CEO Of Microcap Company Charged With Securities Fraud For Falsely Claiming Millions In Revenue From Contracts With Nigeria And Other Foreign Countries
NEWARK, N.J. – The chief executive officer of a publicly traded microcap company made his initial court appearance in San Francisco today on charges he allegedly filed false reports with the U.S. Securities and Exchange Commission and made false statements in press releases and blog posts, U.S. Attorney Paul J. Fishman announced.
Cary Lee Peterson, 36, of Texas and Arizona, is charged by complaint with two counts of false certification and one count of securities fraud. FBI agents arrested Peterson March 13, 2016, at San Francisco International Airport when he arrived on an international flight. He is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph C. Spero in San Francisco federal court.
According to the complaint:
Peterson, as CEO of RVPlus Inc., filed numerous false reports with the SEC, including:
On Aug. 21, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $1.8 billion with the “Ministry of Environment for Katsina State Within the Federal Republic of Nigeria” to provide unspecified green energy products and services (the “Nigeria Agreement”);
On Nov. 16, 2013, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $90 million with the “Commission of the Foreign Affairs to the Senate for the Republic of Haiti” (the “Haiti Agreement”);
On Dec. 21, 2012, Peterson falsely certified on Form 10-Q for the quarter that ended Oct. 31, 2012 that RVPlus held $8,653,846 in short-term accounts receivable for services rendered under the Nigeria Agreement.He did so despite prior warnings from RVPlus’ auditors that reporting these receivables as revenue was improper;
On Dec. 27, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $10.5 million with the Federal Ministry of Planning & Economic Affairs for the Republic of Liberia (the “Liberia Agreement”);
On March 28, 2013, Peterson falsely certified on SEC Form 10-Q for the quarter that ended on Jan. 31, 2013, that RVPlus held $17,590,837 in short-term accounts receivable from, among other sources, the Haiti and Liberia agreements.
The SEC suspended trading in RVPlus on July 19, 2013, due to questions concerning the accuracy of RVPlus’ periodic financial filings, including reported accounts receivable, assets, and operations.
In addition to the false SEC reports, Peterson also published false and misleading press releases and drafted blog posts under a phony name in which he touted the benefits of the Nigeria, Haiti, and Liberia agreements.
Peterson also claimed that ECCO2 Corp., a not-for-profit owned by Peterson, had licensed certain intellectual property to RVPlus and that ECCO2 Corp. was an “affiliate organization” of the United Nations Convention on Climate Change. Peterson claimed that “[t]his status held with the sectors of the United Nations opens many windows of opportunity to over $100 billion in financial aid to fund ECCO2 projects.” ECCO2 was never an “affiliate” of the U.N. Convention on Climate Change. In fact, the U.N. wrote to Peterson on two separate occasions demanding that ECCO2 stop claiming that it was.
Each count with which Peterson is charged carries a maximum penalty of 20 years in prison and a maximum fine of $5 million. The SEC also filed a civil complaint against Peterson today in New Jersey federal court in Newark alleging multiple counts of securities fraud.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, with the investigation leading to today’s charges. Mr. Fishman thanked special agents of the FBI, under the direction of Special Agent in Charge David J. Johnson, in San Francisco, and for their assistance with Mr. Peterson’s arrest. He also thanked the Securities and Exchange Commission New York Regional office under the direction of Andrew M. Calamari, Regional Director.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office General Crimes Unit in Newark and Assistant U.S. Attorney Lloyd Farnham in San Francisco.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.