SEC v. Diana P. Lovera, Southern District of Florida (June 28, 2017) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. ______________________

SECURITIES AND EXCHANGE COMMISSION, )
        )
    Plaintiff,              )
        ) JURY TRIAL
v.        )  DEMANDED
        )
DIANA P. LOVERA,      )
        )
    Defendant.   )
        )
  )

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

 Plaintiff Securities and Exchange Commission (“Commission” or “SEC”) alleges:

INTRODUCTION

1. This case involves violations of the antifraud and registration provisions of the

federal securities laws by Defendant Diana P. Lovera (“Lovera”), the former Chief Operating

Officer (“COO”) of Oxford City Football Club, Inc. (“Oxford City”), a defunct public company

that falsely claimed to be “the largest publicly traded diversified portfolio of professional sports

teams in the world” and to own a “diversified portfolio of academic institutions.”  The

Commission previously filed suit in this Court against Oxford City and its former Chief

Executive Officer (“CEO”), Thomas Anthony Guerriero (“Guerriero”), on December 10, 2015.

SEC v. Oxford City Football Club, Inc., et al., No. 15-CV-62594-KMW (S.D. Fla.).

2. From approximately July 2013 to July 2015, under the guise of Oxford City’s

nominal legitimate businesses, Defendant and others at Oxford City operated a classic “boiler

room”1 out of which they sold millions of shares of illegal, unregistered stock offerings through

several fraudulent practices designed to deceive investors concerning the value of the stock they

were purchasing and the future profits they could realize.  As part of these fraudulent practices,

Defendant and others at Oxford City made numerous misstatements to investors regarding,

among other things, Oxford City’s assets, its business plan, its future profitability, and the

composition of its management.

3. Defendant served as Oxford City’s COO from approximately September 2013 to

May 2015.  She had frequent contacts with investors and prospective investors, and made

numerous material misrepresentations to them to assist in Oxford City’s fraudulent solicitations.

For example, Defendant and others would dupe a prospective investor by claiming that they

could “lock in” a discounted price on Oxford City stock, and then convince them that Oxford

City had a “voice verification system,” which they claimed was linked to the investor’s name,

social security number, and date of birth.  Later, if an investor had second thoughts about

investing in Oxford City stock, Defendant and others warned investors that the voice recording

was a legally binding contract that “goes through three levels of compliance” including a

“federal filing with the government.”

4. In reality, Oxford City had no voice verification system.  Defendant duped

investors into believing that there was a voice verification system by merely pressing a button on

a telephone key pad.  Defendant and others would also use high-pressure, strong-armed tactics to

intimidate and coerce individuals to invest in Oxford City.  For example, if an investor did not

1  “‘Boiler room’ activity consists essentially of offering to customers securities of certain
issuers in large volume by means of an intensive selling campaign through numerous salesmen
by telephone or direct mail, without regard to the suitability to the needs of the customer, in such
a manner as to induce a hasty decision to buy the security being offered without disclosure of the
material facts about the issuer.”  SEC v. R.J. Allen & Assocs., Inc., 386 F. Supp. 866, 874 (S.D.
Fla. 1974).

forward funds to Oxford City in a timely fashion, Defendant and others threatened to: (a)

commence legal action against the investor; (b) place a lien on the investor’s bank accounts; (c)

ruin the investor’s credit rating by reporting to credit agencies; and (d) garnish the investor’s

wages.

5. During the relevant time period, Defendant and others at Oxford City fraudulently

raised approximately $6.6 million from more than 150 investors, many of whom were

unaccredited and inexperienced with investing.  Defendant made approximately $80,000 of these

ill-gotten gains.

6. As a result of the conduct alleged in this Complaint, Defendant violated Sections

5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77e(a) & (c),

77q(a); and Section 10(b) the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C.

§ 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.  Unless restrained and enjoined,

Defendant is reasonably likely to continue to violate the federal securities laws.

7. The Commission, therefore, respectfully requests that this Court enter:  (i) a

permanent injunction restraining and enjoining Defendant from violating the federal securities

laws, (ii) an officer and director bar against Defendant, and (iii) a penny stock bar against

Defendant.

DEFENDANT

8. Defendant Diana Lovera, age 33, currently is incarcerated at the Federal

Detention Center in Miami, Florida.  From approximately September 2013 to May 2015, Lovera

was the COO of Oxford City.

OTHER RELEVANT ENTITIES AND INDIVIDUAL

9. Thomas Anthony Guerriero, age 39, is currently incarcerated at the Federal

Correctional Institution in Coleman, Florida.  He was the CEO of Oxford City throughout the

time period of this Complaint.  At various times between 1998 and 2005, Guerriero held series

licenses 7, 24, and 63, as well as a series 66 license in 2009.  All of these licenses have expired.

Guerriero worked for twelve years as a registered representative in New York, during which time

he was terminated from three brokerage firms.  During the relevant time period of this

Complaint, Guerriero routinely portrayed himself as “world renowned for being one of the most

powerful and influential CEO’s in the history of Wall Street.”

10. Oxford City is a Florida public company which had principal offices in Deerfield

Beach, Florida.  Oxford City was incorporated in Florida on February 11, 2003, as Smart Kids

Group, Inc.  After a reverse merger on June 11, 2012, Guerriero became the company’s CEO and

sole controlling officer, and the company changed its name to WMX Holdings Group, Inc.

(“WMX”).  On July 8, 2013, the company renamed itself “Oxford City Football Club, Inc.”

Oxford City’s common stock was quoted on the OTCBB and the OTC Link using the ticker

symbol “OXFC.”

JURISDICTION AND VENUE

11. The Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and

22(a) of the Securities Act, 15 U.S.C. §§ 77t(b), 77t(d) and 77v(a); and Sections 21(d) and 27 of

the Exchange Act, 15 U.S.C. §§ 78u(d) and 78aa.  The Commission seeks an order prohibiting

Defendant from serving as an officer or director of a public company pursuant to Section 20(e)

of the Securities Act, 15 U.S.C. §77t(e), and Section 21(d)(2) of the Exchange Act, 15 U.S.C.

§78u(d)(2), and prohibiting Defendant from engaging in any offering of penny stock pursuant to

Section 20(g) of the Securities Act, 15 U.S.C § 77t(g), and Section 21(d)(6) of the Exchange Act,

15 U.S.C. § 78u(d)(6).

12. The Court has personal jurisdiction over Defendant, and venue is proper in this

District, because, among other things, Defendant offered or sold securities to investors in this

District, and because Defendant resides in this District.

13. In connection with the conduct alleged in this Complaint, Defendant, directly and

indirectly, singly or in concert with others, has contacted investors in several States, made use of the

means or instrumentalities of interstate commerce, and made use of the means or instruments of

transportation or communication in interstate commerce, and of the mails, to carry out the unlawful

conduct described in this Complaint.

PROCEDURAL BACKGROUND

14. On December 10, 2015, the Commission filed an emergency action against

Oxford City and Guerriero, charging them with fraud and other violations of the federal

securities laws.  The Complaint named as a relief defendant GCE Wealth, Inc. (“GCE”), an

entity wholly owned by Guerriero to which Oxford City paid Guerriero purported compensation.

See Compl. Dkt. No. 1, SEC v. Oxford City Football Club, Inc., et al., No. 15-CV-62594-KMW

(S.D. Fla. Dec. 10, 2015) (“Oxford City”).

15. On the Commission’s motion, the Court issued an emergency order, freezing

seven bank accounts held by Oxford City and GCE, and further ordering Oxford City and

Guerriero to provide sworn accountings detailing the nature and location of their funds, assets,

and properties.  Id. Dkt. No. 9.

16. At the same time, the U.S. Attorney’s Office for the Southern District of Florida

announced parallel criminal charges against Guerriero, Defendant, and seven others, for

conspiracy to commit mail and wire fraud, 18 U.S.C. §1349.  Defendant and Guerriero were also

charged with wire fraud under 18 U.S.C. §1343 and mail fraud under 18 U.S.C. §1341.  See Dkt.

No. 1, United States v. Thomas A. Guerriero et. al, No. 15-CR-60317-BB (S.D. Fla. Dec. 10,

2015) (“Guerriero”).

17. On February 29, 2016, Guerriero pled guilty to conspiracy to commit mail and

wire fraud.  Id. Dkt. No. 154.  On November 7, 2016, the Commission filed stipulated Consents

to a settlement and a proposed Final Judgment as to all parties.  Oxford City, Dkt. No. 53-55.  On

January 26, 2017, this Court entered the final judgments against all parties.  Id. Dkt. No. 58-60.

18. On May 2, 2016, Defendant pled guilty to conspiracy to commit mail and wire

fraud.  Guerriero, Dkt. No. 249.  As part of her plea agreement, Defendant admitted to the

following facts:

• Defendant conspired with others to defraud more than 150 individuals and raised

approximately $6.6 million from investors.

• The conspiracy occurred by means of materially false and fraudulent pretenses, as

well as material omissions, to knowingly devise a scheme and artifice to defraud and

to obtain money and property through the delivery of the mails and through wire

communications.

• Defendant and her co-conspirators used “phone rooms” to solicit investors located

throughout the United States to buy shares of Oxford City stock directly from the

company.

• Defendant directed investors to make payments for Oxford City stock transactions by:

(a) transferring funds electronically via interstate wires to bank accounts Guerriero

controlled; or (b) mailing checks to Oxford City’s offices located in Deerfield Beach,

Florida.

• Defendant, Guerriero, and others would claim to “lock-in” the sale of the

“discounted” sales price for an investor using a purported voice verification system

that Guerriero, Defendant, and others claimed was linked to the investor’s name,

social security number, and date of birth.  If an investor had second thoughts about

investing in Oxford City stock, Defendant and her co-conspirators warned investors

that the voice recording was a legally binding contract that “goes through three levels

of compliance” with a “federal filing with the government.”

• Oxford City had no voice verification system.  Defendant and her co-conspirators

duped investors into believing that there was a voice verification system by pushing a

button on a telephone key pad to produce a sound.

• Defendant and her co-conspirators used high-pressure, strong-armed tactics to

intimidate and coerce individuals to invest in Oxford City.  For example, if an

investor did not forward funds to Oxford City in a timely fashion, Defendant and her

co-conspirators, mainly Guerriero, threatened to: (a) commence legal action against

the investor; (b) place a lien on the investor’s bank accounts; (c) ruin the investor’s

credit rating by reporting to credit agencies; and (d) garnish the investor’s wages.

• Defendant and her co-conspirators told investors to invest in Oxford City because it

was a good investment, a “no brainer,” and that the Oxford City investment “can’t

lose money.”

• Defendant and her co-conspirators falsely told investors that no commissions were

charged because the sales agents were paid a salary, when in fact, Guerriero used the

money received from investors for, among other things, undisclosed sales

commissions, fees, and other monetary distributions to himself, Defendant, and

others.

• To induce investors to provide Defendant money, she and her co-conspirators made

numerous materially false and fraudulent oral and written statements to investors,

including, among other things, the following:

o that Oxford City was a 131 year-old, debt-free holding company;

o that Oxford City had a book value of $38 per share and should be trading at 5-6
times book value;

o that the value of Oxford City stock would dramatically increase within the first

year;

o that Oxford City would pay a 50% dividend within the first year;

o that Oxford City stock would be listed on the New York Stock Exchange in 2015;

o that Oxford City owned or operated a broadcast network that included a radio
station;

o that Oxford City owned $90 million worth of real estate;

o that Oxford City owned an online university that had 10,000 students enrolled and

would soon generate over $90-$100 million of revenue; and

o that Guerriero had a personal net worth in excess of $100 million.

19. On November 28, 2016, this Court sentenced Defendant to a 20-month prison

term and ordered her to pay criminal restitution of $6,314,010.91.  Guerriero, Dkt. No. 421.  She

subsequently appealed that judgment, id. Dkt. No. 433; her appeal remains pending.

DEFENDANT’S UNLAWFUL CONDUCT

I. The Foundations of the Unlawful Conduct

20. In 2012, Guerriero operated a publicly traded company called WMX Group

Holdings, Inc. (“WMX”), which offered an Executive Training Certificate in Financial Planning.

21. In March 2013, WMX executed a 1-for-4000 reverse stock split and in July 2013

changed its name to Oxford City Football Club, Inc.  Around that same time, Oxford City

acquired a 49-percent ownership interest in a British entity, Oxford City Football Club (Trading)

Ltd. (“Oxford Trading”), which operated a mid-tier, semi-professional soccer club in Oxford,

England.  Guerriero acquired another one percent of Oxford Trading, and a British charitable

organization owned the remaining 50 percent.

22. Oxford City claimed to have “two core portfolio divisions.”  First, a purported

“Professional Sports Portfolio” consisted of two soccer teams:  the Oxford City Football Club

and the Oxford City Nomads, which are actual semi-professional soccer teams that compete in

the lower divisions of the English Football Association.  Oxford City owned other semi-

professional and amateur indoor and outdoor soccer teams, as well as a basketball team.

According to Oxford City’s public filings, however, none of the teams ever generated profits for

Oxford City.

23. Second, Oxford City purportedly had an “Academic Institution Portfolio

Division” that consisted of two schools:  Oxford City University in the United States, which

purported to offer Bachelors, Masters, and Doctoral degree programs in economics and financial

markets, and the Oxford City Sports College in the Oxford, England.

24. Throughout the relevant period, Oxford City gave the United States school several

names, including Oxford City University, CIT University, City Institute of Technology and

Christian Institute of Technology.  It purported to be primarily an online university that also had

plans to establish a physical location.  Oxford City’s public filings with the SEC never reported

revenue attributable to any schools.

25. In addition, at various times the company also purported to have a “Media and

Entertainment Portfolio” that included a South Florida radio station, and a “Real Estate and

Property Management Portfolio.”

26. Over the relevant period, Oxford City often sold itself as “the largest publicly-

traded diversified portfolio of professional sports teams in the world” that also owns, among

other things, a “diversified portfolio of academic institutions.”  Oxford City, however, generated

only nominal revenue and made no profit from its operations.  By the end of its first full fiscal

year, for example, which ended June 30, 2014, Oxford City reported $622,522 in revenue, and a

net loss of more than $7 million.

27. These operations served as the foundation of a pervasive two-year fraud by

Guerriero, Defendant, and others, by providing some level of legitimacy to Oxford City such that

Defendant and others were able to induce millions-of-dollars of investment through unregistered,

fraudulent means.

II. Defendant’s Role at Oxford City

28. Defendant began working for WMX in October of 2012 as a purported “wealth

manager.”  WMX changed its name to Oxford City around July 2013, and Defendant became the

COO of the company in September 2013.

29. As COO, Defendant worked closely with Guerriero, the CEO of the company,

and shared an office with Guerriero in Oxford City’s Deerfield Beach headquarters.  Defendant

answered Guerriero’s phone, participated in telephone conversations Guerriero had with current

and prospective investors, traveled with Guerriero, and attended meetings where he obtained

money from current and prospective investors.

30. Defendant also was the primary conduit for all written communications with

prospective and existing investors.  Defendant sent to investors and prospective investors, by

mail and electronically, written communications concerning the purchase of Oxford City stock,

marketing materials, including the company’s Business Plans that contained numerous material

misrepresentations and omissions, and other communications to investors in furtherance of the

fraud.

31. For a period of time, Defendant also worked as a salesperson in the Oxford City

boiler room offering and selling Oxford City stock.  She used leads lists and sales scripts

provided by Guerriero to solicit investors to purchase Oxford City stock in what purported to be

private placement offerings, but were actually unregistered public offerings.

III. Oxford City’s Unregistered Offerings

32. Throughout the relevant period, Guerriero controlled and managed Oxford City’s

boiler room operations.  Among other things, Guerriero trained the sales force, created written

scripts for them to follow on calls, and monitored sales calls to develop methods to enhance the

boiler room’s effectiveness.  Guerriero was also directly involved in Oxford City’s unregistered

offerings by soliciting investors, often when boiler room salespeople would forward calls to

Guerriero for Guerriero to act as the sales “closer.”

33. Defendant served as part of Guerriero’s boiler room sales team.  Pursuant to

Guerriero’s instruction, the boiler room salespeople, including Defendant, would seek to induce

investments using deceptive sales tactics, schemes to defraud investors, and fraudulent

representations of the value and future profit potential of Oxford City, as otherwise described in

this Complaint.

34. The boiler room salespeople, including Defendant, contacted potential investors

using numerous lead lists purchased from third parties.  As part of their sales pitch, they made no

effort to inquire into the financial background or investing experience of potential investors.

Furthermore, many of the boiler room salespeople masked their identities by using aliases.

35. Throughout the relevant period, there was no registration statement filed with the

SEC or in effect for Defendant’s sales of Oxford City shares.  In its publicly filed annual reports,

which Defendant helped to prepare, Oxford City claimed an exemption from registration

pursuant to Rule 506 of SEC Regulation D, 17 C.F.R. §230.506 and claimed it “did not engage

in any general solicitation or advertising.”

36. Oxford City did not satisfy this exemption, however, because Defendant and

others engaged in a general sales solicitation that involved making cold-calls to thousands of

prospective investors throughout the United States using numerous lead lists purchased from

third parties.

37. Defendant and others did not vet potential investors for “accredited” status.  They

did not ask questions concerning the investors’ sophistication or financial holdings, nor did they

ask for documentation confirming such status.  Instead, Defendant and others solicited many

unsophisticated investors that did not possess the experience, income, or assets necessary to

qualify as accredited investors.

38. During the time period of these share issuances, Oxford City stock qualified as a

“penny stock” because it was an equity security that traded for less than $5 per share during the

relevant period, and did not qualify for any of the listed exemptions in Exchange Act Rule

3a51-1.

39. Through use of the boiler room and otherwise, from at least July 2013 through

July 2015, Oxford City, Guerriero, Defendant, and others sold millions of shares of Oxford City

stock through direct offerings to more than 150 investors in more than 30 states using the phone,

email, and the mail, generating proceeds of approximately $6.6 million.

IV. Defendant’s Fraudulent Offerings of Oxford City Stock

40. Defendant also violated the federal securities laws by selling Oxford City stock

via numerous material misrepresentations of fact and schemes to defraud investors.

 A.        Defendant’s Deceptive Sales Tactics

41. Defendant and others engaged in a scheme to defraud by coercing individuals to

purchase Oxford City stock by tricking them into thinking that they had already agreed to

purchase the shares when they had not.

42. Throughout the relevant period, Defendant and others engaged in a scheme to

defraud by obtaining investors’ personal information over the telephone, such as a date of birth

and Social Security number, while pressing buttons on their telephone to falsely give the

appearance of the use of a recording device.  After the “recording,” Defendant and others would

send investors written confirmation of a claimed “purchase” of Oxford City shares that set a due

date for payment.  Defendant and others further falsely claimed that the purchase was recorded

on a “Verbal Verification System” or an “International Banking Verification System” that linked

their personal information with the purchase via a filing with the SEC.

43. If a potential investor disputed the transaction, Defendant and others falsely

claimed that the Verbal Verification System was legally binding, that the transaction had already

been completed and filed with the SEC, and that if they failed to purchase the stock, they faced

collections actions, law suits, liens, late fees, and impairment of their credit rating.

44. This conduct constituted a deceptive business practice intended to induce

investment in Oxford City.  Defendant knowingly misrepresented that investors had agreed to

purchase Oxford City stock, and that the so-called Verbal Verification System locked them into a

purchase.  Thus, Defendant and others knowingly lied to investors both about the existence of a

Verbal Verification System, its alleged link to the SEC, and whether investors had agreed to

purchase Oxford City stock.

45. The misrepresentations by Defendant and others were material to investors and

convinced numerous individuals to invest in Oxford City who otherwise would have declined.

This conduct also constituted a scheme to defraud investors, through a pattern and practice of

using false claims regarding the existence of a Verbal Verification System and other deceptive

strong-arm sales tactics to coerce investments in Oxford City.

B.        Defendant’s Material Misrepresentations and Omissions Concerning Oxford
City’s Value and Future Profitability

46. To further entice unsuspecting investors to purchase the unregistered securities,

Defendant and others at Oxford City made numerous material misstatements and omissions to

investors regarding Oxford City’s current and future value.

47. For instance, Defendant and others told potential investors that Oxford City had

large real estate holdings worth about $100 million, and that it owned an online university with

students currently enrolled.

48. These statements were false and Defendant knew it.  Oxford City never had real

estate holdings worth anywhere near $100 million, nor did it ever have a paying student in its

online university.

49. Defendant, as COO of Oxford City, knew its business operations, and knew the

company’s public filings did not reflect the inflated revenues or assets that Defendant and others

described to investors.

50. Defendant and others also made misleading and unfounded statements that

Oxford City: (1) was going to pay dividends of $0.50 per share within a year or less, and (2)

would soon be listed on the New York Stock Exchange (“NYSE”).

51. These statements were false and misleading, and Defendant knew it.  Even

according to its own 10-K, Oxford City never has been able financially to pay a dividend, let

alone a $0.50 per share dividend in the first year that investors owned the stock.  In fact, the

Company lost $9.1 million and $3.7 million for the fiscal years ending 2014 and 2013,

respectively.  With such losses, state law prohibited Oxford City from issuing a dividend, as

Oxford City acknowledged in public filings made after the misrepresentations were made to

investors.  Oxford City also disclosed in its filings that it had “not declared any dividends and we

do not plan to declare any dividends in the foreseeable future.”

52. Likewise, Oxford City has never been close to meeting the qualifications to list on

the NYSE.  For example, to list on the NYSE, Oxford City’s publicly held shares would have to

have an aggregate market value of $40,000,000.  Although Oxford City’s market cap

occasionally exceeded that amount due to its artificially high stock price, the NYSE rules require

companies to subtract from their market cap any shares held by company insiders, which would

have put Oxford City well below the $40,000,000 threshold.  The NYSE rules also set minimum

requirements on earnings from continuing operations that Oxford City had no plausible way of

meeting.

53. These misrepresentations were material because they falsely gave the impression

that Oxford City stock had future value for investors, which would influence them to invest in

Oxford City.

C.   Defendant’s Dissemination of Fraudulent “Business Plans”

54. Defendant and others further misled investors and prospective investors during

the relevant period through several false and misleading “Business Plans” that Defendant and

others provided to investors and potential investors.

55. As part of the scheme, Guerriero created and/or directed Oxford City employees

to create the statements made in Oxford City’s Business Plans.  Defendant, who was primarily

responsible for corresponding with investors and potential investors, sent the Business Plans to

investors and potential investors.

56. The Business Plans that Defendant sent to investors were rife with material

misrepresentations.  For example, in one Business Plan that Defendant sent to investors in late

2013, the plan claimed that Oxford City owned a broadcasting network called the Oxford City

Broadcast Network (“OCBN”).  The OCBN was touted in Oxford City’s Business Plan as a

“state-of-the-art production facility … capable of handling most commercial delivery systems,”

that boasts a radio signal on AM 740 that is “one of the strongest in the state of Florida.”  The

Business Plan projected profits for OCBN of $3.9 million in its first year, and almost $20 million

over five years.

57. These statements were false and Defendant knew it.  At the time, Oxford City had

only a six-month contract with a real broadcasting network to permit Oxford City to broadcast

for 1 hour per week.  It had no revenue streams.  Rather, Oxford City used the hour as a platform

for Guerriero to tout himself as an up-and-coming entrepreneur and Oxford City as an attractive

investment opportunity.  There was no reasonable basis for Oxford City to project multi-million

dollar profits within one year, and Defendant did not genuinely believe that Oxford City would

obtain such profits.

58. Defendant and others also misled investors about the success and profitability of

Oxford City University, the purported online college in the U.S. and the cornerstone of Oxford

City’s “Academic Portfolio.”  The Oxford City Business Plan that Defendant sent to investors

and potential investors projected profits from its universities of $495 million over a five-year

span.

59. Oxford City had no track record of profits from any academic programs during its

existence.  In fact, over the relevant period, Oxford City’s public filings never even reported

revenue from an academic institution.  Yet the projected profits in the Business Plans would have

made Oxford City University one of the largest, if not the largest, for-profit university in the

United States.

60. The Business Plans that Defendant sent to investors contained several other

fraudulent profit projections.  The projected profits included earning approximately an additional

$240 million in five years from the following sources:

• $7.4 million from “Our Existing Indoor Arena”

• $7.6 million from “Our Existing Oxford City FC Stadium”

• $21.9 million from “10 New Indoor Oxford City FC Academy & Sports Rental

Facilities”

• $71.3 million from the “New Oxford City FC Stadium”

• $38.1 million from the “New Oxford City FC Facility”

• $30 million from the “New Oxford City Clubhouse & Convention Center”

• $31.1 million from the “New Oxford City Futsal Arena”

• $31.1 million from the “New Oxford City Basketball Arena”

61. These Business Plans also claimed that Oxford City would generate $19 million

of profit from the “CIT University Think Tank,” which was purportedly an incubator for

entrepreneurial ideas coming from the University’s student body.  No such entity existed.

62. All told, Oxford City’s Business Plan projected about $777 million in profit in

five years.

63. Defendant, as the Company’s COO, knew that the profit projections in the

Business Plans were false and misleading.

64. At the time, Oxford City had only nominal revenue from its 49 percent interest in

an English soccer club. According to the company’s 10-Ks that Defendant helped prepare,

Oxford City’s total operations sustained comprehensive losses of approximately $7.4 million,

$9.1 million, and $3.7 million for the fiscal years ending 2015, 2014, and 2013, respectively, and

had an accumulated deficit of $21.5 million as of June 30, 2015.

65. Although the English soccer club, which owned a small facility and a number of

semi-pro indoor and outdoor soccer teams, reported some revenue, it never turned a profit from

the time Oxford City became a minority owner.  In total, from 2013-2015, Oxford City’s football

division had generated average annual gross revenues of only $431,032, with no profits.

Accordingly, none of these profits projections were reasonable or genuine.

66. All of these profit projections were material to investors because they directly

reflected Oxford City’s future value, which influenced investors to purchase Oxford City stock.

67. In addition, a Business Plan that Defendant sent to investors in late 2013 extolled

the value of Oxford City’s stock, stating it was “undervalued,” has a “book value of $38 per

share,” and “should be trading at 5-6 times book value” or “over $224 per share.”  The

company’s Business Plan also boasted that “institutional firms had collectively accumulated over

88% of the company, making it very stable and secure.”  Finally, the document described Oxford

City as a “131-year-old debt-free, diversified holding company that has been featured in the Wall

Street Journal, New York Times, CNBC, and countless periodicals.”

68. All of these statements were false, and Defendant, as the company’s COO, knew

it.  Oxford City had not generated a single dollar in profits since it was created.  The small

amount of revenue Oxford City generated from its 49 percent ownership of the U.K. football

club (from ticket sales, concessions, facilities rentals, and other activities) was eclipsed by

Oxford City’s expenses and Guerriero’s compensation.  Furthermore, although the UK soccer

club was 131 years old, Oxford City was formed in 2013 and, in fact, had significant debt.

COUNT I

Violations of Sections 5(a) and 5(c) of the Securities Act

69. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

70. By engaging in unregistered sales of Oxford City stock, Defendant, directly or

indirectly, made use of means or instruments of transportation or communication in interstate

commerce or of the mails, to offer to sell or to sell securities, or to carry or cause such securities

to be carried through the mails or in interstate commerce for the purpose of sale or for delivery

after sale.

71. No registration statement was ever filed with the Commission, nor was one ever

in effect with respect to any of the sales alleged above.

72. No exemption applied to Defendant’s unregistered offerings.

73. By reason of the foregoing,  Defendant violated, and unless restrained and

enjoined will to continue to violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C.

§§ 77e(a) and (c).

COUNT II

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

74. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

75. From at least September 2013 to May 2015, Defendant directly and indirectly, by

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

by use of the mails, in the offer or sale of securities, as described in this Complaint, knowingly,

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

76. Among other things, Defendant knowingly made material misrepresentations and

schemed to defraud investors, and employed deceptive strong-arm sales tactics to defraud

investors.

77. By reason of the foregoing, Defendant directly and indirectly violated, and unless

enjoined, is reasonably likely to continue to violate, Section 17(a)(1) of the Securities Act, 15

U.S.C. § 77q(a)(1).

COUNT III

Fraud in Violation of Section 17(a)(2) of the Securities Act

78. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

79. From at least September 2013 to May 2015, Defendant directly and indirectly, by

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

by the use of the mails, in the offer or sale of securities, as described in this Complaint, obtained

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

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

which they were made, not misleading.

80. By reason of the foregoing, Defendant directly and indirectly violated, and unless

enjoined, is reasonably likely to continue to violate, Section 17(a)(2) of the Securities Act, 15

U.S.C. § 77q(a)(2).

COUNT IV

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

81. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

82. From at least September 2013 to May 2015, Defendant directly and indirectly, by

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

by the use of the mails, in the offer or sale of securities, as described in this Complaint, engaged

in transactions, practices and courses of business which have operated, are now operating or will

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

83. Among other things, Defendant knowingly made numerous material

misrepresentations and schemed to defraud investors, and employed deceptive strong-arm sales

tactics to defraud investors.

84. By reason of the foregoing, Defendant directly and indirectly violated, and unless

enjoined, is reasonably likely to continue to violate, Section 17(a)(3) of the Securities Act, 15

U.S.C. § 77q(a)(3).

COUNT V

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

85. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

86. From at least September 2013 to May 2015, Defendant directly and indirectly, by

use of the means and instrumentalities of interstate commerce, and of the mails, in connection

with the purchase or sale of securities, as described in this Complaint, knowingly, willfully or

recklessly employed devices, schemes, or artifices to defraud.

87. Among other things, Defendant knowingly made numerous material

misrepresentations and schemed to defraud investors, and employed deceptive strong-arm sales

tactics to defraud investors.

88. By reason of the foregoing, Defendant directly and indirectly violated, and unless

enjoined, is reasonably likely to continue to violate, Section 10(b) and Rule 10b-5(a) of the

Exchange Act, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5(a).

COUNT VI

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

89. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

90. From at least September 2013 to May 2015, Defendant directly and indirectly, by

use of the means and instrumentalities of interstate commerce, and of the mails, in connection

with the purchase or sale of securities, as described in this Complaint, knowingly, willfully or

recklessly made untrue statements of material facts and omitted 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.

91. By reason of the foregoing, Defendant directly and indirectly violated, and unless

enjoined, is reasonably likely to continue to violate, Section 10(b) and Rule 10b-5(b) of the

Exchange Act, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5(b).

COUNT VII

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

92. The Commission realleges and incorporates by reference paragraphs 1 through 68

above.

93. From at least September 2013 to May 2015, Defendant directly and indirectly, by

use of the means and instrumentalities of interstate commerce, and of the mails, in connection

with the purchase or sale of securities, as described in this Complaint, knowingly, willfully or

recklessly engaged in acts, practices and courses of business which have operated, are now

operating or will operate as a fraud or deceit upon the purchasers and prospective purchasers of

such securities.

94. Among other things, Defendant knowingly made numerous material

misrepresentations and schemed to defraud investors, and employed deceptive strong-arm sales

tactics to defraud investors.

95. By reason of the foregoing, Defendant directly and indirectly violated, and unless

enjoined, is reasonably likely to continue to violate, Section 10(b) and Rule 10b-5(c) of the

Exchange Act, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5(c).

RELIEF REQUESTED

 WHEREFORE, the Commission respectfully requests that the Court:

I.

Disgorgement

 Issue an Order directing Defendant to disgorge all ill-gotten gains, including prejudgment

interest, resulting from the acts or courses of conduct alleged in this Complaint.

II.

Penalties

Issue an Order directing Defendant to pay civil money penalties pursuant to Section 20(d)

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

§ 78u(d).

III.

Permanent Injunction

Issue a Permanent Injunction, restraining and enjoining Defendant, including her agents,

servants, employees, attorneys, and all persons in active concert or participation with her, and

each of them, from violating the federal securities laws alleged in this Complaint.

IV.

Penny Stock Bar

 Bar Defendant from any future participation in the offering of any penny stock, as

defined by Section 3(a)(51)(A) of the Exchange Act, 15 U.S.C. § 78c(a)(51)(A) and Rule 3a51-1

thereunder, 17 C.F.R. § 240.3a51-1, including engaging in activities with a broker, dealer, or

issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of

any penny stock, pursuant to Section 20(g) of the Securities Act, 15 U.S.C. § 77t(g), and Section

21(d)(6) of the Exchange Act, 15 U.S.C. § 78u(d)(6), and the Court’s equitable powers.

V.

Officer and Director Bar

Bar Defendant, pursuant to Section 20(e) of the Securities Act, 15 U.S.C. §77t(e), and

Section 21(d)(2) of the Exchange Act, 15 U.S.C. §78u(d)(2) from serving as an officer or

director of any entity having a class of securities registered with the Commission pursuant to

Section 12 of the Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to

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

VI.

Enjoining Securities Solicitations

 Issue an Order prohibiting Defendant from directly or indirectly, including, but not

limited to, through any entity owned or controlled by Defendant, participating in the issuance,

purchase, offer, or sale of any security, provided however, that such order shall not prevent

Defendant from purchasing or selling securities listed on a national securities exchange for her

own personal accounts.

VII.

Further Relief

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

VIII.

Retention of Jurisdiction

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

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

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

relief within the jurisdiction of this Court.

Dated:  June 28, 2017    Respectfully submitted,

     By: s/ Matthew F. Scarlato

Matthew F. Scarlato (Special Bar No. A5502152)
 Attorney E-mail address:  [email protected]

SECURITIES AND EXCHANGE
COMMISSION

      100 F Street, NE
      Washington, DC  20549
      Tel:  (202) 551-3749
       Fax:  (202) 772-9245

Of Counsel:

Scott W. Friestad
Brian O. Quinn
Darren E. Long
Brian D. Vann
SECURITIES AND EXCHANGE
COMMISSION
100 F Street, NE
Washington, DC  20549

 Attorneys for Plaintiff Securities and Exchange Commission

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on June 28, 2017, the foregoing document was filed

electronically with the Clerk of Court using CM/ECF.  I also certify that the foregoing document

is being served this day on Defendant’s counsel identified on the Service List below via

overnight mail.

s/ Matthew F. Scarlato

       Matthew F. Scarlato

SERVICE LIST

David Seltzer
Seltzer Mayberg, LLC
1200 Brickell Avenue, Suite 680
Miami, Florida 33131

Counsel for Defendant Diana P. Lovera

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 

 
CASE NO. ______________________ 

 
SECURITIES AND EXCHANGE COMMISSION, ) 
        )  
    Plaintiff,              )  
        ) JURY TRIAL  
v.        )  DEMANDED 
        )  
DIANA P. LOVERA,      )  
        ) 
    Defendant.   )   
        ) 
  ) 
 

 
COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF 

 
 Plaintiff Securities and Exchange Commission (“Commission” or “SEC”) alleges: 
 

 
INTRODUCTION 

 
1. This case involves violations of the antifraud and registration provisions of the 

federal securities laws by Defendant Diana P. Lovera (“Lovera”), the former Chief Operating 

Officer (“COO”) of Oxford City Football Club, Inc. (“Oxford City”), a defunct public company 

that falsely claimed to be “the largest publicly traded diversified portfolio of professional sports 

teams in the world” and to own a “diversified portfolio of academic institutions.”  The 

Commission previously filed suit in this Court against Oxford City and its former Chief 

Executive Officer (“CEO”), Thomas Anthony Guerriero (“Guerriero”), on December 10, 2015.  

SEC v. Oxford City Football Club, Inc., et al., No. 15-CV-62594-KMW (S.D. Fla.).     

2. From approximately July 2013 to July 2015, under the guise of Oxford City’s 

nominal legitimate businesses, Defendant and others at Oxford City operated a classic “boiler 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 1 of 27



 - 2 - 
 

room”1 out of which they sold millions of shares of illegal, unregistered stock offerings through 

several fraudulent practices designed to deceive investors concerning the value of the stock they 

were purchasing and the future profits they could realize.  As part of these fraudulent practices, 

Defendant and others at Oxford City made numerous misstatements to investors regarding, 

among other things, Oxford City’s assets, its business plan, its future profitability, and the 

composition of its management.   

3. Defendant served as Oxford City’s COO from approximately September 2013 to 

May 2015.  She had frequent contacts with investors and prospective investors, and made 

numerous material misrepresentations to them to assist in Oxford City’s fraudulent solicitations.  

For example, Defendant and others would dupe a prospective investor by claiming that they 

could “lock in” a discounted price on Oxford City stock, and then convince them that Oxford 

City had a “voice verification system,” which they claimed was linked to the investor’s name, 

social security number, and date of birth.  Later, if an investor had second thoughts about 

investing in Oxford City stock, Defendant and others warned investors that the voice recording 

was a legally binding contract that “goes through three levels of compliance” including a 

“federal filing with the government.” 

4. In reality, Oxford City had no voice verification system.  Defendant duped 

investors into believing that there was a voice verification system by merely pressing a button on 

a telephone key pad.  Defendant and others would also use high-pressure, strong-armed tactics to 

intimidate and coerce individuals to invest in Oxford City.  For example, if an investor did not 

                                                 
1  “‘Boiler room’ activity consists essentially of offering to customers securities of certain 
issuers in large volume by means of an intensive selling campaign through numerous salesmen 
by telephone or direct mail, without regard to the suitability to the needs of the customer, in such 
a manner as to induce a hasty decision to buy the security being offered without disclosure of the 
material facts about the issuer.”  SEC v. R.J. Allen & Assocs., Inc., 386 F. Supp. 866, 874 (S.D. 
Fla. 1974). 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 2 of 27



 - 3 - 
 

forward funds to Oxford City in a timely fashion, Defendant and others threatened to: (a) 

commence legal action against the investor; (b) place a lien on the investor’s bank accounts; (c) 

ruin the investor’s credit rating by reporting to credit agencies; and (d) garnish the investor’s 

wages.   

5. During the relevant time period, Defendant and others at Oxford City fraudulently 

raised approximately $6.6 million from more than 150 investors, many of whom were 

unaccredited and inexperienced with investing.  Defendant made approximately $80,000 of these 

ill-gotten gains. 

6. As a result of the conduct alleged in this Complaint, Defendant violated Sections 

5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77e(a) & (c), 

77q(a); and Section 10(b) the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. 

§ 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.  Unless restrained and enjoined, 

Defendant is reasonably likely to continue to violate the federal securities laws. 

7. The Commission, therefore, respectfully requests that this Court enter:  (i) a 

permanent injunction restraining and enjoining Defendant from violating the federal securities 

laws, (ii) an officer and director bar against Defendant, and (iii) a penny stock bar against 

Defendant. 

DEFENDANT 

8. Defendant Diana Lovera, age 33, currently is incarcerated at the Federal 

Detention Center in Miami, Florida.  From approximately September 2013 to May 2015, Lovera 

was the COO of Oxford City. 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 3 of 27



 - 4 - 
 

OTHER RELEVANT ENTITIES AND INDIVIDUAL 

9. Thomas Anthony Guerriero, age 39, is currently incarcerated at the Federal 

Correctional Institution in Coleman, Florida.  He was the CEO of Oxford City throughout the 

time period of this Complaint.  At various times between 1998 and 2005, Guerriero held series 

licenses 7, 24, and 63, as well as a series 66 license in 2009.  All of these licenses have expired.  

Guerriero worked for twelve years as a registered representative in New York, during which time 

he was terminated from three brokerage firms.  During the relevant time period of this 

Complaint, Guerriero routinely portrayed himself as “world renowned for being one of the most 

powerful and influential CEO’s in the history of Wall Street.” 

10. Oxford City is a Florida public company which had principal offices in Deerfield 

Beach, Florida.  Oxford City was incorporated in Florida on February 11, 2003, as Smart Kids 

Group, Inc.  After a reverse merger on June 11, 2012, Guerriero became the company’s CEO and 

sole controlling officer, and the company changed its name to WMX Holdings Group, Inc. 

(“WMX”).  On July 8, 2013, the company renamed itself “Oxford City Football Club, Inc.”  

Oxford City’s common stock was quoted on the OTCBB and the OTC Link using the ticker 

symbol “OXFC.”   

JURISDICTION AND VENUE 

11. The Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and 

22(a) of the Securities Act, 15 U.S.C. §§ 77t(b), 77t(d) and 77v(a); and Sections 21(d) and 27 of 

the Exchange Act, 15 U.S.C. §§ 78u(d) and 78aa.  The Commission seeks an order prohibiting 

Defendant from serving as an officer or director of a public company pursuant to Section 20(e) 

of the Securities Act, 15 U.S.C. §77t(e), and Section 21(d)(2) of the Exchange Act, 15 U.S.C. 

§78u(d)(2), and prohibiting Defendant from engaging in any offering of penny stock pursuant to 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 4 of 27



 - 5 - 
 

Section 20(g) of the Securities Act, 15 U.S.C § 77t(g), and Section 21(d)(6) of the Exchange Act, 

15 U.S.C. § 78u(d)(6). 

12. The Court has personal jurisdiction over Defendant, and venue is proper in this 

District, because, among other things, Defendant offered or sold securities to investors in this 

District, and because Defendant resides in this District. 

13. In connection with the conduct alleged in this Complaint, Defendant, directly and 

indirectly, singly or in concert with others, has contacted investors in several States, made use of the 

means or instrumentalities of interstate commerce, and made use of the means or instruments of 

transportation or communication in interstate commerce, and of the mails, to carry out the unlawful 

conduct described in this Complaint. 

PROCEDURAL BACKGROUND 

14. On December 10, 2015, the Commission filed an emergency action against 

Oxford City and Guerriero, charging them with fraud and other violations of the federal 

securities laws.  The Complaint named as a relief defendant GCE Wealth, Inc. (“GCE”), an 

entity wholly owned by Guerriero to which Oxford City paid Guerriero purported compensation.  

See Compl. Dkt. No. 1, SEC v. Oxford City Football Club, Inc., et al., No. 15-CV-62594-KMW 

(S.D. Fla. Dec. 10, 2015) (“Oxford City”).     

15. On the Commission’s motion, the Court issued an emergency order, freezing 

seven bank accounts held by Oxford City and GCE, and further ordering Oxford City and 

Guerriero to provide sworn accountings detailing the nature and location of their funds, assets, 

and properties.  Id. Dkt. No. 9.  

16. At the same time, the U.S. Attorney’s Office for the Southern District of Florida 

announced parallel criminal charges against Guerriero, Defendant, and seven others, for 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 5 of 27



 - 6 - 
 

conspiracy to commit mail and wire fraud, 18 U.S.C. §1349.  Defendant and Guerriero were also 

charged with wire fraud under 18 U.S.C. §1343 and mail fraud under 18 U.S.C. §1341.  See Dkt. 

No. 1, United States v. Thomas A. Guerriero et. al, No. 15-CR-60317-BB (S.D. Fla. Dec. 10, 

2015) (“Guerriero”).  

17. On February 29, 2016, Guerriero pled guilty to conspiracy to commit mail and 

wire fraud.  Id. Dkt. No. 154.  On November 7, 2016, the Commission filed stipulated Consents 

to a settlement and a proposed Final Judgment as to all parties.  Oxford City, Dkt. No. 53-55.  On 

January 26, 2017, this Court entered the final judgments against all parties.  Id. Dkt. No. 58-60.   

18. On May 2, 2016, Defendant pled guilty to conspiracy to commit mail and wire 

fraud.  Guerriero, Dkt. No. 249.  As part of her plea agreement, Defendant admitted to the 

following facts: 

• Defendant conspired with others to defraud more than 150 individuals and raised 

approximately $6.6 million from investors. 

• The conspiracy occurred by means of materially false and fraudulent pretenses, as 

well as material omissions, to knowingly devise a scheme and artifice to defraud and 

to obtain money and property through the delivery of the mails and through wire 

communications. 

• Defendant and her co-conspirators used “phone rooms” to solicit investors located 

throughout the United States to buy shares of Oxford City stock directly from the 

company. 

• Defendant directed investors to make payments for Oxford City stock transactions by: 

(a) transferring funds electronically via interstate wires to bank accounts Guerriero 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 6 of 27



 - 7 - 
 

controlled; or (b) mailing checks to Oxford City’s offices located in Deerfield Beach, 

Florida. 

• Defendant, Guerriero, and others would claim to “lock-in” the sale of the 

“discounted” sales price for an investor using a purported voice verification system 

that Guerriero, Defendant, and others claimed was linked to the investor’s name, 

social security number, and date of birth.  If an investor had second thoughts about 

investing in Oxford City stock, Defendant and her co-conspirators warned investors 

that the voice recording was a legally binding contract that “goes through three levels 

of compliance” with a “federal filing with the government.”  

• Oxford City had no voice verification system.  Defendant and her co-conspirators 

duped investors into believing that there was a voice verification system by pushing a 

button on a telephone key pad to produce a sound.  

• Defendant and her co-conspirators used high-pressure, strong-armed tactics to 

intimidate and coerce individuals to invest in Oxford City.  For example, if an 

investor did not forward funds to Oxford City in a timely fashion, Defendant and her 

co-conspirators, mainly Guerriero, threatened to: (a) commence legal action against 

the investor; (b) place a lien on the investor’s bank accounts; (c) ruin the investor’s 

credit rating by reporting to credit agencies; and (d) garnish the investor’s wages. 

• Defendant and her co-conspirators told investors to invest in Oxford City because it 

was a good investment, a “no brainer,” and that the Oxford City investment “can’t 

lose money.”  

• Defendant and her co-conspirators falsely told investors that no commissions were 

charged because the sales agents were paid a salary, when in fact, Guerriero used the 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 7 of 27



 - 8 - 
 

money received from investors for, among other things, undisclosed sales 

commissions, fees, and other monetary distributions to himself, Defendant, and 

others. 

• To induce investors to provide Defendant money, she and her co-conspirators made 

numerous materially false and fraudulent oral and written statements to investors, 

including, among other things, the following:  

o that Oxford City was a 131 year-old, debt-free holding company; 
 

o that Oxford City had a book value of $38 per share and should be trading at 5-6 
times book value; 

 
o that the value of Oxford City stock would dramatically increase within the first 

year; 
 

o that Oxford City would pay a 50% dividend within the first year;  
 

o that Oxford City stock would be listed on the New York Stock Exchange in 2015; 
 

o that Oxford City owned or operated a broadcast network that included a radio 
station; 

 
o that Oxford City owned $90 million worth of real estate;  

 
o that Oxford City owned an online university that had 10,000 students enrolled and 

would soon generate over $90-$100 million of revenue; and 
 

o that Guerriero had a personal net worth in excess of $100 million.   
 
19. On November 28, 2016, this Court sentenced Defendant to a 20-month prison 

term and ordered her to pay criminal restitution of $6,314,010.91.  Guerriero, Dkt. No. 421.  She 

subsequently appealed that judgment, id. Dkt. No. 433; her appeal remains pending.   

  

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 8 of 27



 - 9 - 
 

DEFENDANT’S UNLAWFUL CONDUCT 
 

I. The Foundations of the Unlawful Conduct 

20. In 2012, Guerriero operated a publicly traded company called WMX Group 

Holdings, Inc. (“WMX”), which offered an Executive Training Certificate in Financial Planning.   

21. In March 2013, WMX executed a 1-for-4000 reverse stock split and in July 2013 

changed its name to Oxford City Football Club, Inc.  Around that same time, Oxford City 

acquired a 49-percent ownership interest in a British entity, Oxford City Football Club (Trading) 

Ltd. (“Oxford Trading”), which operated a mid-tier, semi-professional soccer club in Oxford, 

England.  Guerriero acquired another one percent of Oxford Trading, and a British charitable 

organization owned the remaining 50 percent. 

22. Oxford City claimed to have “two core portfolio divisions.”  First, a purported 

“Professional Sports Portfolio” consisted of two soccer teams:  the Oxford City Football Club 

and the Oxford City Nomads, which are actual semi-professional soccer teams that compete in 

the lower divisions of the English Football Association.  Oxford City owned other semi-

professional and amateur indoor and outdoor soccer teams, as well as a basketball team.  

According to Oxford City’s public filings, however, none of the teams ever generated profits for 

Oxford City. 

23. Second, Oxford City purportedly had an “Academic Institution Portfolio 

Division” that consisted of two schools:  Oxford City University in the United States, which 

purported to offer Bachelors, Masters, and Doctoral degree programs in economics and financial 

markets, and the Oxford City Sports College in the Oxford, England. 

24. Throughout the relevant period, Oxford City gave the United States school several 

names, including Oxford City University, CIT University, City Institute of Technology and 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 9 of 27



 - 10 - 
 

Christian Institute of Technology.  It purported to be primarily an online university that also had 

plans to establish a physical location.  Oxford City’s public filings with the SEC never reported 

revenue attributable to any schools. 

25. In addition, at various times the company also purported to have a “Media and 

Entertainment Portfolio” that included a South Florida radio station, and a “Real Estate and 

Property Management Portfolio.” 

26. Over the relevant period, Oxford City often sold itself as “the largest publicly-

traded diversified portfolio of professional sports teams in the world” that also owns, among 

other things, a “diversified portfolio of academic institutions.”  Oxford City, however, generated 

only nominal revenue and made no profit from its operations.  By the end of its first full fiscal 

year, for example, which ended June 30, 2014, Oxford City reported $622,522 in revenue, and a 

net loss of more than $7 million. 

27. These operations served as the foundation of a pervasive two-year fraud by 

Guerriero, Defendant, and others, by providing some level of legitimacy to Oxford City such that 

Defendant and others were able to induce millions-of-dollars of investment through unregistered, 

fraudulent means. 

II. Defendant’s Role at Oxford City 

28. Defendant began working for WMX in October of 2012 as a purported “wealth 

manager.”  WMX changed its name to Oxford City around July 2013, and Defendant became the 

COO of the company in September 2013. 

29. As COO, Defendant worked closely with Guerriero, the CEO of the company, 

and shared an office with Guerriero in Oxford City’s Deerfield Beach headquarters.  Defendant 

answered Guerriero’s phone, participated in telephone conversations Guerriero had with current 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 10 of 27



 - 11 - 
 

and prospective investors, traveled with Guerriero, and attended meetings where he obtained 

money from current and prospective investors. 

30. Defendant also was the primary conduit for all written communications with 

prospective and existing investors.  Defendant sent to investors and prospective investors, by 

mail and electronically, written communications concerning the purchase of Oxford City stock, 

marketing materials, including the company’s Business Plans that contained numerous material 

misrepresentations and omissions, and other communications to investors in furtherance of the 

fraud.  

31. For a period of time, Defendant also worked as a salesperson in the Oxford City 

boiler room offering and selling Oxford City stock.  She used leads lists and sales scripts 

provided by Guerriero to solicit investors to purchase Oxford City stock in what purported to be 

private placement offerings, but were actually unregistered public offerings. 

III. Oxford City’s Unregistered Offerings 

32. Throughout the relevant period, Guerriero controlled and managed Oxford City’s 

boiler room operations.  Among other things, Guerriero trained the sales force, created written 

scripts for them to follow on calls, and monitored sales calls to develop methods to enhance the 

boiler room’s effectiveness.  Guerriero was also directly involved in Oxford City’s unregistered 

offerings by soliciting investors, often when boiler room salespeople would forward calls to 

Guerriero for Guerriero to act as the sales “closer.” 

33. Defendant served as part of Guerriero’s boiler room sales team.  Pursuant to 

Guerriero’s instruction, the boiler room salespeople, including Defendant, would seek to induce 

investments using deceptive sales tactics, schemes to defraud investors, and fraudulent 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 11 of 27



 - 12 - 
 

representations of the value and future profit potential of Oxford City, as otherwise described in 

this Complaint. 

34. The boiler room salespeople, including Defendant, contacted potential investors 

using numerous lead lists purchased from third parties.  As part of their sales pitch, they made no 

effort to inquire into the financial background or investing experience of potential investors.  

Furthermore, many of the boiler room salespeople masked their identities by using aliases. 

35. Throughout the relevant period, there was no registration statement filed with the 

SEC or in effect for Defendant’s sales of Oxford City shares.  In its publicly filed annual reports, 

which Defendant helped to prepare, Oxford City claimed an exemption from registration 

pursuant to Rule 506 of SEC Regulation D, 17 C.F.R. §230.506 and claimed it “did not engage 

in any general solicitation or advertising.” 

36. Oxford City did not satisfy this exemption, however, because Defendant and 

others engaged in a general sales solicitation that involved making cold-calls to thousands of 

prospective investors throughout the United States using numerous lead lists purchased from 

third parties. 

37. Defendant and others did not vet potential investors for “accredited” status.  They 

did not ask questions concerning the investors’ sophistication or financial holdings, nor did they 

ask for documentation confirming such status.  Instead, Defendant and others solicited many 

unsophisticated investors that did not possess the experience, income, or assets necessary to 

qualify as accredited investors. 

38. During the time period of these share issuances, Oxford City stock qualified as a 

“penny stock” because it was an equity security that traded for less than $5 per share during the 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 12 of 27



 - 13 - 
 

relevant period, and did not qualify for any of the listed exemptions in Exchange Act Rule 

3a51-1. 

39. Through use of the boiler room and otherwise, from at least July 2013 through 

July 2015, Oxford City, Guerriero, Defendant, and others sold millions of shares of Oxford City 

stock through direct offerings to more than 150 investors in more than 30 states using the phone, 

email, and the mail, generating proceeds of approximately $6.6 million. 

IV. Defendant’s Fraudulent Offerings of Oxford City Stock 

40. Defendant also violated the federal securities laws by selling Oxford City stock 

via numerous material misrepresentations of fact and schemes to defraud investors.  

 A.        Defendant’s Deceptive Sales Tactics 

41. Defendant and others engaged in a scheme to defraud by coercing individuals to 

purchase Oxford City stock by tricking them into thinking that they had already agreed to 

purchase the shares when they had not. 

42. Throughout the relevant period, Defendant and others engaged in a scheme to 

defraud by obtaining investors’ personal information over the telephone, such as a date of birth 

and Social Security number, while pressing buttons on their telephone to falsely give the 

appearance of the use of a recording device.  After the “recording,” Defendant and others would 

send investors written confirmation of a claimed “purchase” of Oxford City shares that set a due 

date for payment.  Defendant and others further falsely claimed that the purchase was recorded 

on a “Verbal Verification System” or an “International Banking Verification System” that linked 

their personal information with the purchase via a filing with the SEC.   

43. If a potential investor disputed the transaction, Defendant and others falsely 

claimed that the Verbal Verification System was legally binding, that the transaction had already 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 13 of 27



 - 14 - 
 

been completed and filed with the SEC, and that if they failed to purchase the stock, they faced 

collections actions, law suits, liens, late fees, and impairment of their credit rating.   

44. This conduct constituted a deceptive business practice intended to induce 

investment in Oxford City.  Defendant knowingly misrepresented that investors had agreed to 

purchase Oxford City stock, and that the so-called Verbal Verification System locked them into a 

purchase.  Thus, Defendant and others knowingly lied to investors both about the existence of a 

Verbal Verification System, its alleged link to the SEC, and whether investors had agreed to 

purchase Oxford City stock.   

45. The misrepresentations by Defendant and others were material to investors and 

convinced numerous individuals to invest in Oxford City who otherwise would have declined.  

This conduct also constituted a scheme to defraud investors, through a pattern and practice of 

using false claims regarding the existence of a Verbal Verification System and other deceptive 

strong-arm sales tactics to coerce investments in Oxford City.  

B.        Defendant’s Material Misrepresentations and Omissions Concerning Oxford 
City’s Value and Future Profitability      
   

46. To further entice unsuspecting investors to purchase the unregistered securities, 

Defendant and others at Oxford City made numerous material misstatements and omissions to 

investors regarding Oxford City’s current and future value.  

47. For instance, Defendant and others told potential investors that Oxford City had 

large real estate holdings worth about $100 million, and that it owned an online university with 

students currently enrolled.   

48. These statements were false and Defendant knew it.  Oxford City never had real 

estate holdings worth anywhere near $100 million, nor did it ever have a paying student in its 

online university. 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 14 of 27



 - 15 - 
 

49. Defendant, as COO of Oxford City, knew its business operations, and knew the 

company’s public filings did not reflect the inflated revenues or assets that Defendant and others 

described to investors.  

50. Defendant and others also made misleading and unfounded statements that 

Oxford City: (1) was going to pay dividends of $0.50 per share within a year or less, and (2) 

would soon be listed on the New York Stock Exchange (“NYSE”).   

51. These statements were false and misleading, and Defendant knew it.  Even 

according to its own 10-K, Oxford City never has been able financially to pay a dividend, let 

alone a $0.50 per share dividend in the first year that investors owned the stock.  In fact, the 

Company lost $9.1 million and $3.7 million for the fiscal years ending 2014 and 2013, 

respectively.  With such losses, state law prohibited Oxford City from issuing a dividend, as 

Oxford City acknowledged in public filings made after the misrepresentations were made to 

investors.  Oxford City also disclosed in its filings that it had “not declared any dividends and we 

do not plan to declare any dividends in the foreseeable future.” 

52. Likewise, Oxford City has never been close to meeting the qualifications to list on 

the NYSE.  For example, to list on the NYSE, Oxford City’s publicly held shares would have to 

have an aggregate market value of $40,000,000.  Although Oxford City’s market cap 

occasionally exceeded that amount due to its artificially high stock price, the NYSE rules require 

companies to subtract from their market cap any shares held by company insiders, which would 

have put Oxford City well below the $40,000,000 threshold.  The NYSE rules also set minimum 

requirements on earnings from continuing operations that Oxford City had no plausible way of 

meeting.   

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 15 of 27



 - 16 - 
 

53. These misrepresentations were material because they falsely gave the impression 

that Oxford City stock had future value for investors, which would influence them to invest in 

Oxford City.  

C.   Defendant’s Dissemination of Fraudulent “Business Plans” 

54. Defendant and others further misled investors and prospective investors during 

the relevant period through several false and misleading “Business Plans” that Defendant and 

others provided to investors and potential investors.  

55. As part of the scheme, Guerriero created and/or directed Oxford City employees 

to create the statements made in Oxford City’s Business Plans.  Defendant, who was primarily 

responsible for corresponding with investors and potential investors, sent the Business Plans to 

investors and potential investors. 

56. The Business Plans that Defendant sent to investors were rife with material 

misrepresentations.  For example, in one Business Plan that Defendant sent to investors in late 

2013, the plan claimed that Oxford City owned a broadcasting network called the Oxford City 

Broadcast Network (“OCBN”).  The OCBN was touted in Oxford City’s Business Plan as a 

“state-of-the-art production facility … capable of handling most commercial delivery systems,” 

that boasts a radio signal on AM 740 that is “one of the strongest in the state of Florida.”  The 

Business Plan projected profits for OCBN of $3.9 million in its first year, and almost $20 million 

over five years.   

57. These statements were false and Defendant knew it.  At the time, Oxford City had 

only a six-month contract with a real broadcasting network to permit Oxford City to broadcast 

for 1 hour per week.  It had no revenue streams.  Rather, Oxford City used the hour as a platform 

for Guerriero to tout himself as an up-and-coming entrepreneur and Oxford City as an attractive 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 16 of 27



 - 17 - 
 

investment opportunity.  There was no reasonable basis for Oxford City to project multi-million 

dollar profits within one year, and Defendant did not genuinely believe that Oxford City would 

obtain such profits.  

58. Defendant and others also misled investors about the success and profitability of 

Oxford City University, the purported online college in the U.S. and the cornerstone of Oxford 

City’s “Academic Portfolio.”  The Oxford City Business Plan that Defendant sent to investors 

and potential investors projected profits from its universities of $495 million over a five-year 

span.   

59. Oxford City had no track record of profits from any academic programs during its 

existence.  In fact, over the relevant period, Oxford City’s public filings never even reported 

revenue from an academic institution.  Yet the projected profits in the Business Plans would have 

made Oxford City University one of the largest, if not the largest, for-profit university in the 

United States.  

60. The Business Plans that Defendant sent to investors contained several other 

fraudulent profit projections.  The projected profits included earning approximately an additional 

$240 million in five years from the following sources: 

• $7.4 million from “Our Existing Indoor Arena”  

• $7.6 million from “Our Existing Oxford City FC Stadium” 

• $21.9 million from “10 New Indoor Oxford City FC Academy & Sports Rental 

Facilities”  

• $71.3 million from the “New Oxford City FC Stadium” 

• $38.1 million from the “New Oxford City FC Facility” 

• $30 million from the “New Oxford City Clubhouse & Convention Center” 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 17 of 27



 - 18 - 
 

• $31.1 million from the “New Oxford City Futsal Arena” 

• $31.1 million from the “New Oxford City Basketball Arena” 

61. These Business Plans also claimed that Oxford City would generate $19 million 

of profit from the “CIT University Think Tank,” which was purportedly an incubator for 

entrepreneurial ideas coming from the University’s student body.  No such entity existed. 

62. All told, Oxford City’s Business Plan projected about $777 million in profit in 

five years. 

63. Defendant, as the Company’s COO, knew that the profit projections in the 

Business Plans were false and misleading.   

64. At the time, Oxford City had only nominal revenue from its 49 percent interest in 

an English soccer club. According to the company’s 10-Ks that Defendant helped prepare, 

Oxford City’s total operations sustained comprehensive losses of approximately $7.4 million, 

$9.1 million, and $3.7 million for the fiscal years ending 2015, 2014, and 2013, respectively, and 

had an accumulated deficit of $21.5 million as of June 30, 2015.   

65. Although the English soccer club, which owned a small facility and a number of 

semi-pro indoor and outdoor soccer teams, reported some revenue, it never turned a profit from 

the time Oxford City became a minority owner.  In total, from 2013-2015, Oxford City’s football 

division had generated average annual gross revenues of only $431,032, with no profits.  

Accordingly, none of these profits projections were reasonable or genuine. 

66. All of these profit projections were material to investors because they directly 

reflected Oxford City’s future value, which influenced investors to purchase Oxford City stock.  

67. In addition, a Business Plan that Defendant sent to investors in late 2013 extolled 

the value of Oxford City’s stock, stating it was “undervalued,” has a “book value of $38 per 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 18 of 27



 - 19 - 
 

share,” and “should be trading at 5-6 times book value” or “over $224 per share.”  The 

company’s Business Plan also boasted that “institutional firms had collectively accumulated over 

88% of the company, making it very stable and secure.”  Finally, the document described Oxford 

City as a “131-year-old debt-free, diversified holding company that has been featured in the Wall 

Street Journal, New York Times, CNBC, and countless periodicals.”  

68. All of these statements were false, and Defendant, as the company’s COO, knew 

it.  Oxford City had not generated a single dollar in profits since it was created.  The small 

amount of revenue Oxford City generated from its 49 percent ownership of the U.K. football 

club (from ticket sales, concessions, facilities rentals, and other activities) was eclipsed by 

Oxford City’s expenses and Guerriero’s compensation.  Furthermore, although the UK soccer 

club was 131 years old, Oxford City was formed in 2013 and, in fact, had significant debt. 

COUNT I 

Violations of Sections 5(a) and 5(c) of the Securities Act 

69. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

70. By engaging in unregistered sales of Oxford City stock, Defendant, directly or 

indirectly, made use of means or instruments of transportation or communication in interstate 

commerce or of the mails, to offer to sell or to sell securities, or to carry or cause such securities 

to be carried through the mails or in interstate commerce for the purpose of sale or for delivery 

after sale.  

71. No registration statement was ever filed with the Commission, nor was one ever 

in effect with respect to any of the sales alleged above.  

72. No exemption applied to Defendant’s unregistered offerings.  

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 19 of 27



 - 20 - 
 

73. By reason of the foregoing,  Defendant violated, and unless restrained and 

enjoined will to continue to violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 

§§ 77e(a) and (c). 

COUNT II 

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

74. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

75. From at least September 2013 to May 2015, Defendant directly and indirectly, by 

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

by use of the mails, in the offer or sale of securities, as described in this Complaint, knowingly, 

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

76. Among other things, Defendant knowingly made material misrepresentations and 

schemed to defraud investors, and employed deceptive strong-arm sales tactics to defraud 

investors.  

77. By reason of the foregoing, Defendant directly and indirectly violated, and unless 

enjoined, is reasonably likely to continue to violate, Section 17(a)(1) of the Securities Act, 15 

U.S.C. § 77q(a)(1). 

COUNT III 

Fraud in Violation of Section 17(a)(2) of the Securities Act 

78. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

79. From at least September 2013 to May 2015, Defendant directly and indirectly, by 

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

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 20 of 27- 21 - 
 

by the use of the mails, in the offer or sale of securities, as described in this Complaint, obtained 

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

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

which they were made, not misleading. 

80. By reason of the foregoing, Defendant directly and indirectly violated, and unless 

enjoined, is reasonably likely to continue to violate, Section 17(a)(2) of the Securities Act, 15 

U.S.C. § 77q(a)(2). 

COUNT IV 

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

81. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

82. From at least September 2013 to May 2015, Defendant directly and indirectly, by 

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

by the use of the mails, in the offer or sale of securities, as described in this Complaint, engaged 

in transactions, practices and courses of business which have operated, are now operating or will 

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

83. Among other things, Defendant knowingly made numerous material 

misrepresentations and schemed to defraud investors, and employed deceptive strong-arm sales 

tactics to defraud investors.   

84. By reason of the foregoing, Defendant directly and indirectly violated, and unless 

enjoined, is reasonably likely to continue to violate, Section 17(a)(3) of the Securities Act, 15 

U.S.C. § 77q(a)(3). 

  

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 21 of 27



 - 22 - 
 

COUNT V 

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

85. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

86. From at least September 2013 to May 2015, Defendant directly and indirectly, by 

use of the means and instrumentalities of interstate commerce, and of the mails, in connection 

with the purchase or sale of securities, as described in this Complaint, knowingly, willfully or 

recklessly employed devices, schemes, or artifices to defraud. 

87. Among other things, Defendant knowingly made numerous material 

misrepresentations and schemed to defraud investors, and employed deceptive strong-arm sales 

tactics to defraud investors.  

88. By reason of the foregoing, Defendant directly and indirectly violated, and unless 

enjoined, is reasonably likely to continue to violate, Section 10(b) and Rule 10b-5(a) of the 

Exchange Act, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5(a). 

COUNT VI 

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

89. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

90. From at least September 2013 to May 2015, Defendant directly and indirectly, by 

use of the means and instrumentalities of interstate commerce, and of the mails, in connection 

with the purchase or sale of securities, as described in this Complaint, knowingly, willfully or 

recklessly made untrue statements of material facts and omitted to state material facts necessary 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 22 of 27



 - 23 - 
 

in order to make the statements made, in the light of the circumstances under which they were 

made, not misleading. 

91. By reason of the foregoing, Defendant directly and indirectly violated, and unless 

enjoined, is reasonably likely to continue to violate, Section 10(b) and Rule 10b-5(b) of the 

Exchange Act, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5(b). 

COUNT VII 

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

92. The Commission realleges and incorporates by reference paragraphs 1 through 68 

above. 

93. From at least September 2013 to May 2015, Defendant directly and indirectly, by 

use of the means and instrumentalities of interstate commerce, and of the mails, in connection 

with the purchase or sale of securities, as described in this Complaint, knowingly, willfully or 

recklessly engaged in acts, practices and courses of business which have operated, are now 

operating or will operate as a fraud or deceit upon the purchasers and prospective purchasers of 

such securities. 

94. Among other things, Defendant knowingly made numerous material 

misrepresentations and schemed to defraud investors, and employed deceptive strong-arm sales 

tactics to defraud investors.   

95. By reason of the foregoing, Defendant directly and indirectly violated, and unless 

enjoined, is reasonably likely to continue to violate, Section 10(b) and Rule 10b-5(c) of the 

Exchange Act, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5(c). 

 

 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 23 of 27



 - 24 - 
 

RELIEF REQUESTED 

 WHEREFORE, the Commission respectfully requests that the Court: 

I. 
 

Disgorgement 
 
 Issue an Order directing Defendant to disgorge all ill-gotten gains, including prejudgment 

interest, resulting from the acts or courses of conduct alleged in this Complaint. 

II. 

Penalties 

Issue an Order directing Defendant to pay civil money penalties pursuant to Section 20(d) 

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

§ 78u(d). 

III. 
 

Permanent Injunction 
 

Issue a Permanent Injunction, restraining and enjoining Defendant, including her agents, 

servants, employees, attorneys, and all persons in active concert or participation with her, and 

each of them, from violating the federal securities laws alleged in this Complaint. 

IV. 

Penny Stock Bar 

 Bar Defendant from any future participation in the offering of any penny stock, as 

defined by Section 3(a)(51)(A) of the Exchange Act, 15 U.S.C. § 78c(a)(51)(A) and Rule 3a51-1 

thereunder, 17 C.F.R. § 240.3a51-1, including engaging in activities with a broker, dealer, or 

issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 24 of 27



 - 25 - 
 

any penny stock, pursuant to Section 20(g) of the Securities Act, 15 U.S.C. § 77t(g), and Section 

21(d)(6) of the Exchange Act, 15 U.S.C. § 78u(d)(6), and the Court’s equitable powers. 

V. 

Officer and Director Bar 

Bar Defendant, pursuant to Section 20(e) of the Securities Act, 15 U.S.C. §77t(e), and 

Section 21(d)(2) of the Exchange Act, 15 U.S.C. §78u(d)(2) from serving as an officer or 

director of any entity having a class of securities registered with the Commission pursuant to 

Section 12 of the Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to 

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

VI. 

Enjoining Securities Solicitations 

 Issue an Order prohibiting Defendant from directly or indirectly, including, but not 

limited to, through any entity owned or controlled by Defendant, participating in the issuance, 

purchase, offer, or sale of any security, provided however, that such order shall not prevent 

Defendant from purchasing or selling securities listed on a national securities exchange for her 

own personal accounts.  

VII. 

Further Relief 

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

  

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 25 of 27



 - 26 - 
 

VIII. 

Retention of Jurisdiction 

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

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

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

relief within the jurisdiction of this Court. 

 

 

Dated:  June 28, 2017    Respectfully submitted, 

 
 
     By: s/ Matthew F. Scarlato       

Matthew F. Scarlato (Special Bar No. A5502152) 
 Attorney E-mail address:  [email protected] 

SECURITIES AND EXCHANGE  
COMMISSION 

      100 F Street, NE 
      Washington, DC  20549 
      Tel:  (202) 551-3749 
       Fax:  (202) 772-9245 
       
 
  

Of Counsel: 
 
Scott W. Friestad  
Brian O. Quinn 
Darren E. Long 
Brian D. Vann 
SECURITIES AND EXCHANGE  
COMMISSION 
100 F Street, NE 
Washington, DC  20549 

 
 Attorneys for Plaintiff Securities and Exchange Commission 
  
  

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 26 of 27



 - 27 - 
 

CERTIFICATE OF SERVICE 
 

I HEREBY CERTIFY that on June 28, 2017, the foregoing document was filed 

electronically with the Clerk of Court using CM/ECF.  I also certify that the foregoing document 

is being served this day on Defendant’s counsel identified on the Service List below via 

overnight mail. 

 

 
s/ Matthew F. Scarlato    

       Matthew F. Scarlato 
 
 
 

SERVICE LIST 
 

David Seltzer 
Seltzer Mayberg, LLC 
1200 Brickell Avenue, Suite 680 
Miami, Florida 33131 
 
Counsel for Defendant Diana P. Lovera 
  
  
 
  
 
 

Case 1:17-cv-22407-XXXX   Document 1   Entered on FLSD Docket 06/28/2017   Page 27 of 27