. In fact, Laura almost immediately misappropriated the majority of Investor 

A’s money for other uses.  Investor A wired $500,000 to PAI’s bank account on June 7, 

2011.  By the next day, June 8, 2011, Laura had depleted the entire pre-existing balance 

in PAI’s account ($18,000).  That same day, Laura promptly began spending Investor A’s 

money by sending $133,000 of those funds to Sichenzio, $15,000 to a friend and $10,000  

to himself.  The following day, June 9, 2011, Laura used $50,000 of Investor A’s money 

to repay a June 6, 2011 infusion of $50,000 from Gil de Rubio that Laura had used 

primarily pay for a luxury suite at the Meadowlands Stadium and for concert tickets.  

Laura used Investor A’s money the following month to pay: $170,000 in cash and 

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transfers to himself; $25,000 to a white collar defense lawyer; over $15,000 in other 

personal expenses such as liquor, gym fees, sporting goods and gas; and $22,000 to other 

friends and associates. 

31. The Defendants directed investors to write checks, or wire funds, primarily 

to two attorney trust accounts associated with Laura’s Staten Island law partnership and 

to a PAI business checking account.  Laura controlled the movement of PAI funds into 

and out of these accounts, and was the sole signatory on the PAI account.  Sichenzio and 

Gil de Rubio were aware of the amount of investor funds being raised because they 

helped Laura solicit investors, induce these investors to sign contracts, and collect funds.  

By April 2013, the Defendants had raised over $8.5 million from approximately 70 

investors. 

C.   Laura Misappropriates Investor Funds    

32. During this period, Laura misappropriated over $4 million of the $8.5 

million of PAI investor funds, including approximately $1.8 million that Laura 

transferred to his personal accounts, withdrew in cash or paid himself in checks written to 

cash; and over $1.3 million in personal expenditures, including almost $340,000 for 

entertainment, including luxury suites at various sports stadiums, tickets to other sporting 

events and live shows, and payments to casinos; over $250,000 in payments to purported 

consultants or other individuals and entities who, in reality were acquaintances of Laura 

who provided no (or nominal) goods or services to PAI; $84,000 in rent, deposits, 

moving expenses and home-maintenance fees, including for Laura’s personal home; 

$15,000 in payments made to Laura’s “Fast Break Basketball Center” business; and 

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$3,500 in payments for educational expenses for Laura’s college-aged child.  Laura also 

transferred approximately $1 million of investor funds to Sichenzio.  

33. Of the remaining approximately $4.4 million in investors’ funds, only 

$2.67 million was wired to PAG.  About $300,000 was returned to original investors who 

demanded their money back, and those repayments appear to have been made from 

subsequent investors’ funds.   

34. Laura subsequently told an accountant for PAI that he had “borrowed” a 

large amount of investor funds for his personal use and intended to pay these amounts 

back.  Laura, however, minimized the amount of money he had “borrowed,” claiming it 

was approximately $1 million.  Laura did not repay any of this money to PAI, nor did he 

report any of the funds he misappropriated from PAI as wages or salary.   

35. No later than September 2011, the Defendants began to receive complaints 

from PAI investors, including Investor A, as well as requests for accountings of how their 

money had been spent.   

36. From 2011 through the end of May 2013, Laura transferred over $1 million 

in PAI investor funds to Sichenzio’s personal bank account.  Sichenzio knew or 

recklessly or negligently disregarded that Laura was misappropriating PAI investor funds 

because he was aware that PAI was earning no revenues at this time.  In addition to the 

$1 million Sichenzio received from Laura, Sichenzio directly misappropriated $60,000 

from two PAI investors by depositing their investments into his personal bank account 

and using the money for personal expenses.   

37. During this period, Gil de Rubio loaned money to Laura for personal use.   

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At Gil de Rubio’s request, Laura agreed to repay these monies from investor funds.  A 

number of investors were never informed that their money would be used to repay Gil de 

Rubio for personal loans he made to Laura.   

38. By at least October 2011, Gil de Rubio was aware, or recklessly or 

negligently disregarded, that Laura could not account for, or was misdirecting, large 

portions of PAI investment funds.  During this time, Gil de Rubio sent multiple emails 

reflecting his understanding that Laura could not account for investor funds, and 

acknowledging his responsibility for those funds.  For example, in February 2012, Gil de 

Rubio emailed Laura about requests from PAG for funds to pay development expenses.  

He wrote: “I’m not certain where you spent the previous money I sent and I’m not sure 

why you are running short.  Please respond and let me know a break down on what you 

have spent so far.  As you know I am responsible for all money raised here in the U.S…”    

39. In at least January, February, March, October and November of 2012, Gil 

de Rubio received spreadsheets from the CEO of PAG showing funds PAG had received 

from PAI.  These spreadsheets reflected that Laura failed to send PAG a significant 

amount of the investor funds that Defendants had raised.  Gil de Rubio, acknowledging 

the significance of these payment shortfalls, suggested that the CEO of PAG speak to 

Sichenzio.  And in September 2012, Gil de Rubio received an email forwarded by the 

CEO of PAG discussing concerns about potential PAI shareholder litigation if investors 

learned that “Joe [Laura] has taken huge commissions…” 

40. As further evidence that Gil de Rubio knew that Laura was using PAI 

investor funds for improper purposes, in March 2012, Laura provided PAI funds to Gil de 

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Rubio’s company as repayment for personal services Gil de Rubio provided Laura 

unrelated to PAI.  By July 2012, Gil de Rubio was aware that Laura had directed the 

majority of a $200,000 investment in PAI to Sichenzio for his personal use.  And in 

September 2012, Laura provided Gil de Rubio with PAI funds for the purpose of 

repaying a personal debt to Gil de Rubio’s sister. 

41. On May 1, 2013, only $311.94 was left in PAI’s bank account, PAI owed 

at least $400,000 in outstanding convertible loans to investors, plus interest, and PAI 

owed an unknown amount of debt incurred by Laura.  Neither PAI nor PAG had yet 

entered into a commercial contract for use of the cold-cracking technology.  Laura and 

Sichenzio explained to Gil de Rubio that PAI was “over” unless they could raise 

additional funds. 

D. Defendants’ Solicitations of Investments from June 2013 through January 2017 
 
42. Between June 2013 and January 2017, the Defendants raised $3.7 million 

from approximately 80 individuals to whom they offered securities of PAI and PAG.  

These securities were in the form of revenue sharing, stock purchase and convertible loan 

agreements.  The majority of the investments were in revenue sharing agreements in 

amounts ranging from $2,500 to $310,000.  Many of these individuals were 

inexperienced investors and/or of modest wealth and income, including barber shop 

employees, construction workers and tradesmen, an HVAC technician and a retired 

police officer.  Defendants led many of these investors to believe they were being offered 

a unique and valuable investment opportunity available only to “friends and family.”   

43. Laura drafted and was a signatory on all the revenue sharing, convertible 

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loan and share purchase contracts.  Sichenzio was a signatory on these agreements 

through at least mid-2014, in his capacity as a PAI officer.   

44. The majority of the investment funds were deposited, or wired, into and 

then pooled in one of several bank accounts in the name of PAI-NJ, ICT, and PAI-NV, 

including bank accounts in Staten Island through at least May 2014.  Laura had control 

over, and was the sole signatory on, these accounts at all relevant times.  Sichenzio and 

Gil de Rubio solicited investor funds and directed investors to write checks or wire funds 

to these accounts. 

E. False Statements about the Use of Investment Proceeds and Defendants’ 
Misappropriation and Misuse of Investor Funds  

 
45. Laura controlled the flow of funds into and out of the PAI and ICT 

accounts.  Each of the investment agreements made representations about how investors’ 

funds would be used.  Specifically, all of the contracts stated that either PAI (referring to 

either the New Jersey or Nevada corporation) or “Pristec” (defined as PAI and PAG, 

collectively) was in need of financing for “working capital” in order “to fund the 

international roll-out of [its] patented technology.” 

46. Laura also made specific verbal misrepresentations to various investors 

about the use of funds, claiming to many investors that funds would be used to buy or 

build the units or components that housed the technology.  For example, Laura made the 

following misrepresentations to investors prior to their investments: 

a. Laura told Investor C that funds from his investment would be used for 

machinery.  Investor C invested on or about June 5, 2014. 

b. Laura told Investor D that the money from his investment would be 

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used to procure or build cold-cracking units, or would be spent on 

lawyers, patents and accountants.  Investor D first invested on or about 

June 10, 2014, and invested additional funds in January and May 2015. 

c. Laura told Investor E that his funds would be used for the expansion of 

the technology and to build equipment.  Investor E invested on or about 

June 12, 2015. 

d. Laura told Investor F that investor funds would be used to build cold-

cracking machine demonstrations in Europe.  Investor F invested on or 

about June 20, 2016. 

47. Gil de Rubio made similar misrepresentations about the use of funds, 

omitting to disclose what he knew about Laura’s misappropriation and other red flags of 

financial misconduct.  For example, Gil de Rubio made the following misrepresentations 

to investors prior to their investments: 

a. Gil de Rubio told Investor G that the funds would be used to buy or 

build more equipment.  Investor G invested on or about April 24, 2014.  

b. Gil de Rubio told Investor H that his money would be used to put units 

together for trial runs.  Investor H invested on or about June 5, 2014. 

c. Gil de Rubio told Investor I that his funds would be used for patents 

and attorneys’ fees.  Investor I first invested on or about November 10, 

2014, and invested additional funds later in November and December 

2014. 

48. In truth, no units were purchased or manufactured during the relevant 

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period.  Moreover, contrary to the representations made, a significant portion of the 

investors’ funds raised during this period were used to pay for Laura’s personal expenses, 

to make payments to Sichenzio and Gil de Rubio and to pay for businesses and debt 

unrelated to PAI’s purported oil processing technology activities.   

49. From mid-May 2013 through January 2017, Laura misappropriated 

approximately half of the investor funds he raised.  He also misappropriated proceeds 

from a joint venture partner of PAI (the “JV Partner”).  In total, Laura misappropriated at 

least $3.7 million from PAI accounts for his personal benefit, for the benefit of his family 

and other associates, to pay non-business expenses, and for the benefit of Sichenzio and 

Gil de Rubio. 

50. First, Laura directly took about $1.1 million through transfers to his 

personal accounts, cash withdrawals and checks written to himself. 

51. Second, Laura misappropriated an additional approximately $2 million that 

he spent for his own benefit or sent to individuals and entities who provided no 

documented services to PAI in the relevant period.  For example, Laura spent or 

transferred: 

a. $440,900 to various individuals and entities who provided no documented 

services or goods to PAI.  Laura subsequently admitted that some of 

these individuals were contractors related to 1530 Glenwood, which 

was owned by Gil de Rubio, Laura’s sister, and Laura’s close friend;     

b. $220,000 to settle a lawsuit brought against Laura, 1530 Glenwood and 

Laura’s close friend, alleging a real estate-based scam; 

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c. $170,000 to an individual and his company, both of which were 

connected to that same real estate scam;  

d. $213,800 to an individual (and his purported consulting company) who 

allegedly introduced Laura to PAI but provided no documented services 

during the relevant period;   

e. $113,100 to a friend, who Laura claimed functioned as Laura’s 

personal driver; 

f. $87,464.35 to insurance and medical companies for expenses for 

himself, his family and others;   

g. $46,600 on dining and travel having no, or only pretextual, relation to 

PAI business – which does not include hundreds of thousands of dollars 

Laura and Sichenzio spent on first class travel and luxury 

accommodations at times when PAI was struggling to stay afloat;   

h. $35,700 to Ally Financial and other entities for personal loans; 

i. $24,200 on retail expenses, including groceries, clothing at the large 

retail store, flowers and party supplies; 

j. $17,250 on his college-aged child’s education; 

k. $13,500 on rent for his personal residence; and 

l. $12,700 on fees paid to health clubs and gyms; $10,000 on automobile 

expenses, including EZ-Pass and gasoline.  

52. Defendants’ misappropriation also included depositing certain investor 

funds directly into their personal bank accounts.  

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a. On April 7, 2015, Laura deposited into his personal account $10,000 

from an investor that should have gone to PAI and then spent the 

money on cash withdrawals, retail goods and payments to his ex-wife 

and a friend.  

b. Sichenzio deposited into his personal checking account two checks 

each in the amount of $25,000 from two PAI investors on June 25, 

2013, and a $15,000 check from a third PAI investor on August 8, 

2013.  Sichenzio spent these funds on cash withdrawals and personal 

expenses, including dining, college tuition fees for his child, mortgages, 

personal credit cards, and landscaping.   

c. On October 24, 2014, Gil de Rubio deposited into his personal account 

an investor check for $20,000.  And Gil de Rubio took another 

investor’s $100,000 investment in PAG equity as a purported “loan 

payback” without even first depositing it in any PAI or ICT or PAG 

bank account.  

53. Although Sichenzio and Gil de Rubio each transferred funds to PAI or ICT 

bank accounts controlled by Laura during the relevant period, each Defendant has made 

conflicting and self-serving statements as to whether those funds were capital 

contributions or loans to PAI or for Laura’s personal use.  In any event, Sichenzio and Gil 

de Rubio each received amounts well in excess of what they provided to PAI:  Sichenzio 

received a net of at least $522,000 and Gil de Rubio received a net of at least $249,000. 

54. Laura and Sichenzio have, on certain occasions during the scheme,  

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admitted to certain business associates that they took funds from PAI for themselves.  

F.  Defendants Knew Their Representations Regarding the Intended Use of 
Investor Funds Were False  

 
55. Laura knew that, and Sichenzio and Gil de Rubio knew or recklessly or 

negligently disregarded evidence that, Laura was routinely misappropriating investors’ 

funds when they solicited investors between 2013 and 2017 by making false 

representations that investor funds would be used only for legitimate business purposes.  

56. Laura knew at the time he made these representations that he had routinely 

used, and would continue to use, investor monies for his personal benefit, as he had no 

other source of consistent income at this time.  And Gil de Rubio and Sichenzio could 

not, in good faith, make their representations as to the specific use of the investors’ 

monies, given their knowledge that Laura routinely used investor monies for improper 

purposes and that there was no oversight or control over his use of investor monies.   

57. By further example, Laura, Sichenzio and Gil de Rubio conducted an 

aggressive investor pitch to Investor D in April 2015, during which the investor requested 

financial statements and disclosure documents.  Laura was evasive and put off the 

request.  He subsequently admitted to Gil de Rubio that he could not provide these 

documents because, among other things, he had never completed accurate bookkeeping 

and never filed tax returns for PAI.  Laura then provided Gil de Rubio with redacted PAI 

bank statements, and Laura explained that the redactions indicated payments made to 

non-PAI related individuals and entities.  Gil de Rubio discussed this information with 

Sichenzio, who took no action in response.  Gil de Rubio did not inform the investor of 

what Laura had shown him or what it meant, i.e., that Laura was commingling PAI funds 

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and misappropriating them for non-PAI uses.  

58. Gil de Rubio has also admitted that, by at least no later than the summer of 

2015, he knew that Laura and Sichenzio had taken large amounts of money from PAI for 

personal use.   

G. Laura Made Additional Material Misrepresentations and Sichenzio and Gil de 
Rubio Aided and Abetted those Misrepresentations 

 
59. As part of their scheme to defraud investors, the Defendants misled 

investors with exaggerated, unfounded representations about returns, misleading 

representations about the financial health of PAI, and misrepresentations about their own 

investment in PAI or PAG. 

 a. The Revenue Sharing Contracts   

60. The revenue sharing contracts provided for returns based on a specified 

share of revenue per barrel of oil produced and was based on the amount invested, 

typically $.001 for each $10,000 invested.  The contracts included an estimated schedule 

for oil production and made representations about investor returns based on the timing 

and volume of production set forth in the detailed personalized schedules.  These 

scheduled payouts, over five years of production, amounted to over a 1000% return and, 

in some cases, over a 2000% return on investment.   

61. For example, a contract for an investment of $100,000 stated that, at initial 

production of 10,000 barrels of oil per day, the investor would receive $100 per day; at 

peak production of 200,000 barrels per day – which, according to the schedule provided, 

would be reached within 12 months – the investor would receive $2,000 per day.  The 

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contract, accordingly, projected that the investor would receive over $2.84 million in 5 

years based on a $100,000 investment.  

62. None of these contracts, however, contained any explanation of the basis 

for these projections or any cautionary language regarding the various factors that could 

interfere with or prevent the investors from receiving the astronomical, scheduled rate of 

returns on investment, or indeed any returns.   

63. In addition, the written contracts dated between June and September of 

2013 specifically represented, without reasonable basis, that PAI “anticipates production 

to begin on or about April 1, 2014.” 

64. The revenue sharing contracts Laura wrote also included false statements 

about PAI’s ownership of the technology and facilities.  Contracts between investors and 

either PAI-NJ or PAI-NV claimed that PAI “owns exclusive global rights to certain 

‘TECHNOLOGY’ for heavy oil upgrading and refining including intellectual property 

rights, knowledge and facilities for cold cracking and reforming, visbreaking and 

desulpherization, remote activation and shielding[.]”  In truth, PAI never owned exclusive 

rights to the oil processing technology.  And while it eventually obtained a licensing 

agreement with PAG in 2014, that agreement limited PAI’s exclusive rights to just four 

countries.  

65. Indeed, as late as July 23, 2014, Laura acknowledged in an email to the 

CEO of PAG that no license agreement had yet been finalized.  In late October 2014, 

Laura and the inventors documented and backdated to October 31, 2013 a “Patent, 

Technology And Know-How” license to PAI-NV from the inventors of the cold-cracking 

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technology, who  “own[] exclusively and beneficially all rights in and to” the technology.  

The license granted PAI-NV the “exclusive right” to use the existing patents and 

information only in the U.S., Mexico, Canada, and Colombia, and granted only non-

exclusive rights elsewhere.  There is no evidence that PAI-NJ ever owned any valid 

intellectual property or “knowledge” rights, or that any PAI entity ever owned rights to 

any facilities.  

 b. The Convertible Loan Agreements   

66. The convertible loan agreements provided that the investor would lend a 

specified amount of principal to PAI for a certain time period along with a stated interest 

rate, typically 12 months and 10%, respectively.  The convertible loan agreements falsely 

referred to PAI’s “international roll-out of its patented . . . technology.”  PAI had no 

patented technology.   

67. Because PAI never generated income from licensing the oil processing 

technology, most of the convertible loan investors did not receive their principal back.  

Moreover, any interest payments investors received were minimal, and some appear to 

have been paid using funds derived from subsequent investors.  

 c.  The Share Purchase Agreements    

68. The PAG share purchase agreements offered stock of PAG as a defined 

percentage ownership of the company, at a valuation of $100,000,000, or $952.38 per 

share.   

 d.   Defendants’ Additional Misrepresentations Regarding 
Commercial Development of the Oil Processing Technology 

 
69. The Defendants made oral misrepresentations in conversations with 

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various potential investors which lacked a reasonable basis and misleadingly suggested 

that PAI had or was imminently signing deals that would result in deployment of the 

technology in a commercial setting within months, and that payouts on investor contracts 

would begin shortly.  For example, the Defendants made the following 

misrepresentations to investors prior to their investments: 

a. Sichenzio and Laura told Investor J, who invested on or about June 6, 

2013, that production would take place within 1 to 2 years.   

b. Laura told Investor K, who invested on or about August 8, 2013, that 

there was a “cutoff date” to make investments because production 

would begin in April 2014 as represented in the investment contract.  

c. Gil de Rubio told Investor G, who invested on or about April 24, 2014, 

that PAI was going to go public, and that Investor G would be earning 

tens of thousands of dollars within several months to a year, based on a 

purported agreement with Venezuela and a purported contract with 

China worth a “couple billion.”  

d. Laura and Gil de Rubio told Investor C, who invested on or about June 

5, 2014, that production contracts had been signed in Venezuela and 

Estonia, even though those agreements were only for pilot tests, not 

production.   

e. Laura falsely told Investor D, who invested on or about June 10, 2014 

and invested additional funds in January and May 2015, that PAI had 

been offered $500 million from the United Arab Emirates for its 

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technology, that they had a “sure deal” elsewhere that would make 

them billions, and that there was a lender in the country of Georgia 

planning to invest $12 million. 

f. Gil de Rubio and Laura told Investor H, who invested on or about June 

5, 2014, that there would be a one year turnaround before payouts 

began, and that if that didn’t happen, he could “cash out” his 

investment.   

g. Gil de Rubio told Investor L, who invested on or about November 5, 

2014, that he would begin getting payouts within 18 months.   

h. Laura told Investor M, who invested on or about February 13, 2015, 

that PAI would go into production in 6 months to 1 year.  Gil de Rubio 

told the investor that he would earn between $50,000 and $250,000 a 

year on a $50,000 investment.   

i. Laura told Investor N, who invested on or about July 29, 2016, that PAI 

was “on the verge” of a major production contract.   

j. Laura told Investor O, who invested in a convertible loan on or about 

January 17, 2017, that PAI was just about to close a big deal, and that 

Investor O needed to invest shortly otherwise he would not need 

Investor O’s money. 

70. In addition to oral misrepresentations, Laura wrote a PAI “Business Plan” 

that Gil de Rubio provided to at least two investors by in 2013 and 2014.  The Business 

Plan suggested that commercial contracts were imminent – e.g., “After reviewing the 

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results of the pilot in Venezuela, PDVSA [the Venezuelan state-owned oil agency] has 

indicated to Pristec its desire to roll this technology out commercially within 

Venezuela… Over a six year time horizon we will reach [total] production capacity of at 

least . . . One Million Four Hundred Thousand (1,400,000) bpd utilizing our various 

business models.”  The Business Plan carried no disclaimers or disclosures of risk factors, 

or of the actual obstacles PAI was already experiencing in Venezuela. 

71. Indeed, as early as November 2013, Sichenzio conceded to one investor 

that it was unclear how PAI would monetize this relationship with PDVSA because the 

Venezuelan government was fiscally unstable. 

72. Formal testing with PDVSA did not take place until April 2014.  

According to a November 2014 letter that Laura drafted to the Venezuelan authorities, 

which Sichenzio reviewed, the unit in Venezuela “lied idle and non-working” after the 

April test through at least November 25, 2014, and PDVSA was “preventing [PAI] from 

obtaining business internationally.”  Laura was also aware that the research and 

development arm of PDVSA had circulated negative internal reports concerning the 

technology to potential clients.  Venezuela declined to enter into a commercial contract to 

use the technology.  

73. Indeed, PAI and PAG repeatedly failed to move past the pilot stage to any 

contract for commercial use of the technology.   

 e. Defendants’ Knowledge of the Substantial Risks Impacting 
Projected Investor Returns    

74. The Defendants were aware of, or recklessly or negligently disregarded, 

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that PAI’s rights to use the oil processing technology were non-existent until 2014 and 

then PAI’s exclusive rights were limited to only four countries.   

75. The Defendants also had no reasonable basis to anticipate that production 

would begin on or about April 2014, as set forth in various revenue sharing agreements in 

2013, and no reasonable basis to assert the less specific projections and valuations.   

76. Defendants’ representations were based primarily on purported anticipated 

contracts with entities either owned or regulated by foreign governments, and with 

business partners who often proved to be unreliable.  This presented numerous political, 

legal, regulatory and economic hurdles and risks with which Defendants were woefully 

inexperienced and unsuccessful in dealing.  Defendants failed to adequately disclose 

these risks to various investors. 

77. For example, the oil processing technology was entirely untested in a 

commercial setting and it had been rejected on at least one occasion because of safety 

concerns.  Even assuming the technology was effective, to reach the projected oil 

production levels Defendants would have had to fund the manufacture of numerous 

additional cold-cracking units, each costing more than $1 million.  Defendants, however, 

had insufficient funds and no existing contracts to manufacture the needed units. 

78. Indeed, during the relevant period, PAG never had more than two 

mechanical units capable of processing oil.  One of those units was located in Venezuela, 

where, after a 2011 pilot agreement, it took nearly 2 years of preparatory work to begin 

limited testing in March 2013.  PAI itself had no units. 

79. As late as 2017, PAG’s oil processing unit was described as no more than a 

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“crude machine” by Investor O, who had some knowledge of oil refining and who visited 

Austria to observe the cold-cracking technology. 

80. Indeed, Defendants documented their own awareness of the risks factors. 

For example, in August 2013, Laura helped to draft a four-page statement of Risk Factors 

in connection with a proposed Series A offering that was not completed.  The risk factors 

included: 

a. “We have incurred net losses since our inception and expect to incur 

net losses for the foreseeable future.” 

b. “Our technologies are commercially untested, and therefore, the 

successful development and commercialization of our technologies 

[remain] subject to significant uncertainty.  We completed a 

commercial pilot program and are currently conducting an industrial 

pilot program.  The results of these pilot programs are not a guarantee 

of future economic viability, and other pilot programs are contemplated 

to continue calibrating our technology.  Commercial contracts to install 

or use our technologies are incumbent upon several certifications and 

transaction details such as licensing terms.” 

c. “We may not be able to obtain and maintain intellectual property 

protection for our technology and product and, in the future, may be a 

party to intellectual property litigation that could adversely affect our 

business….Our existence depends, in part, on the patent rights licensed 

from third parties with respect to our technologies….Our patent 

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positions and those of other similar companies are uncertain and 

involve complex legal and factual questions.” 

d. “The assumptions underlying our projections may not prove to be 

reasonable, and actual results achieved during the projected periods 

may vary materially from the projections….Our financial projections 

are based on generalized assumptions relating to, among other things, 

acceptance of our products and technologies and the timing of the 

introduction and adoption of such products and technologies….The 

assumptions underlying the projections may not prove to be reasonable, 

and actual results achieved during the projected periods will inevitably 

vary from the projections.” 

81. Sichenzio received the statement of Risk Factors and was aware, or 

negligently or recklessly disregarded, the disclosures of significant risk.  Sichenzio also 

knew, based on emails from Laura in April, August and September 2013, and in October 

2014, that PAI had no valid license agreement for the oil processing technology.  

82. Gil de Rubio received an email from Laura no later than September 11, 

2013 which made clear that PAI had no valid license to the technology.  Gil de Rubio 

also received the statement of Risk Factors no later than September 2015.  In addition, he 

received documents from Laura throughout the relevant period that indicated that PAI 

had no ownership of any patents. 

83. Given this history, and the above-referenced risks, all of which Defendants 

knew or recklessly or negligently disregarded, the Defendants had no reasonable basis for 

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their representations regarding: (i) when PAI, or for that matter PAG, would enter into oil 

processing contracts; (ii) when oil processing would commence; (iii) what oil processing 

volume would be achieved and when; and (iv) how much, if any, revenue would be paid 

to PAI investors.     

 6. Defendants’ Additional False Statements   

84. Sichenzio and Gil de Rubio made multiple statements and omissions that 

materially misled investors into believing that Defendants had “skin in the game,” that 

they were financially trustworthy and/or had business expertise.  For example, prior to 

Investor J making his investment on or about June 6, 2013, Sichenzio falsely told him, in 

substance, that Sichenzio had invested many millions of his own personal funds in PAI. 

85. Gil de Rubio falsely told certain investors that he was an investor in PAI.  

For example, Gil de Rubio made the following misrepresentations to investors prior to 

their investments:  

a. He told Investor G, who invested on or about April 24, 2014, that he 

had invested “all his savings” in PAI. 

b. He told Investor D, who invested on or about June 1, 2014, that he had 

invested over $1 million in PAI. 

c. He told Investor H, who invested on or about June 5, 2014, that he was 

a “passive investor” in PAI. 

d. He told Investor C, who invested on or about June 5, 2014, and Investor 

P, who invested on or about December 16, 2014, that he was an 

investor in PAI.   

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e. He told Investor Q, who invested on or around September 30, 2014, 

and later invested in October 2014 and April 10, 2015, that he had 

invested and “put a lot [of money] in” to PAI.   

f. He told Investor L, who invested on or about November 5, 2014, that 

he was an investor and would only be paid as an investor.  

g. He told Investor I, who invested on or about November 10, 2014, that 

he had invested more than $50,000. 

h. He told Investor N, who invested on or about July 29, 2016, that he was 

an investor and had put money into PAI. 

86. When the Defendants discussed their own financial contributions and 

Laura’s claimed business expertise, the Defendants did not disclose to various investors, 

including  Investors D, H, and J, that Laura owed Sichenzio, Gil de Rubio and other 

individuals millions of dollars from other ventures that had incurred significant losses due 

to Laura’s mismanagement.  Defendants also knew - - but did not disclose - - that Laura’s 

poor financial history precluded Laura from receiving business or personal credit, or 

loans or mortgages through banks or other typical financial institutions.  In fact, Laura 

could not obtain even a credit card and was reliant on friends or relatives for any credit-

based transactions. 

H.      Defendants’ Attempts to Conceal their Fraudulent Scheme 
 
87. In order to conceal the Defendants’ scheme to defraud investors, Laura 

repeatedly failed to provide accurate and complete information to an accountant hired by 

PAI concerning incoming and outgoing PAI funds.  After November 2013, Laura never 

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provided the accountant with access to PAI or ICT bank statements.  Laura ensured that 

no tax returns could be filed for PAI or ICT, and that no accurate financial disclosure 

records – which would have revealed the full extent of Laura’s misappropriation and 

misuse of PAI funds – could be compiled.   

88. In furtherance of their scheme to defraud, Defendants also concealed their 

misappropriation of investor funds and PAI’s precarious financial condition by not 

maintaining a complete set of executed contracts, a contemporaneous list of investors, the 

amount of their investments, and the interest payments due or revenue payments to which 

they were entitled.  Defendants also did not document funds they purportedly lent to, or 

borrowed from, PAI. 

89. In order to conceal and further the scheme, Laura, Sichenzio and Gil de 

Rubio continued to make misrepresentations to investors who asked questions. 

90. For example, in November 2014, in response to an investor’s request that 

his $100,000 investment be returned, Laura stated that the investor would receive a 

$250,000 payment “in lieu of the schedule[d] revenue share payments which were to total 

One Million Six Hundred and Sixty Eight Thousand ($1,668,000.00) in Sixty (60) 

payments once production began.”  Laura claimed that the investor’s repayment would 

take place after a purported scheduled $15 million “funding round”—which never 

occurred.  The investor never received his money back. 

91. Sichenzio, in November 2014, on the same day that he received a copy of 

Laura’s letter concerning the problems delaying the Venezuelan pilot program, emailed 

an investor stating that a pilot contract with CNPC - the Chinese government petroleum 

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company – would take only 90 days and that “all goals set forth in contract will be easily 

attainable due to succes[s] of certified tests in . . .  in [V]enezuela.”   

92. Gil de Rubio made multiple false claims to Investor A, who regularly 

complained to Laura, Sichenzio and Gil de Rubio about red flags of potential fraud he 

observed after he invested.  For example, in May 2014, Investor A expressed concerns 

that PAI might be “just another one of those orchestrated scams, quasi-Ponzi schemes, 

etc…” and asked for a financial status report and a representation in writing as to how his 

$500,000 investment had been spent.   Gil de Rubio responded by claiming to have 

personally provided $700,000 to PAI and falsely stating that “I have seen the company 

checkbook register and have received documentation of every transaction involving [the 

purported $700,000].  I have yet to witness anything questionable.”  He stated, without 

basis, that the investor’s shares would be worth “$10,000 per share with the first deal we 

sign that are presently on the table.”  

93. Later, Gil de Rubio falsely claimed to Investor A that he had invested his 

life savings in PAI and that he had access to all of PAI’s financial and other records and 

that “every dollar” had been accounted for and was spent on PAI expenses, and that 

accordingly he was “confident that my investment is safe as I know everything we have is 

aboveboard.”  He further claimed that he was a “principal” of PAI, but that, due to his 

felony criminal record, he “chose not to be publicly acknowledged so not to expose the 

company to any discredit.”  

94. In mid-2016, Laura and Sichenzio approached an entity that eventually 

became the JV Partner and proposed that the JV Partner lend them the funds to repay 

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what they had wrongfully taken from PAI.  Laura also proposed that the JV Partner give 

Laura funds – $1.5 million – off the books, and in exchange Laura would give the JV 

Partner a license to certain purported PAI intellectual property for free.  The JV Partner 

was uncomfortable with this request and refused.  In discussions with the JV Partner 

during this time period, Laura and Sichenzio also admitted they did not pay any taxes on 

the money they misappropriated from PAI.  Gil de Rubio was aware of, and facilitated, 

these discussions with the JV Partner. 

95. Gil de Rubio received complaints from multiple other investors throughout 

2016, including at least one investor who asked for financial statements and other updated 

information.  Gil de Rubio did not provide the requested financial information.   

96. Laura and Sichenzio also repeatedly lied about the PAI investor funds 

Sichenzio took.  Sichenzio claimed in separate FINRA and SEC investigations that the 

funds he took from PAI were repayments for funds he earlier contributed – which, he 

said, were not investments but rather funds that he could take back at any time.  

Subsequently, Laura and Sichenzio claimed to investors and other individuals associated 

with PAI that Sichenzio’s initial payments were, in fact, investments but that Sichenzio’s 

lawyer advised to describe these payments as loans or advances in order to minimize 

liability.     

97. Gil de Rubio was aware that a full examination of PAI’s bank records 

would reveal the Defendants’ misappropriation and malfeasance, and he attempted to 

convince others to conceal the truth.  In August 2016, while the SEC investigation was 

ongoing, Gil de Rubio and others discussed the need to “Quantify debt by [Laura] and 

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pay back…Pay back or re initiate all debts.”  In an October 10, 2016 email, after he had 

been subpoenaed by the SEC staff, Gil de Rubio expressed concerns about the 

investigation.  Specifically, he urged the need to review bank statements and “work out 

an explanation for every transaction and find a way to resolve those transactions that may 

present a problem.” 

98. The Defendants did not inform PAG about the large quantity of revenue 

sharing agreements they had committed to on behalf of PAI until late 2016.  Between 

2010 and 2016, Defendants promised over $.90 per barrel in revenues to be paid to 

investors.  After learning about the contracts, the CEO of PAG described them as a 

“Damocles sword” threatening the livelihood of both PAI and PAG, because neither PAI 

nor PAG could pay out these promised amounts without bankrupting the companies.  In 

fact, PAG was seeking only $1.00 per barrel in royalties in its proposed oil production 

contracts, which no entity ever agreed to.  

99. Despite the misappropriation and financial disarray, in late 2016 and early 

2017 the Defendants offered to convert the PAI investors’ revenue sharing agreements 

and convertible loans into PAG equity, and even purported to convert some of these 

agreements into PAG equity without the investors’ consent.  Investors were not provided 

material disclosures concerning the conversion, such as the true financial condition of 

PAI or PAG.  Nor were investors advised what had been done with their funds to date or 

provided the basis for Defendants’ valuation of the proffered securities.   

I. Evidence of Ongoing Fraud 
 
100.  Despite having been removed from their officer roles at PAI by April 2017, 

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Laura and Sichenzio appear to be continuing to raise funds in the name of PAI, and 

continuing to spend those funds on themselves.  Laura opened a new bank account in 

PAI’s name in June 2017, and accepted $525,000 in apparent investment funds through 

December 2017.  Only $90,000 of these funds was transferred to PAG.  A majority of the 

investment funds appears to have been spent for the benefit of Laura and Sichenzio, 

including: legal defense fees for Laura in his personal capacity ($125,000); payments to 

no-show “consultants” ($71,700); checks or wires to Laura, and cash withdrawals 

($63,300); investor repayment ($25,000); payments to Sichenzio ($12,000); retail 

expenses ($9,740); and payments for insurance for Laura ($1,800). 

J. Laura Acted as an Unregistered Broker 
 
101.  Laura has never been registered as a broker or dealer with the SEC or 

associated with a broker or dealer registered with the SEC. 

102.  Throughout the relevant period, Laura actively solicited investments from 

dozens of investors and ultimately sold them securities of PAI and PAG.  Laura drafted 

the contracts and handled negotiations with investors, including providing advice about 

the merit of the investments.  He had telephone conversations or in-person meetings with 

many investors where he negotiated investment amounts and discussed returns.  Laura 

had control of the relevant bank accounts and regularly handled investor funds.   

103.  Laura acted as the “closer” for many of the investors introduced to PAI or 

PAG by the other Defendants and others, and handled most of the final negotiations, 

contracting, and payment details for the investors they solicited. 

  

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FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a)  

(Laura) 
 

104.  Paragraphs 1 through 103 are realleged and incorporated by reference 

herein. 

105.  Laura, by engaging in the conduct described above, directly or indirectly, 

in the offer or sale of securities, by the use of the means or instruments of transportation 

or communication in interstate commerce or by use of the mails: 

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

defraud;  

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

means of untrue statements of material fact or omissions 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 

c. knowingly, recklessly or negligently engaged in transactions, practices, or 

courses of business which operated or would operate as a fraud or deceit 

upon purchasers of securities. 

106.  By engaging in the conduct described above, Laura violated, and unless 

restrained and enjoined will in the future violate, Sections l 7(a)(l), (2), and (3) of the 

Securities Act [15 U.S.C. §§ 77q(a)(l), (2), and (3)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule l0b-5 

(Laura) 
 

107.  Paragraphs 1 through 103 are realleged and incorporated by reference 

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herein. 

108.  Laura, by engaging in the conduct described above, directly or indirectly, 

in connection with the purchase or sale of securities, by the use of the means or 

instrumentalities of interstate commerce, or of the mails, or of any facility of any national 

securities exchange, knowingly or recklessly: 

a. employed devices, schemes, or artifices to defraud; 
 

b. made untrue statements of a material fact or omitted to state a material fact 

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

circumstances under which they were made, not misleading; and 

c. engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon other persons. 

109.  By engaging in the conduct described above, Laura violated, and unless 

restrained and enjoined will in the future violate, Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), 

(b), and (c)]. 

THIRD CLAIM FOR RELIEF 
Violations of Securities Act Sections 17(a)(1) and (3) 

 (Sichenzio and Gil de Rubio) 
 

110.  Paragraphs 1 through 103 are realleged and incorporated by reference 

herein. 

111.  Sichenzio and Gil de Rubio, by engaging in the conduct described above, 

directly or indirectly, in the offer or sale of securities, by the use of the means or 

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

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the mails: 

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

defraud; and 

b. knowingly, recklessly or negligently engaged in transactions, practices, or 
 

courses of business which operated or would operate as a fraud or deceit 

upon purchasers of securities.  

112.  By engaging in the conduct described above, Sichenzio and Gil de Rubio 

violated, and unless restrained and enjoined will in the future violate, Sections 17(a)(l) 

and (3) of the Securities Act [15 U.S.C. §§ 77q(a)(l) and (3)]. 

FOURTH CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) 

and (c)  
(Sichenzio and Gil de Rubio) 

 
113.  Paragraphs 1 through 103 are realleged and incorporated by reference 

herein. 

114.  Sichenzio and Gil de Rubio, by engaging in the conduct described above, 

directly or indirectly, in connection with the purchase or sale of securities, by the use of 

the means or instrumentalities of interstate commerce, or of the mails, or of any facilities 

of any national securities exchange, knowingly or recklessly: 

a. employed devices, schemes, or artifices to defraud; and 
 

b. engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons. 

115.  By engaging in the conduct described above, Sichenzio and Gil de Rubio 

violated, and unless restrained and enjoined will in the future violate, Section 10(b) of the 

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Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 

240.10b- 5(a) and (c)]. 

FIFTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Securities Act Section 

17(a)(2)  
(Sichenzio and Gil de Rubio) 

 
116.  Paragraphs 1 through 103 are realleged and incorporated by reference 

herein. 

117.  By virtue of the foregoing, Sichenzio and Gil de Rubio, singly or in 

concert, directly or indirectly, knowingly or recklessly provided substantial assistance to 

Laura, who by use of the means or instruments of transportation or communication in 

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

money or property by means of untrue statements of material fact or omissions to state 

material facts necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading. 

118.  By virtue of the foregoing, Sichenzio and Gil de Rubio aided and abetted, 

and, unless restrained and enjoined, will continue aiding and abetting, violations of 

Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2).  

SIXTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Exchange Act Section 

10(b) and Rule l0b-5(b)  
(Sichenzio and Gil de Rubio) 

 
119.  Paragraphs 1 through 103 are realleged and incorporated by reference 

herein. 

120.  By virtue of the foregoing, Sichenzio and Gil de Rubio, singly or in 

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concert, directly or indirectly, provided knowing and substantial assistance to Laura, who, 

directly or indirectly, in connection with the purchase or sale of securities, knowingly or 

recklessly used the means or instrumentalities of interstate commerce, or of the mails, or 

of any facility of any national securities exchange to make untrue statements of a material 

fact or to omit to state material facts necessary in order to make the statements made, in 

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

121.  By virtue of the foregoing, Sichenzio and Gil de Rubio aided and abetted 

and, unless restrained and enjoined, will continue aiding and abetting, violations 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). 

SEVENTH CLAIM FOR RELIEF 
Violations of Exchange Act Section 15(a)(1)  

(Laura) 
 

122.  Paragraphs 1 through 103 are realleged and incorporated by reference 

herein. 

123.  Laura, by engaging in the conduct described above, directly or indirectly, 

made use of the mails or any means or instrumentalities of interstate commerce to effect 

transactions in, or to induce or attempt to induce the purchase or sale of, securities, 

without being registered as a broker or dealer, or being associated with a registered 

broker or dealer in accordance with Section 15(b) of the Exchange Act [15 U.S.C.  

§ 78o(b)]. 

124.  By virtue of the foregoing, Laura violated and, unless enjoined, will 

continue to violate Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]. 

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PRAYER FOR RELIEF 

 
WHEREFORE, the Commission respectfully requests that the Court: 

 
A.  Permanently enjoin Laura from violating, directly or indirectly, Sections 

17(a) of the Securities Act; Sections 10(b) and 15(a)(1) of the Exchange Act; and Exchange 

Act Rule 10b-5; 

B. Permanently enjoin Sichenzio and Gil de Rubio from violating, directly or 

indirectly, Sections 17(a)(l) and (3) of the Securities Act; Section 10(b) of the Exchange 

Act; and Exchange Act Rules 10b-5(a) and (c) and permanently enjoin Sichenzio and Gil de 

Rubio from, directly or indirectly, aiding and abetting violations of Section 17(a)(2) of the 

Securities Act; Section 10(b) of the Exchange Act; and Exchange Act Rule 10b-5(b) by 

other persons; 

C. Order each of the Defendants to disgorge the ill-gotten gains obtained as a 

result of the conduct alleged in this Complaint, with prejudgment interest; 

D.  Order each of the Defendants to pay civil money penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 2l(d)(3) of the Exchange Act 

[15 U.S.C. § 78u(d)(3)]; and 

E. Grant such further relief as the Court may deem just and appropriate. 
  

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    JURY DEMAND 

 Plaintiff demands that this case be tried by a jury.  

Dated: New York, New York 
September 7, 2018 

      SECURITIES AND EXCHANGE COMMISSION 
 
By: /s/ Marc P. Berger 

Marc P. Berger 
Regional Director 
Lara S. Mehraban 
Thomas P. Smith, Jr. 
Kevin P. McGrath 
Margaret D. Spillane 
New York Regional Office 
Brookfield Place, 200 Vesey Street, Suite 400 
New York, New York 10281 
(212) 336-0533 (McGrath) 
Email: [email protected]  
Attorneys for the Plaintiff 

 

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mailto:[email protected]


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